When trends or macro events unfold, it is hoped that an investment in a company associated with the movement will translate into profits. The added attention on design software due to interest in 3-D printing has piqued investors' curiosity in the area as an alternative way to play the growth in 3-D printing. For investors looking at Dassault Systemes (NASDAQOTH: DASTY ) as a means to capitalize on the future of manufacturing, it's crucial to make sure the company passes a very simple checklist:
- Does the company have a competitive and well liked product?
- Does the company have sufficient insider ownership?
- Has the company continually issued shares and diluted shareholders?
- Are there any worrisome related-party transactions taking place?
- Do employees enjoy working at Dassault Systemes?
- Is there a growing marketplace for its product?
- Given the company's market and growth opportunities, is the stock priced attractively?
These questions are always a great starting point when looking at any new company, and can help investors save time by weeding out bad investments early on.
In the video below, Motley Fool analyst Blake Bos will take a look at Dassault Systems and its competitor, AutoDesk (NASDAQ: ADSK ) , to see if the company passes the passes the above checklist. Then he'll tell investors if they should think seriously about investing in this leading computer-aided design company.
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Editor's note: At the 2:52 mark in the video, Blake briefly misspoke. He meant to say,"Investors can expect to make a 5% return in Dassault shares based on free cash flow, and have that ramp up to a 10% return over the next seven years if it can grow cash flow at 10% per year on average." The Motley Fool regrets the error.