Sather Financial Expands Paycom Holdings With 18,000 Additional Shares

During the final quarter of 2025, Sather Financial Group Inc significantly increased its exposure to Paycom Software by acquiring over 18,000 shares of the cloud-based human capital management provider. According to an SEC filing released on January 26, 2026, the fund purchased approximately 18,035 shares at an estimated value of $3.20 million, using the quarter’s average pricing as the reference point.

The Portfolio Move: Analyzing the Numbers

The addition of these 18,000-plus shares demonstrates noteworthy conviction from one of the fund’s portfolio managers. Sather’s Paycom position grew to 268,030 total shares valued at approximately $42.71 million following the transaction. This investment now represents 2.3% of the fund’s $1.86 billion in reportable U.S. equity assets under management as of December 31, 2025.

Interestingly, despite adding more than 7% to its Paycom stake, the overall position value declined by $9.32 million during the quarter. This decline reflects the stock’s weakness during the period, as shares fell to $152.29 by January 23, 2026—down 25.3% from the previous year. The transaction accounted for just 0.17% of the fund’s total reported 13F assets, suggesting a measured but deliberate capital allocation.

How Paycom Fits Into the Fund’s Portfolio Strategy

Paycom Software currently ranks outside Sather Financial’s top five holdings, trailing behind positions in Alphabet ($221.90 million), Berkshire Hathaway ($192.74 million), Arista Networks ($118.95 million), Microsoft ($110.52 million), and Brookfield ($97.26 million). These leading positions range from 5.2% to 11.9% of the fund’s AUM.

The company itself operates a comprehensive cloud-based HCM platform serving small to mid-sized enterprises. With 7,306 employees, Paycom generated $2.00 billion in trailing twelve-month revenue and posted net income of $453.20 million. The platform consolidates payroll processing, talent acquisition, time and labor management, and compliance solutions into a unified software-as-a-service delivery model.

Understanding the Investment Thesis: Valuation Vs. Growth Trajectory

The rationale behind Sather’s 18,000-share purchase becomes clearer when examining Paycom’s evolving growth profile. Five years ago, the company was expanding revenue at rates exceeding 25% annually. By the first nine months of 2025, that figure had moderated to approximately 10%—respectable by many standards but materially different from historical performance.

This deceleration has weighed heavily on the stock. Paycom shares are down more than 60% over the past five years, representing a significant drawdown from pandemic-era peaks. However, this weakness has fundamentally restructured the valuation. The stock now trades at roughly 19 times earnings—a dramatic compression from pandemic periods when its price-to-earnings multiple occasionally exceeded 150.

The fund’s decision to add 18,000 shares appears to reflect a contrarian bet that this valuation compression has created attractive entry conditions. While growth has undeniably slowed, the market may have overreacted to the deceleration, pricing in a permanent deterioration rather than a normalization from extraordinary pandemic expansion rates.

The Risk-Reward Calculus for Long-Term Investors

Sather’s timing remains imperfect in the near term, as evidenced by the $9.32 million decline in the position’s mark-to-market value despite adding shares. However, the reduced valuation multiple improves the odds that this capital deployment could generate compelling returns over extended holding periods.

For investors evaluating Paycom alongside competing HCM platforms, the data presents both challenges and opportunities. The company has maintained market relevance through its integrated platform approach and focus on automation, establishing competitive differentiation in an evolving sector. Whether that competitive position justifies even the current 19x earnings multiple remains a question the market will answer through Paycom’s ability to reignite revenue growth momentum or expand operating margins from current levels.