Please ensure Javascript is enabled for purposes of website accessibility

Why Autodesk Inc.'s Shares Jumped 13% in March

By Travis Hoium - Apr 6, 2016 at 9:41AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A deal with activist investors and a new agreement with a competitor helped this CAD company last month.

Image source: Autodesk.

What: Shares of Autodesk (ADSK 10.31%) rose 13% in March after the company signed up an important partner and settled a spat with activist investors, according to data provided by S&P Global Market Intelligence.

So what: Autodesk signed an interoperability agreement with Siemens (SIEGY 3.24%), which will make it easier for customers to transfer files between different CAD platforms. Difficulties with that  can be a major pain point as designers work with manufacturers to produce parts, so being able to use software that is compatible with Siemens' products will be a nice feature for customers.  

The company also reached a truce with activist hedge funds Sachem Head Capital Management and Eminence Capital. They'll vote for the company's board of director nominees through the end of September, including three members recently named to the board.  

Now what: Activist investors tend to be more a thorn in the side of a company's management than a great value to its stock, so the agreement Autodesk made with those hedge funds is an incremental positive for the company. And it may help that shares have had a strong run in 2016, which should ease some of their fears about the lack of value creation.

But long-term, the interoperability agreement between Autodesk and Siemens will probably be a bigger deal. As a former designer, I know firsthand that lack of compatibility between CAD programs can be a huge inconvenience; partnering with one of the largest CAD companies for manufacturing should have a material impact on customers' desire to choose Autodesk as their software vendor.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Siemens Aktiengesellschaft Stock Quote
Siemens Aktiengesellschaft
$65.70 (3.24%) $2.06
Autodesk, Inc. Stock Quote
Autodesk, Inc.
$211.38 (10.31%) $19.75

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.