No. of Recommendations: 1
I bought some more today at $190.88
Thanks for posting the bear case, here are my thoughts
1. Macroeconomic Sensitivity & Employment Slowdown --> Transient, they have proven they can make money in all sorts of macro environments. The stock only dropped about 20% during the 2008 financial crisis as an example.
2. Intense Competition from SaaS Rivals --> I am confident in their moat, but something to watch.
3. PEO Segment Margin Pressure --> Something to watch, but I don't think this is recent change in their business
4. Declining "Float" Income --> I don't think its declining, the forecast is for $1.3B in Float revenue this year up from $1.2B last year.
5. Technological Disruption & Execution Risk --> I think this is what is driving the decline, and as you can probably tell I am not that concerned in the mid term (next 3 years)
6. Slowing Growth and Premium Valuation --> Valuation looks attractive, growth is steady.
7. Significant Insider Selling --> Not an issue, no recent sells at current levels.
tecmo
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