Transaction Overview: Hotchkis & Wiley Adds to Workday Position
On June 30, 2026, Hotchkis & Wiley executed a significant transaction by adding 2,023,396 shares of Workday Inc WDAY at an average price of $122.42 per share. This strategic move increased the firm's total holdings in Workday to 12,679,129 shares, representing a 0.76% impact on the firm's overall portfolio. The transaction underscores the firm's conviction in Workday's long-term value proposition, particularly given the stock's current valuation metrics.
Following this acquisition, Workday now accounts for 4.75% of Hotchkis & Wiley's total equity, and the position constitutes 6.31% of the firm's holdings in the traded stock. This substantial allocation reflects the firm's confidence in Workday's business model and growth trajectory. The timing of this purchase is particularly noteworthy, as the average acquisition price of $122.42 sits well below the current market price of $190.635, suggesting the firm capitalized on a favorable entry point during a period of market volatility.
Profile of the Investing Firm: Hotchkis & Wiley
Founded in Los Angeles in 1980, Hotchkis & Wiley has established itself as a value-oriented investment firm with a focused approach to identifying undervalued companies offering significant appreciation potential. The firm's investment philosophy centers on critical parameters such as tangible assets, sustainable cash flow, and the potential for improved business performance. This disciplined methodology has guided the firm through various market cycles, maintaining a consistent focus on fundamental value discovery.
With a portfolio equity of $34.31 billion spread across 463 stocks, Hotchkis & Wiley maintains a diversified yet concentrated approach to value investing. The firm's top holdings include F5 Inc FFIV, American International Group Inc AIG, APA Corp APA, Workday Inc WDAY, and GE HealthCare Technologies Inc GEHC. The firm's largest sector allocations are in Technology and Financial Services, reflecting a strategic tilt toward sectors where value opportunities frequently emerge. This positioning demonstrates the firm's commitment to finding quality companies trading at attractive valuations.
Company Overview: Workday Inc
Workday is a cloud-only software provider specializing in human capital management, financial management, and business planning solutions for enterprise clients. Headquartered in Pleasanton, California, and founded in 2005, the company went public on October 12, 2012. Revenue is generated through two primary segments: subscription services and professional services. This dual-revenue stream provides stability and recurring income, which is particularly attractive to value investors seeking predictable cash flows.
As of the article date, Workday has a market capitalization of $47.08 billion, with shares trading at $190.635. The company's position in the enterprise software market remains robust, with a strong competitive moat built on its comprehensive cloud-based solutions. The company's focus on innovation and customer satisfaction has helped maintain its leadership position in the human capital management and financial management software space, making it a compelling long-term investment candidate.
Valuation and Market Performance Analysis
The current stock price of $190.635 sits significantly below the GF Value of $319.84, yielding a price-to-GF-Value ratio of 0.60, indicating the stock is significantly undervalued. This valuation gap suggests substantial upside potential for investors who share Hotchkis & Wiley's value-oriented perspective. The GF Value Rank of 4/10 further supports the notion that the stock is trading at an attractive discount to its intrinsic value.
Since the transaction date, the stock has gained 55.72%, while the year-to-date performance shows a decline of 7.36%. Since its IPO, Workday shares have appreciated 296.74%, demonstrating long-term value creation. The stock's GF Score of 79/100 suggests likely average performance potential, supported by a balance sheet rank of 7/10, profitability rank of 5/10, and an exceptional growth rank of 10/10. These metrics indicate a company with strong growth prospects that may currently be undervalued by the market.
Financial Health and Operational Metrics
Workday maintains a Piotroski F-Score of 8, indicating strong financial health, and a Altman Z score of 3.88, reflecting a low bankruptcy risk. The company's cash-to-debt ratio stands at 1.14, with an interest coverage ratio of 10.32, underscoring solid liquidity and debt servicing capability. These financial strength indicators provide confidence in the company's ability to weather economic uncertainties and continue investing in growth initiatives.
Profitability metrics include a return on equity of 10.22% and a return on assets of 4.86%, demonstrating efficient capital utilization. The company's Profitability Rank of 5/10 reflects improving margins and operational efficiency. Growth trends are robust, with a three-year revenue growth rate of 13.50%, EBITDA growth of 89.30%, and earnings growth of 36.40%. The Growth Rank of 10/10 highlights the company's exceptional expansion trajectory, which should eventually translate into higher share prices.
Technical Indicators and Momentum Signals
Short-term momentum indicators show an RSI of 57.71 (5-day), 62.52 (9-day), and 63.59 (14-day), suggesting the stock is neither overbought nor oversold. The 6-1 month momentum index is positive at 1.51, while the 12-1 month momentum index is negative at -37.55, reflecting mixed medium-term sentiment. The stock's Momentum Rank of 4/10 indicates moderate positioning relative to the broader market.
The stock's momentum index rank (6-1 month) is 922, and the RSI 14-day rank is 2513, indicating moderate positioning relative to the broader market. These technical indicators suggest that while short-term momentum is positive, the stock may require patience for full value realization. For value investors like Hotchkis & Wiley, such conditions often present attractive entry points, as market sentiment may not yet fully reflect the company's fundamental strengths.
Institutional Interest and Transaction Analysis
Hotchkis & Wiley Capital Management LLC is the largest institutional holder of Workday, with the firm's stake representing a significant portion of the company's outstanding shares. Other notable value investors holding Workday include First Eagle Investment (Trades, Portfolio), Richard Pzena (Trades, Portfolio), and Joel Greenblatt (Trades, Portfolio), signaling broad confidence in the stock's long-term prospects. According to GuruFocus's premium 13F ownership data, 14 gurus currently hold the stock, with 9 adding and 5 trimming positions in recent quarters—a signal that differentiates GuruFocus from other financial data providers.
The collective presence of these respected investors reinforces the thesis that Workday's current valuation offers a compelling margin of safety for value-oriented portfolios. Hotchkis & Wiley's decision to increase its stake at an average price of $122.42, well below the current market price, demonstrates the firm's conviction in the stock's appreciation potential. The transaction's 0.76% portfolio impact and the resulting 4.75% portfolio allocation indicate a measured yet confident approach to position sizing, balancing conviction with prudent risk management.
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