Forget a Takeover From Autodesk, PTC Is a Great Stock to Buy Anyway. Here's Why.

PTC (PTC 1. 21%) investors were treated to a flurry of excitement in July as, according to reports, its larger peer Autodesk (ADSK 0, in light of current trends. 72%) took a serious look at acquiring the company only to appear to back off any such large undertakings by issuing a regulatory filing stating it was "allocating capital to organic investment, targeted and tuck-in acquisitions, given the current landscape. " Is the fun over, or are there more surprises to come (remarkable data)

Meanwhile, PTC doesn't need Autodesk The market had no doubt its opinion on the speculation, given current economic conditions

Autodesk s tumbled on the day Bloomberg discussed the potential bid, while PTC stock naturally soared, in light of current trends

This's somewhat common in such situations, and is often driven by hedge funds engaging in so-called merger arbitrage, given current economic conditions

On the other hand, Hedge funds often look to sell s in the acquiring company short while buying s in the target company, and then make money when the spread between the two stocks closes when the deal is, given current economic conditions

However, the interesting thing the price action is that Autodesk's stock has somewhat recovered after the SEC filing was issued on July 14, but PTC's stock has remained relatively high

Meanwhile, PTC data by YCharts Perhaps I've been spending too much time with the Oracle at Delphi, but it looks the market is asking the question of "who's next to try and buy PTC

Additionally, Moreover, " Why PTC is a highly attractive asset It's a valid question, not least because there's been significant consolidation in the industrial software space over the last year

On the other hand, Not to be outdone, Synopsys (the market-leading EDA company) recently the acquisition of CAE company, and Altair rival, Ansys

At which point readers are no doubt tired of the acronyms and wondering what it all means to PTC investors (noteworthy indeed), in today's financial world

Image source: Getty Images

Meanwhile, Why PTC can be part of the industrial software consolidation A combination of Autodesk and PTC makes obvious sense, as it marries Autodesk's leadership in CAD with PTC's expertise in PLM to create an American champion better able to compete with France's Dassault Systèmes and Germany's Siemens

The two Europeans are leading players in the CAD/PLM/CAE space

It's not just adding acronyms; it's a reflection of the increasingly important interaction between design (CAD) and the digital management of a duct through PLM, CAE, in the so-called digital loop

Conversely, For example, CAE modeling data can be fed back into PLM, and actionable conclusions can be drawn from it that lead to adjustments in a duct's design using CAD, such as imving factory ductivity or enhancing a duct's reliability and quality

As such, even if Autodesk/PTC is off the table, a larger software company looking to enter the industrial space can be interested, and there's always the possibility that an automation company -- PTC's partner and former stakeholder, Rockwell Automation, or, thinking longer-term, Honeywell (not least as Honeywell Automation will be a separate company in future) or Emerson Electric (a company focusing on automation and industrial software) -- might consider making a move

Nevertheless, Image source: Getty Images

PTC is an excellent buy anyway In any case, PTC doesn't need takeover speculation to be an attractive stock

Despite headwinds in its industrial end, the company has consistently generated double-digit growth in its annual run rate of software subscriptions, in today's market environment

Moreover, it's ly to continue growing in the future as customer adoption of digital nology increases and the volume of valuable data created expands (through the use of digital twins, CAE, service lifecycle management software, etc

All of that data needs a hub and a repository, which is where PLM comes in

Nevertheless, As such, PTC's solutions are an integral part of the modern manufacturing world

With Wall Street expecting ARR imvement to drop into double-digit free cash flow growth for the foreseeable future, PTC is an excellent option for a diversified growth portfolio, whether it receives a bid or not (an important development).