Is Autodesk (ADSK) Still A Great Buy?

Polen Capital, an investment management firm, published its “Polen Focus Growth” third quarter 2021 investor letter – a copy of which can be downloaded here. A quarterly gross return of 2.78% was delivered by the fund for the third quarter of 2021, outperforming both its Russell 1000 Growth benchmark that delivered a 1.16% return, and the S&P 500 Index that had a 0.59% gain for the same period. You can take a look at the fund’s top 5 holdings to have an idea about their best picks for 2021.

Polen Capital, in its Q3 2021 investor letter, mentioned Autodesk, Inc. (NASDAQ: ADSK) and discussed its stance on the firm. Autodesk, Inc. is a San Rafael, California-based software company with a $68.8 billion market capitalization. ADSK delivered a 2.65% return since the beginning of the year, while its 12-month returns are up by 25.07%. The stock closed at $311.79 per share on October 25, 2021.

Here is what Polen Capital has to say about Autodesk, Inc. in its Q3 2021 investor letter:

“Shares of Autodesk have lagged recently due to expectations of short-term headwinds to free cash flow as the company transitions its billing structure to annual payments from multi-year up-front subscription payments. We view this as a transient issue and believe Autodesk’s attractive long-term growth profile remains in place.”


Based on our calculations, Autodesk, Inc. (NASDAQ: ADSK) was not able to clinch a spot in our list of the 30 Most Popular Stocks Among Hedge Funds. ADSK was in 64 hedge fund portfolios at the end of the first half of 2021, compared to 66 funds in the previous quarter. Autodesk, Inc. (NASDAQ: ADSK) delivered a 1.68% return in the past 3 months.

Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Our research has shown that hedge funds’ small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 115 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

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Disclosure: None. This article is originally published at Insider Monkey.