Anyone else riding this wave?
I started following SSYS, DDD, XONE, and AMAVF a few months ago. I know I’m a little late to the game, but these guys are putting together some great numbers. I picked up a few shares of AMAVF on Monday. Planning on building a good-sized position over the next couple weeks. Actually would like to see it pull back a bit but it won’t go down.
Look at this application! You can copy someone’s key, using just a photograph (at 200 feet distance)
http://www.popsci.com/scitech/article/2008-11/duplication-distance
Too much volatility and trading-driven activity in the sector for me, but sounds like a promising technology over the longer haul…
My favorite note on the sector was for DDD, by Piper Jaffray on 2/19/13. Title: “3-D Printer Saves My Marriage, Ugly Beige Falcon on eBay”
I think it has huge potential. Whats tough is what Numi noted, plus you need to accept there may be some dilution coming your way and likely winners/losers. I knows SSYS the best, I was about to buy a bit and then they popped on earnings this week. But overall if you have vision it seems promising to me.
XONE and DDD are notoriously volatile. XONE especially, ‘hard to borrow’ and they don’t have listed options on them. These plays have been going on for a year at least, if I were you, I would just set a wide stop loss, and then just sit on the sector for the intermediate to long term.
The gyrations will give you diarrhea if you are simply staying long.
The fund I used to work at was long and short DDD at different times and made money on both sides. I love the technology and think it will revolutionize manufacturing in coming decades but I don’t know how I feel about the stock, seems expensive with the wrong kind of investor in it for me to want to go long. If I bought here and shut my eyes for 5 years I’d probably do well though. I take tons of small positions with a 3+ year time horizon so DDD might make sense for me, but there’s no way I would do that in a concentrated fund. Probably I’ll just sit on the sidelines and beat myself up if I don’t buy any and it goes way up (seems legit).
IMO, SSYS is a better run company than DDD, but SSYS keeps buying up smaller printers. Kind of an expensive way to grow the business. Then you have XONE and AMAVF. XONE isn’t profitable despite decent sales. AMAVF is the fastest growing and cheapest of the bunch. Plus, daily volume has been trending consistently higher. It’s already up 600% this year though.
Any estimates on whether growth is already priced into valuations? If they’re very volatile, of course, then there is room to trade them, I suppose.
These stocks strike me as one that can lure dumb money very easily with some kind of “unlimited growth potential” story. That’s the danger. However, it does seem like one of the more promising technologies being developed these days.
There is a LOT of growth priced into valuations but nobody really knows what the right number is. Have seen these guys present at recent investor conferences and the rooms are always packed with investors from trading-oriented and growth-focused shops. Occasionally you see some value guys in the room, presumably looking at these companies as shorts – obviously there are bears out there as evidenced by the high short interest – but I never like being the first to a short. Give me one or two choppy quarters to inspire doubt in investors before I put on a short position. I think a lot of the guys that have shorted the 3-D printing companies to date probably feel once bitten, twice shy…
I’m going balls deep in this industry. AMAVF is working out nicely. Legging into DDD and eventually SSYS. Picked up a very little bit of SGLB yesterday. That one’s a long shot but good potential.
I’ve spent a lot of time reading up on the impact on the manufacturing industry 3D printing is going to have over the next decade…the applications are limitless. The trick will be buying the Googles and Amazons, and staying away from Lycos and Pets.com. I’m pretty excited about where this could go; and making some money off it.
I read a really hard hitting, excellently stupid post by someone on WSO who said that there’s a good chance 3D printing won’t have caught on in the next 200 years (not a typo). I don’t post on that website but I was flabergasted. Within 1-2 decades, 3D printing will have revolutionized manufacturing. It’s not even a debate worth having, anyone who can’t see that is clearly just completely wrong.
I recently saw a 3D printed liver tissue that pharma companies are going to use for toxicity tests. Cray.
I saw that post and almost laughed myself to death. It was probably a disgruntled short-seller, what a loser.
http://www.wallstreetoasis.com/blog/is-3d-printing-the-next-big-thing
I guess this person never learned the first rule of short-selling – don’t short open-ended growth stories before they prove that they’re broken. The bulls are dominating and already are telling the bears that they don’t care about valuation. Oh well. I agree that 3D Systems is probably a scam of some kind, who knows what’s going on with their revenue recognition and what seems like categorically overpaying for acquisitions. But the market opportunity here is huge, and this is an investment banker’s dream – they LOVE to underwrite companies such as DDD that are highly acquisitive and capital intensive. They will try to keep DDD propped up as long as they possibly can to collect brokerage fees. Hell would have to come close to freezing over before anyone other than William Blair would cover this as an Underperform…but I guess it makes sense since William Blair was left out of DDD’s bookrunning club. Oops!
I’m not saying that DDD isn’t a short at some point. There are just much better risk-adjusted ways to win. I can think of multiple ones this earnings season. My only regret is that just like every great short, they are never sized big enough in our portfolio. Sure it’s possible that DDD blows up on their next earnings call, but if it does, better cover fast because the bulls will prop this one up.
I’d only start to play DDD as a short once they’ve missed one or two quarters, or unless I develop some variant affinity for Russian Roulette where I get $1,000 if I win, and if I lose I shoot myself or gouge my eye out.
When people start using their 3D printers to make 3D printers, sales will plummet.
i do see some potential for the industry. just not all that much. i mean, look at 2D printers. they’re starting to die because we don’t use much paper anymore; everything is digital. for the same reason, i don’t see all that much need to print physcial objects. every day, more pieces of junk head online and our time dedicated to physcial objects declines. the personal 3D printer industry will likely never catch on for good, maybe some sort of fad but that’s it. i see some use in niche manufacturing but by the time you create a 3D printer larger enough to create meaningful parts, won’t it be more expensive (either for the machine, or product, or both) than current interations of the same manufacturing machine? in theory, the only real savings comes from transport but the vast majority of popular products that are used daily are produced close to home anyway.
that said, its nice to see STL cleaning up on this what i think to be fad.
That is a bit of a problem with the business model, I suppose.
3D printers are ruled by the same laws as the govern the T-1000 terminator rendering replication of additional 3D printers (or terminators for that matter) impossible.
I’ll be long gone by the time 3D printers become commoditized like traditional printers have become. Another, related, area of risk is when certain patents expire. Several expire next year allowing more companies to manufacture 3D printers, but those are mainly on the retail/personal sized models. AMAVF has a lockdown on the prosthetics industry for a long time, so they should hold up for a while.
DDD reported 3Q13 results this morning, and going back to the points I made earlie in this threadr, this is why it’s very difficult to short a company that hasn’t yet proven that its growth story is broken, and when the market opportunity seems as open-ended as ever. Valuation is basically irrelevant until a chink in the armor is exposed. Actual results for 3Q were in-line with consensus, while full year guidance for revenues was incrementally increased while EPS was taken down.
Sounds like bad news when a company is having a harder time than expected driving margin expansion, right? Well, not quite. After a very short-lived gap-down before 10AM this morning, bullish investors piled back into this stock because they bought into management’s story of ramping up investments to position the company better in the longer term. The story was believable since they took up top-line guidance. Result: stock closed at $59.51, UP $2.62 (+4.6%) on the day.
So, there you go…to all the DDD short-sellers out there, congratulations on being much braver than me.