Hey everyone, here are our two newest buy ratings: ADBE and ADSK stock.
Buy Rating #1: Why Adobe Stock Can Easily Hit $600 (currently $432)
In a previous article, we mentioned why we thought it might have been a good time for investors with a shorter time horizon to take profits on Adobe. Since then, the price of the stock has dropped significantly, shedding 34% of its value.
However, long-term investors who have held on through the volatility shouldn't worry, as we believe the stock can easily return to over $600 eventually. Thus, we are now very bullish on Adobe stock.
What’s good about Adobe is that it remains minimally impacted by macroeconomic events, and it generates reasonably predictable cash flows despite an uncertain backdrop. We also believe that the market is significantly undervaluing ADBE stock.
It is currently in a downtrend, so there may not be immediate upside, but we believe it will recover over the long term.
Find out why we like ADBE by clicking below:
Buy Rating #2: Autodesk Can Outperform Based On Macroeconomic Trends And Good Valuation
Autodesk (ADSK) is an industry leader that has seen its valuation drop significantly in the past few months, from a high of ~$344 to a low of ~$186 recently. It is currently at $212.
As we begin to enter the middle portion of this new business cycle, high-quality companies with high margins and returns on capital are likely setting up to outperform going forward (we explain this more in the full article linked below). As a result, we are bullish on Autodesk at these levels.
Quality-Factor Investing During the Mid-Cycle
In the world of finance, investors like to break down stocks into groups called factors. These factors include value, growth, momentum, and quality, to name a few.
The iShares MSCI USA Quality Factor ETF (QUAL), which we reference in the full article, defines quality as having a high return on equity, stable year-over-year earnings growth, and low financial leverage. ADSK is a holding in the QUAL ETF.
Also, Autodesk is likely a good hedge against inflation and its current valuation is attractive.
Again, this is not necessarily a short-term play. The trend is still down for Autodesk, so it can see some short-term pressure, but the long term looks good.
See why we like Autodesk by clicking below:
Thanks for reading. Hope you found this post useful!
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