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Bear of the Day: Autodesk (ADSK)

David Bartosiak

Buying stocks in strong industries works. With an entire portion of the market on the move, it may be tempting to load up on all the names in the same space. By using the Zacks Rank, you can avoid certain stocks in strong industries with weak underlying earnings trends. That way you could potentially avoid a future pitfall. Today’s Bear of the Day is a Zacks Rank #5 (Strong Sell) in an industry that ranks in the Top 10% of our Zacks Industry Rank. I’m talking about Autodesk (ADSK).

Autodesk (ADSK) operates as a design software and services company worldwide. The company offers AutoCAD, a professional design, drafting, detailing, and visualization software; and AutoCAD LT, a professional drafting and detailing software; computer-aided manufacturing (CAM) software for computer numeric control machining, inspection, and modelling for manufacturing; and AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering, including land development, transportation, and environmental projects. It also provides Maya and 3ds Max software products that offer 3D modeling, animation, effects, rendering, and compositing solutions; Revit software for building information modeling; and Inventor tool for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation. 

The reason for the unfavorable ranks lies in the recent earnings estimate revisions to the downside. Over the last week, analysts have cut their estimates for the current year and next year. The bearish revisions have made a dramatic impact on our Zacks Consensus Estimates. The current year number has dropped from $2.15 to $1.88 while next year’s number is down from $4.02 to $3.82. This negative move in revisions has put the stock under some pressure recently.

Investors looking for stronger stocks within the same industry should check out one of several Zacks Rank #1 (Strong Buy) stocks. Among them are Cadence Design Systems (CDNS) and CommVault Systems (CVLT).

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CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report
Cadence Design Systems, Inc. (CDNS) : Free Stock Analysis Report
Autodesk, Inc. (ADSK) : Free Stock Analysis Report
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