Autodesk (ADSK) Showing Signs Of Being A 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 $175.0 million.
  • ADSK has a PE ratio of 95.8.
  • 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 0.7%.

'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-Ideas

More details on ADSK:

Autodesk, Inc. operates as a design software and services company worldwide. ADSK has a PE ratio of 95.8. Currently there are 11 analysts that rate Autodesk a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Autodesk has been 3.0 million shares per day over the past 30 days. Autodesk has a market cap of $13.9 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.85 and a short float of 2.1% with 2.13 days to cover. Shares are up 21.3% year-to-date as of the close of trading on Tuesday.

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 hold. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, disappointing return on equity and feeble growth in the company's earnings per share.

Highlights from the ratings report include:
  • ADSK's revenue growth trails the industry average of 27.0%. Since the same quarter one year prior, revenues rose by 11.3%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 50.11% to $136.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 11.20%.
  • Despite currently having a low debt-to-equity ratio of 0.33, 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 1.91 is high and demonstrates strong liquidity.
  • The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Software industry. The net income has significantly decreased by 81.4% when compared to the same quarter one year ago, falling from $57.60 million to $10.70 million.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. In comparison to the other companies in the Software industry and the overall market, AUTODESK INC's return on equity is significantly below that of the industry average and is below that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

null

More from Markets

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Global Stocks Mixed, U.S. Futures Soften as Earnings, Oil, Rates Cloud Sentiment

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Deutsche Bank Plans 'Significant' Job Cuts as Q1 Profits Slump

Samsung Posts Record Q1 But Adds Cautious Voice To Smartphone Demand Forecasts

Samsung Posts Record Q1 But Adds Cautious Voice To Smartphone Demand Forecasts

Boeing Is Back to Cruising Altitude; GM Gets Assist From Amazon -- ICYMI

Boeing Is Back to Cruising Altitude; GM Gets Assist From Amazon -- ICYMI

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer

Investors Shouldn't Be Worried About Trump's Trade Tariffs: Ian Bremmer