Trade-Ideas: Autodesk (ADSK) Is Today's Momo Momentum Stock
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.Trade-Ideas LLC identified Autodesk (ADSK) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Autodesk as such a stock due to the following factors:
- ADSK has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $184.5 million.
- ADSK has a PE ratio of 42.5.
- ADSK is currently in the upper 30% of its 1-year range.
- ADSK is in the upper 25% of its 20-day range.
- ADSK is in the upper 35% of its 5-day range.
- ADSK is currently trading above yesterday's high.
- ADSK has experienced a gap between today's open and yesterday's close of 1.4%.
'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.EXCLUSIVE OFFER: Get the inside scoop on opportunities in ADSK with the Ticky from Trade-Ideas. See the FREE profile for ADSK NOW at Trade-IdeasMore details on ADSK: Autodesk, Inc. operates as a design software and services company worldwide. The stock currently has a dividend yield of 21.8%. ADSK has a PE ratio of 42.5. Currently there are 7 analysts that rate Autodesk a buy, 1 analyst rates it a sell, and 6 rate it a hold.The average volume for Autodesk has been 2.9 million shares per day over the past 30 days. Autodesk has a market cap of $9.1 billion and is part of the technology sector and computer software & services industry. Shares are up 15.5% year to date as of the close of trading on Monday.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.TheStreetRatings.com Analysis:TheStreet Quant Ratings rates Autodesk as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income.Highlights from the ratings report include:
- Compared to its closing price of one year ago, ADSK's share price has jumped by 29.44%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- Despite currently having a low debt-to-equity ratio of 0.36, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that ADSK's debt-to-equity ratio is mixed in its results, the company's quick ratio of 2.41 is high and demonstrates strong liquidity.
- AUTODESK INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, AUTODESK INC reported lower earnings of $1.07 versus $1.22 in the prior year. This year, the market expects an improvement in earnings ($1.74 versus $1.07).
- The gross profit margin for AUTODESK INC is currently very high, coming in at 93.63%. Regardless of ADSK's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, ADSK's net profit margin of 10.98% is significantly lower than the industry average.
- ADSK, with its decline in revenue, slightly underperformed the industry average of 5.9%. Since the same quarter one year prior, revenues slightly dropped by 1.2%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- You can view the full Autodesk Ratings Report.
STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV