Fundsmith 13F: Cuts Paycom Software (PAYC) Stake by $41M

Fundsmith significantly reduced its stake in Paycom Software, Inc. (NYSE: PAYC) during the first quarter. According to its latest Form 13F filing with the SEC, the fund trimmed its position by 58.07%. It sold 303,976 shares, leaving it with 219,457 shares valued at approximately $29.5 million. Keep in mind that 13F filings are backward-looking and show holdings as of the reporting date, meaning they may not represent the fund's current positions.

Why Fundsmith's Big Paycom Trim Stands Out

Fundsmith, managed by prominent investor Terry Smith, is well-known for its strict buy-and-hold philosophy. The fund targets high-quality, resilient businesses with high returns on capital and holds them for the long haul, rarely making major changes to its core portfolio. However, this aggressive trim of Paycom Software follows a pattern of recent exits and reductions. The fund recently closed out its positions in Graco, Choice Hotels, and Exponent, while also heavily cutting stakes in Doximity and Napco Security Technologies. This suggests the firm is actively reorganizing its software and technology exposure.

Inside the Paycom Share Reduction

Before this adjustment, Fundsmith held 523,433 shares of the payroll software company. By shedding 303,976 shares, the fund reduced its holding to 219,457 shares. This remaining position represents a much smaller bet on the payroll provider, valued at $29,521,357 at the end of the reporting period. The fund's reported cost basis for its Paycom shares was $225.04.

Paycom Stock Trades Below Its Cost Basis

Paycom shares closed at $134.52 on Saturday, trading well below Fundsmith's reported cost basis of $225.04. The stock has experienced a volatile year, trading between a 52-week low of $104.90 and a 52-week high of $244.98. Currently, the share price sits below its 50-day moving average of $199.49 but remains above its 200-day moving average of $152.30.

Recent Earnings

Paycom reported annual revenue of $2.14 billion, representing revenue growth of 9.8%. The application software provider maintains a healthy net margin of 22.78% and a return on equity of 41.09%. Its earnings per share stand at $9.46. Investors looking ahead can mark November 4, 2026, on their calendars, when Paycom is scheduled to release its next quarterly earnings report.

Dividend

Paycom pays an annual dividend rate of $1.50 per share, which translates to a dividend yield of 0.66%. The company maintains a conservative dividend payout ratio of 15.87%, suggesting it keeps the vast majority of its earnings to fund operations and future expansion rather than returning them to shareholders.

Analysts Set New Price Targets

Wall Street analysts have maintained a fairly constructive view of the software company. On October 13, 2026, Barclays maintained its Equal-Weight rating and raised its price target from $210.00 to $250.00. Earlier, on October 2, 2026, TD Cowen kept its Buy rating and boosted its target to $286.00. Keybanc also maintained an Overweight rating on September 21, 2026, setting a target of $280.00. Overall, the consensus recommendation key is a buy, with 16 analysts providing opinions and setting a mean target price of $218.88.

About Paycom Software

Paycom Software provides cloud-based human capital management software delivered as a subscription service. The company helps small and medium-sized businesses manage the entire employee lifecycle. This includes recruitment, onboarding, payroll, talent management, and retirement.

What to Watch at PAYC

Investors will want to watch Paycom's upcoming earnings report on November 4, 2026, to see if the company's growth justifies Wall Street's optimistic price targets. Future 13F filings will also reveal whether Terry Smith's fund continues to pare down its stake or decides to hold its remaining position. Remember that regulatory filings only offer a delayed snapshot of institutional activity and do not constitute investment advice.