Terry Smith Bought $30,000,000 Of This Stock At It's 52 Week Low! | Should We Also BUY?! |

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Terry Smith이 PAYC(Paycom) 주식을 약 3,000만 달러 매수한 사실을 계기로 기업을 분석한 영상. 매출은 10년간 10배 이상 성장, 최근 분기 매출 10.7% 증가, 연간 가이던스 상향. 순이익·현금흐름 개선, 최근 분기 부채 0. 밸류에이션은 DCF·멀티플 기준 내재가치 256~284달러로 현재가 대비 저평가 주장. 최근 1년 주가 약 36% 하락, 내부자 매수 소액·매도 일부, 기관은 순매수 우위. 배당은 최근 시작.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Terry Smith a famous British head fund manager has done some massive moves in his portfolio and the one that we want to draw your attention to today is he has added $30 million worth of paycom software ticker symbol p a YC now this is a company that is right there towards its 52 we low and in today's episode we're going to analyze this dividend company it looks to be severely undervalued and as always we are going to look at this company in detail their Topline Revenue growth which has been extraordinary as well as their bottom line net income we're going to look at their balance sheet the health their cash versus their total debt which is also very very strong we'll look towards both Insider movements as well as institutional ownership and we also want to run through their financial metrics now it has just recently started paying a dividend but there are a lot of underlining like the free cash flow like the roic that we want to draw your attention to today and as always we're going to run it through the valuation model getting to our intrinsic value our acceptable Buy price given our investor margin of safety as well as looking at wall Street's price Target over the next 12 months which is absolutely incredible this is an episode you do not want to miss so let's jump straight into the historical performance for those that are relatively new to this company paycom software as we can see over the last year is down around 36% but when we do expand it over the last 10 years we do do see this company up over 1,5% we also note all-time highs sitting around $548 quite some way away from rating summary we have three hold ratings across the analyst we do also note on a trailing 12-month basis it does offer a yield 86% and in terms of a forward P it does sit around 22.45% company we want to do a deep dive it does look incredibly undervalued total revenue remember year on year we do want to see minimum 3 to 7% growth 151 million reported in December 2014 1.79 billion reported in fact in December 2023 so we do know some very strong growth year onye absolutely phenomenal in fact more than 10 times over the last 10 years and when we take a look at the graphical basis we can see over the longer term this is a company that is rapidly increasing their Top Line we're not going to go into their earnings into too much detail but just two things that we do want to draw your attention to the financial highlights 4 q1 of 2024 they increased their top line by around 10.7% so double digits and when we do take a look at their full year guidance for December 31st 2024 the anticipation around 1.86 to 1.

02. 1885 for the full year so we can see it is expected to increase strongly into 2024 as well so taking off a lot of the right boxes at the moment it is also near its 52- we low in terms of the bottom line net income well firstly on a graphical basis we do see it although slightly inconsistent moving in the right direction as we can see and love to see in fact with this company 5.7 million in December 2014 341 million in December 2023 so lots of growth not just on the top line but also the bottom line and when we look at the balance sheet very very strong they had 25.1 million of cash sitting on their balance sheet in December 2014 371 in their latest quarterly report and we can see over the longer term that cash has been growing year on year which is a positive sign but really we need to also see it and compare it to their total debt numerically and directly as we always do 27 billion of debt sitting on that balance sheet and we noticed in their latest quarterly report sitting at zero so that is very very strong whilst their cash has increased over the longer term their total debt as we can see year on year very small regardless but in that latest quarterly report they do have no debt so very very positive a very very strong balance sheet as well another thing we like to look at is their earnings per share past performance as well as future what we can see already their track record over the last four quarters 100% so they have beaten and list targets every single quarter q223 all the way way to q124 however when we do look at the next four quarters we do see the anticipation on a year-on-year basis for the next three forward looking is low single digit decrease although we can see quarter one of 2025 it is expected to pick up 8.57% so something that we will need to factor into our margin of safety as well as our own investment thesis one of the grades that we look at is the valuation aspect and we do note it does get a d now there are many different ways that you can value the company as you can see lots of different metrics the one that we focus on on a high level as we do cover a few in this episode the pee on a non-gaap forward basis 22.45% in correlation to others in the sector just bear in mind though that this isn't a very true metric of comparison as you also need to understand whether the others are of a high quality as well when we do move on then into the growth grade they do get a C+ few things to note from this and that I will draw your attention to year-on-year growth 18.23% significantly better than the sector median of 5.14 Revenue on a forward basis 15.05% significantly better than the sector median of 6.25 and we can see other metrics here the one that maybe lets them down is the earnings per share on a forward basis over the next 3 to 5 years it is expected it will increase 10% year on-ear whilst we do in fact see the sector median a little bit higher at 12.1% in fact it is in terms of percentages lower by 14.42% now there are a few other metrics if you do want to take a look at but we can see in today's episode overall it does get a C+ but the metrics that we did look at look fairly strong in comparison to the sector now profitability grade an A minus but pretty much across the board we are looking at A+ gross profit margin very very high a 86.5% with the sector median 30.8 bottom line margin 27% sector median at 6% so very strong it is very understandable and justifiable why they have that a minus grade another metric that we like to look at the cash from operations 487 million with the sector around 39.75 so lots to like about this company again you need to do your own due diligence but from these metrics it does look like we are off to a very good starting point we do however note three hold ratings as we discussed earlier and in summarization a valuation grade of a growth C+ and profitability a minus now how have they compared against others in the industry over the last 10 years well in the human resources and employment services we have dayforce payLo City holding Robert H as well as a few others now over the last year total return so remember including dividends reinvested they are down 35% making the worst performer out of this bunch of competitors over 12 month period when we extend this to over the last 5 years we do note again the worst performing down 13.48% when we expanded over the last 10 years they are the best performing as we can see here 1,7% even after the very poor performance they've had over the last year if you were to zoom out they have performed phenomenally well as always though this will depend at what point you have purchased shares or if for example you are looking and this is on your watch list one thing I would say is no matter how good no matter how bad their performance has been or any other companies over the past do remember that it isn't an indicator of their future performance now let's get into some movement so Insider ownership it does hit fairly high in comparison to others that we've reviewed on the Channel 12.6% with one instant of Insider buying over the last 12 months two selling over the same period around 50,000 worth of buys 250,000 worth of sales now to notice any of these we do have to go to Q4 where we see inside of buying of 50,000 and Q3 for Insider selling of 130,000 now who are these insiders and individuals well we can see the director on the 3rd of November 2023 so quite some way away did buy over 300 shares around $159 for 50,000 in total now you can see the information personally inside of buying is a very bullish signal as they do buy really for only one reason they believe the share price will go up but again you could say is a little bit outdated to include into own investment thesis we do also notice some Insider selling the more recent in fact the 8th of September 2023 so I would perhaps say this is a little bit too outdated to discuss and include just under 88% we see 1.45 billion worth of sales by the institutions over the last 12 months we do see marginally a little bit more buying over the same time period and when we do look at the latest quarter again we see marginal more buys than sells so overall not just the last 12 months but as well as q1 so the latest period for the data we have institutions have been buying more than selling but please remember always do your own due diligence whether or not you want to include this data into your investment analysis that is up to you but always do that separate to this look that we are doing today also just to let you know here we run through 20 potential companies to add that are undervalued in the dividend area now we also have other articles if you do want to read completely free by clicking on the pin comment below we also want to point out that this article here on how to find undervalued stocks we do run through all the websites and resources we use on the channel so if you do want to analyze companies side by side like us you can look at those websites now let's jump into the dividend safety and the underlining metrics as we mentioned as they've just recently started to pay a dividend we don't have a score right now market cap just under 10 billion it is a midcap company now what we notice when we take a look at their free cash flow pay out 23% in 2023 29% expected in 2024 which is a very good sign essentially it's below 30% for us in fact below 60% does look very strong giving us faith that they can offer those lovely double digigit dividend increases we love to see so I'd be surprised if we don't see a very healthy increase from pcom software very soon terms of the free cash flow share very nice to see consistent increases over the longer term we're talking 16 cents in 2014 $499 in 2023 526 anticipated in 2024 so it's continuing to increase over the longer term this is a very good sign for any company not just paccom that you want to consider in your own portfolio increasing free cash flows sales growth well again very strong double digit every single year we love to see this just their latest quarter up 11.7% and while it is expected to slow down as we can see 18% on a trading 12-month basis it is still very very strong but again you can factor in the slow that we are seeing over the longer term terms of numericals well we did see this earlier on so just a different format and in terms of shares outstanding one of the main things we like to see is companies doing those share BuyBacks effectively returning that excess cash to investor Pockets we do know they have also grown share price over 1,000% so you probably wouldn't care the other thing that we do want to point out in fact from 2016 they have been doing very very small share BuyBacks is just the net position over the longer term is share dilution terms of roic a very very strong signal remember 10% or more to give us faith that management are able to effectively allocate their Capital looking phenomenal 30% in 2023 37% on a trailing 12mth basis so this makes it incredibly attractive to investors potential investors and no surprises from the data we've seen as to why Terry Smith has been adding a significant amount to his portfolio terms of margins well two things to note well above the minimums that want to see on the operating side as well as operational efficiency and on the free cash flow margin very consistent in the teens looking very very healthy 177% over the last 2 years we then come on to the net debt to ebit DAR the earnings before interest tax depreciation ammortization remember correlating with dividend safety balance sheet strength zero Over The Last 5 Years expected zero next year won't even take them one day to pay off all of that debt net of cash on hand and no surprises there at all given the fact their total debt from that latest qu is zero absolutely phenomenal just on that it should be something just to consider in the portfolio so let's jump into the valuation model as always if you're enjoying the content values being provided so you are continually notified of these videos as they drop now let's take a look at the multiples valuation the first model companies in the similar sector and size that we saw when we were comparing it over the last 10 years we have the average P multiplied by the EPS of pyc to get an intrinsic value here here now we have a massive undervaluation signal with the intrinsic value of 284 over the market value of 175 just bear in mind that we're not looking at any one of these models in isolation now typically the dividend discount model would be the second model they do pay a dividend however given they have just started to pay it isn't to fair or relevant to use this model just yet something we will incorporate into the evaluation model of payom at a later date we then move on to the discounted cash flow model we have the free cash flow year on year absolutely phenomenal growth over the last 10 years of 60% we've gone a lot more conservative at 14% which is in fact zero gives us the equity value divide by the shares outstanding and we can see here another strong undervaluation signal so the intrinsic value in today's episode is just purely the average of these two models you can see coming to $256 don't forget you can click on the pin comment below to get to the valuation model if you want to run your own numbers through for whether it's a company of your own on your watch list get to both the intrinsic value as well as the acceptable Buy price so margin of safety then as always we execute on 10% and we use that if we believe it meets three criteri if you believe that for pyc it is a buy up to $230 and then we keep going till it's near that current trading price and we can see in today's episode some significant MOS not not at 35% but we do see it pretty much around that 30% margin of safety based on that information we have gone through in today's episode terms of Wall Street and their forecast over the next 12 months well they do see this slightly lower than our intrinsic value but a price target of $246 31 indicating upside of 41% to paccom and we can clearly see why Terry Smith has added around $30 million worth into the portfolio lots of strong metrics have we have gone through increasing revenues bottom line looking very healthy as well in line balance sheet looking very strong they have no debt and when we have run through the roic's the operating the free cash flow margin this looks like a company definitely to consider for the portfolio or have it on the watch list so you can analyze it at a later date as always though is this one you are looking to buy maybe you've bought it recently as well maybe it's on the watch list or for whatever reason maybe it's one you do want to stay clear of if you've s always we'll see you on the next one and take care for now