6/24/24 - $payx - Too many macro headaches involved6/24/24 :: VROCKSTAR :: NASDAQ:PAYX
Too many macro headaches involved
getting out in front of some of these prints later this wk as i'm at the bitcoin conf in miami this week.
any-who
back to the reality of awful economic growth (the real numbers frens) businesses preferring cheap labor or AI labor to humans and... no rate cuts for some time (the next few months MINIMALLY)
and you basically setup for a tough communication from NASDAQ:PAYX which is a great co. owned it for some time, up down and all around. but they're super exposed to the B2B trends being AI-hurt, the macro (less employees on these services) etc. etc. and while the co is defn a cash cow $2 bn in FCF w/o much dilution issues on $45 bn ev or about 4.5% fcf yield (good, actually), growth is MSD... *fine*... it's just not the right time.
look at the last 3 q's. all good results. stock dead money. should have just owned the S&P - that's the point.
repeat after me:
divide EVERY STOCK by the S&P. if it's not starting to break out or deliver results that will have it changing course of this relative performance to the S&P, you DON'T WANT to be a bag holder in this environment. the floor here for the non-mega stuff will be a super charged liquidity environment. while we have liquidity flowing into the stonks vis a vis reach around VIX suppression today (much more on this in a later note at a later time), it's all flowing to the top - which should be obvious by now - are you buying NASDAQ:NVDA today?
conclusion: just a tough macro setup for a dead money stock with mediocre-to-better-than-cash returns. the results if good will probably not result in the merit to taking the punt. and if u see a weird guide or a revision to growth... 27x PE goes to 22x fast.
that's all. pz my friends.
V