Image source: Autodesk.
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The stock market finished the week on a sour note Friday, and investors felt slightly more volatility than they had in past sessions. The Dow fell more than 100 points before recovering to cut those losses roughly in half. The primary culprit was the Federal Reserve and central bank chair Janet Yellen, who made comments suggesting the Fed might be more aggressive in raising interest rates in the future than many had expected. Given Yellen's traditional tone of being careful about prematurely tightening monetary policy, the turnaround led to greater nervousness, and that likely justified the sell-off in the overall market.
Some stocks managed to gain ground regardless, and among the best performers were Autodesk (NASDAQ: ADSK), Fiesta Restaurant Group (NASDAQ: FRGI), and Bottomline Technologies (NASDAQ: EPAY).
Autodesk designs strong results
Autodesk gained 8% after the computer-aided design company announced its fiscal second-quarter results Thursday afternoon. At first glance, Autodesk's financials might not seem to justify much excitement, given that revenue fell 10% compared to the year-ago quarter and the company only managed to post adjusted net earnings of $0.05 per share, off nearly three-quarters from fiscal 2016's second quarter. Yet like many of its peers in the software industry, Autodesk has worked hard to try to create sources of sales that repeat each year rather than representing one-time income, and the company said it grew recurring revenue at a 10% rate during the quarter. More importantly, Autodesk gave positive guidance for the fiscal third quarter and the full year, with narrower losses and higher sales than it previously anticipated. As long as demand for CAD software remains strong, Autodesk remains a good long-term pick as it makes a key transition toward a better business model.
Fiesta Restaurant Group looks forward to a positive succession plan
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Fiesta Restaurant Group climbed 9% in the wake of Thursday afternoon's announcement that CEO Tim Taft would retire at the end of the year. The parent company of the Taco Cabana and Pollo Tropical restaurant chains said it would create a search committee to find a successor and work with Taft to create a transition plan to prevent any disruptions in the company's operations. In addition, Fiesta said it would reconsider its previous strategy of separating out Taco Cabana from the rest of the business, in part because of difficult conditions in the restaurant industry right now. Given the difficult time Fiesta stock has had lately, the potential for a change in direction is clearly appealing to shareholders.
Finding a better Bottomline
Finally, Bottomline Technologies gained 12%. The provider of electronic payment solutions and digital banking services released its fourth-quarter financial report, featuring substantial gains in subscription-based revenue that helped push overall sales upward by more than most had expected. The company also managed to grow adjusted earnings from year-ago levels, defying calls for a pullback in profitability. In particular, investors seemed to applaud the fact that more of Bottomline's business is coming from cloud-computing based applications. Bottomline also announced a stock repurchase program amounting to $60 million, which could also help the share price. With so much growth potential, Bottomline could well be poised to climb once the financial industry returns to its former strength.
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