Posts Tagged ‘Autodesk’

Stocks were one of the things my dad and I enjoyed together.  He really got me started in trading.  I couldn’t wait for the morning paper so we could pour over — in 3-point type! — what the stocks we were following did the day before.

One of the stocks he followed — literally about 50 years ago — was Transamerica.  Probably best known for its office building (the Transamerica Pyramid in San Francisco, one of the world’s most iconic buildings), Transamerica was founded by A.P. Giannini… the guy who also founded the Bank of Italy… which turned into Bank of America… and the same guy that had his car designated as a firetruck so he could speed between business meetings.  (Now that’s intense!)

My little sister absolutely, positively believes that my dad still takes care of her from above.  She has dozens of examples of needing a bit of cash and then somehow magically finding some money in an old coat pocket, or getting a delayed commission check that she didn’t know she had coming, and so on.

I think I’m feeling a bit of that today, too.  I haven’t thought of Transamerica for a long time, and just today, I see a Transamerica ad… and, literally, I can’t remember ever seeing a Tranamerica ad… in fact, I wasn’t even sure the company was still in existence.

That, and the fact that IT’S MY DAD’S BIRTHDAY, makes me think my dad had something to do with the ADSK pop today.

Thanks, dad!  :)

 

 

Transamerica Pyramid

 

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Trump is getting blasted for — all of a sudden — unilaterally — announcing he’s levying a 25% tariff on steel and 10% on aluminium.  Outside of the steel and aluminium industries, you’d be hard pressed to find anyone supporting his actions.  Heck, there are even executives within those industries that don’t support his actions.

I disclaimed in my previous post on this topic that I’m no expert on trade, but the more I hear about how the rest of the world treats us in trade, the more I continue to agree with Trump that it’s time to create a more balance playing field.

But now, I’m even liking the way he’s doing it.

Apparently many of the trade structures in place had their origins in the 40’s… for example, helping a war-torn Japan and Germany get back on their feet (and not repeating the mistakes of the aftermath of WWI), helping an embryonic China move into the modern world, and so on.

Huh?  That’s was about 80 years ago!  For the last decade I’ve watched — first hand — tech companies tip-toe around China… either burdened with requirements that make us non-competitive… or, worse, getting blocked altogether.

I’ve been writing about Autodesk recently.  It occurs to me that they can be, in fact, the poster child for this entire topic!

AutoCAD is the de facto standard technology tool for construction all around the world — except China.

Want proof?  While China is always a big topic in many companies’ earnings call, the word “China” wasn’t even mentioned in Autodesk’s last two earnings transcripts (here and here).

Why?  Because there’s a Chinese company called ZWCAD that makes an AutoCAD-clone product and guess which product the Chinese government wants sold in China?

A Chinese company, by the way, that was caught red-handed stealing AutoCAD intellectual property.

So I continue to be with Trump on this issue… and upon further reflection am happy he’s playing the “mad man” card and throwing it directly in their grill.

America is, after all, the world’s biggest market.  If we’re really getting taken advantage of, then it’s time we stopped getting taken advantage of.

I’m very surprised I’m about to say this — but maybe this one is within Trump’s wheelhouse:  His juvenile, bullying, play-ground antics may be the most effective way — may be the only way — to get everyone on the playground to play fair.

Autodesk (ADSK) has its earnings call next week.

Recently Caterpillar (CAT), John Deere (DE), and The Home Depot (HD) all nicely surprised to the upside.  Could these proxies bode well for ADSK, too?

While the market was down today, ADSK was actually up most of the session and only dipped as the Nasdaq took a dive toward the close.  I think this show of strength is a positive sign as well.

I get that ADSK is expensive, in transition, etc., etc. But I used to compete against AutoCAD. They own the market.  Actually, they own a few markets, including general CAD and Hollywood animation stuff.  Both construction and Hollywood are on fuego, yet more positive indicators.

I also get that ADSK stumbled after their last earnings call.  From an all-time high, the stock tumbled some 20%.

As best as I could determine, though, it was a series of items blown out of proportion that stung them.

For example:

* They announced a layoff, which always sounds bad.

But when you listened to the conference call (and subsequent CEO interview), the layoff wasn’t a, “we’re doing badly” kinda layoff, rather, it was a, “we’re changing our business model from product to subscription so that’s going to streamline our infrastructure” thing.  In other words, it sounds like good, proactive management.

* ADSK had a few less subscribers than expected, and they lowered the top end of their subscriber projections from 675K to 650K, which also sounds bad.

But people didn’t want to hear the reason why: Because they’re finding that each subscription is worth more than they thought.

I thought the CEO was very open and positive about this… he said subscriptions is a relatively new thing for ADSK so they’re still learning how to project appropriately… and he immediately followed that up with something to the effect that while they guessed subs a bit too high (in actuality off by less than 3%), they guessed a bit too low on the value of each subscription (sub revs were up over 105.6%), which the CEO (and I!) thought was a perfectly fine trade-off.

Note they kept the low end of the range (625K) intact, which I think is also a good sign (i.e., nothing is “crumbling”).

* The headlines were wrong! Investors.com said, “… delivered disappointing fiscal third-quarter results and guidance”… yet, they beat on both the top and bottom lines and revised guidance upwards. I firmly believe that — in the rush to get out news — if the starting headlines are wrong, unfortunately everyone follows suit… in these days of instant news, there simply isn’t time to properly analyze.

Of course I’m trying to read tea leaves here… but I think ADSK could see an earnings pop… maybe amplified by what I believe was an overdone (erroneous?) pounding after last earnings release.  We’ll see next week!

 

3/7/18 UPDATE:  ADSK REPORTED EARNINGS YESTERDAY AND TODAY WAS UP ALMOST 15%.  :)