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Autodesk, Inc. (ADSK): Stephen Mandel is Bullish and Discloses 5.3% Stake; Should You Follow His Lead?

Autodesk, Inc. (NASDAQ:ADSK) has been recently added to the equity portfolio of Stephen Mandel‘s Lone Pine Capital. The fund revealed ownership of around 11.96 million shares of the company’s common stock. The passive stake amasses 5.3% of Autodesk’s common stock and has a value of around $696.66 million, at the current price of the stock.

Lone Pine Capital 2014 Q3 Investor Letter

Mr. Mandel has some great stock picking skills, investing in companies like Baidu Inc (ADR) (NASDAQ:BIDU), which is currently the largest position in Lone Pine Capital’s $24 billion equity portfolio. The fund initiated a stake in the company during the third quarter of 2013, with the stock gaining over 50% since then. As of the end of the second quarter, Lone Pine owns around 8.92 million shares of Baidu, up from 5.29 million shares held initially. Overall, Lone Pine, which is one of the largest hedge funds in the world, under Mr. Mandel’s management returned over 20% during more than a decade of its existence, beating the S&P 500 by a big margin. The fund has a diversified portfolio, which consists mainly of Services and Technologies stocks.

However, despite a good track record, Mr. Mandel’s picks have not performed well during the first nine months of 2014. As Mr. Mandel stated in his letter to Lone Pine’s investors, its Lone Kauri and Lone Cascade funds declined by 2.1% and 0.9% respectively, while Lone Tamarack appreciated by 1.7%, all three funds underperforming the S&P 500 Index’s return of 8.3%.

At the end of September, Lone Pine Capital reported raising its stake in Tiffany & Co. (NYSE:TIF)’s by 2.61 million shares to 6.85 million shares, equal to 5.3% of the company’s stock. The position in Tiffany & Co. (NYSE:TIF) was initiated during the first three months of the year, initially containing around 2.65 million shares, and later was increased to 4.24 million shares. Meanwhile, Tiffany’s stock appreciated by around 1.7% year-to-date.

Nevertheless, let’s get back to Mr. Mandel’s recent investment in Autodesk, Inc. (NASDAQ:ADSK). The $13 billion technology company is engaged in design software and services having in its portfolio well-known products such as AutoCAD,AutoCad Architecture and 3ds Max, among others. Autodesk’s stock returned 39% over the last year and in the middle of October it slumped from approximately $58 to $51 per share, although it quickly recovered. The decline came amid Autodesk, Inc. (NASDAQ:ADSK) reiterating its financial expectations for the third quarter of fiscal 2015 (ending October 31). The company expects revenue growth between 7% and 9% to $590-$605 million, while GAAP EPS are expected in the range between -$0.05 to $0.01.

Aside from Lone Pine, another investor betting on Autodesk, Inc. (NASDAQ:ADSK) is Eric W. Mandelblatt‘s Soroban Capital Partners, which owns 9.15 million shares of the company as of the end of the second quarter, followed by Ricky Sandler‘s Eminence Capital with 6.0 million shares. However, while Soroban’s stake in Autodesk amasses close to 3% of its equity portfolio, Eminence commited around 5.6% of its 13F portfolio to the holding.

Moreover, last month, several insiders revealed selling shares of Autodesk, Inc. (NASDAQ:ADSK). A director of the company, Betsy Rafael (who is also the VP, Corporate Controller at Apple Inc. (NASDAQ:AAPL)) sold some 4,200 shares of Autodesk at $58.47 per unit and Pascal Di Fronzo, senior VP, General Counsel and Secretary, sold 393 shares at $56.74 per share.

In this way, Autodesk, Inc. (NASDAQ:ADSK) should be an interesting stock to watch for retail investors, even though it currently trades close to its 52-week high, and as the filing shows, Lone Pine initiated a stake while it was still recovering from its decline. However, with other investors also owning significant stakes, Autodesk might be a good position for the long run, especially, taking into account that the stock has an average target price of over $65 per share.

Disclosure: none

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