Jim,
I did go ahead and buy a smallish position in Autodesk today. Used tech money to do it, as I got rid of 40% of my Apple position just above 48 (the rest I'm holding onto).
Reading through the SEC filings, Autodesk seems to be a lot more complicated than one would think. But this is mainly a contrarian play. The stock is now at the bottom of a years-long trading range, half it's 52 week high, and there is evidence of significant insider buying the last time it was this low. In fact insiders seem to reliably buy at this level and sell at double this level over the last few years. Debt next to nil, a hoard of cash that makes the stock cheaper than it appears, and a history of tremendous intraquarter order volatility that repeatedly seems to provide buying opportunities in the stock. This is another instance of the majority of its shareholders being the wrong kind. If we're looking for a double in 10 years as the absolute minimum, this thing is a lock. Right now, it has a quadruple bogey : sia flu, strong dollar, product transition, Y2K spending slowdown. Expected weakness the remainder of the year. But if history serves as any guide, Autodesk will survive and grow yet again. On a ratio basis, FWIW, the stock is at historic lows, especially if you count enterprise value as the main numerator rather than market cap. It might hit 22 yet again, but at 24 7/16 I see 10% downside and 100% upside as a potential long-term play.
Mattel was my other candidate for the Apple money, and it was nearly a toss-up.
Mike |
