The Altium Limited (ASX: ALU) share price has underperformed the S&P/ASX 200 Index (ASX: XJO) this year. However, there are still experts who believe the printed circuit board software company offers an enticing proposition.
At the close of trade today, the Altium share price finished down 1.93% to $33. Unfortunately, investors are in the red year to date by 2.91%.
Expert bullish on Altium share price
While some investors might worry about the lack of performance from Altium recently, portfolio managers at investment fund Smallco don't share the same concerns.
According to the fund's June quarterly update, Altium remains one of Smallco's largest and longest-held positions in the Smallco Broadcap Fund. However, the exact weighting is not disclosed.
Furthermore, Smallco referred to the inevitably rejected takeover bid from Autodesk, Inc. (NASDAQ: ADSK) for Altium. The non-binding offer made in June was for $38.50 per share. This represented a 41% premium to the previous trading price.
Altium has been pursuing a strategy of industry transformation through dominance. With the largest pool of PCB design users, a rapidly growing cloud product and the industry leading search engine for electronic parts, Altium is uniquely placed within the industry to execute on its vision to create a platform that connects the electronics and product design worlds to the electronics supply chain and manufacturing partners.
Based on the above statement from Smallco, it seems the fund also considered the offer to undervalue Altium's growth prospects. These prospects and the Altium share price will be in the spotlight come 23 August 2021, with the company set to report its FY21 result.
Brokers take on the company
Analysts at Bell Potter also took another look at Altium after Autodesk walked away. According to the note, the broker retained its hold rating but decreased its price target to $35.
The reasoning is based on how quickly Autodesk lost interest in acquiring Altium. Additionally, the broker didn't rule out further takeover interest. However, the incident with Autodesk leads the brokers to think valuation is an obstacle.
Based on the current Altium share price, the PCB software provider has a market capitalisation of $4.37 billion.
