Paycom shares slide in market rotation
Paycom Software s hares fell more than 17% this week, a tumble felt by other tech stocks as investors reversed course on high-growth companies.
The Oklahoma City-based human capital management company, which offers cloud software for payroll and other services, last week was trading at a 52-week high of more t han $ 2 5 0 per s har e . Two analysts recently raised their target prices on the company, including one that bet it could rise to $280.
The selloff began in earnest
on Monday, and Paycom stock fell to less than $210 for the first time since June. The stock gave back another $4.62, or 2.2%, Wednesday to close at $ 206.70, its lowest price since May.
Other software companies felt the pinch, while the market rotated toward slow, inexpensive value stocks, according to analysts at Bespoke Investment Group.
Some of the rotation has been attributed to investors' belief that the Federal Reserve could raise interest rates.
“Part of this was a function of rates, with recent upticks in short and long term interest rates driving utilities and other defensive stocks with strong trailing momentum lower, while banks rallied,” Bespoke posted in a blog. “But it was broader than that too: software got smashed while oil & gas stocks surged, automakers ripped while stable consumer staples names took a hit, and the market generally reversed all of the trends it has been operating on so far this year in a massive stop-out of successful (up to now) trading strategies.”
Paycom is in the mandated quiet period before quarterly earnings are released.