By Alex Salomon
As some of you may be aware, I have been trading (and even investing in my retirement plan) in 3D printing stocks for a while. Most of the stocks in the 3D universe are currently acting as “mo-mo” stocks, so it has been easy to show good performance.
So naturally, when I told @andrewnyquist that I was going for a quick visit to the 2013 “Solidworks Show,” I was all excited and ready to take notes and report back on my findings. But two weeks has passed since attending the show and my “hot review” has cooled down: the show wasn’t what I expected! Not even close!
The 3D show was geared towards software design (CAD drawing) for 3D printing, rather than 3D hardware demos. There were some very interesting demos (quite a few videos have been posted; of which the highlight has been the smart artificial flying bird), but the show didn’t meet my need; I wanted to see and feel 3D printing galore in action… so I could better wrap my head (and eyes) around select 3D printing stocks of interest.
Granted, I was only there for a brief portion of time and I am a total neophyte at everything 3D: I simply invest in 3D printing stocks representing the industry, so the show’s geek galore was lost on me. But regardless, the show barely gave me the insight I needed to write a financial column about the 3D printing world! It is a great event and deserves praise, but not entirely useful for this profane, wannabe financial blogger!
Although my pre-show excitement quickly vanished, I decided to start a dialogue and plan to write follow up blog posts specifically around 3D printing stocks, offering investing ideas and highlighting sector theses. I plan to eventually expand on some of the following concepts:
- What is 3D printing or “rapid prototyping” and why the excitement?
- Offering up an investment thesis and justifications
- Some trading set ups, as they occur.
To anchor things back to the investment world of 3D, below are some 3D printing stocks that I am following (all hyperlinks point to Yahoo! Finance pages). Be sure to read the disclosure at the bottom of the page.
- DASTY – Dassault Systemes, the actual organizer and sponsor of Solidworks, the world leader in 3D CAD software; +42% in last 2 years
- ADSK – Autodesk Inc., another leading company for software designs and CAD; -10% in last 2 years
- DDD – 3D Systems Corp, one of the top 3 hardware manufacturers, and one of the 2 publically traded; +234% in last 2 years
- SSYS – Statasys Ltd., the other hardware leader currently publically traded; +136% in last 2 years
- PRLB – Proto Labs, a leader in industrial rapid prototyping; +44% in last year
- A slew of smaller companies with small floats, riskier profiles, like Organovo (ONVO) or Arcam (AMAVF)
I plan on learning more about each company, finding other peer companies, looking at their technologies, and finding short-term & long-term investments.
Being that select 3D printing stocks have been red-hot, the main overhang is simple: Are we witnessing a pure bubble, or not?
If you compare the monthly charts of First Solar (FSLR) and 3D Systems Corp (DDD), the question becomes clearer: are we going to repeat the likes of the Solar industry (i.e. Are we already at a major top?)?
FSLR Chart:
DDD Chart:
I will spend more time exploring these questions, but here is a hint of my take on the 3D sector: I think it will be closer to an Amazon (AMZN) story than a First Solar one, for one very important reason: 3D printing is not relying on subsidies; on public funds; on an alternative competing solution that determines pricing and survival. 3D printing is potentially in a world of its own, not unlike the Internet was… and that is why may witness price appreciation of select 3D printing stocks that is more in line with this AMZN chart… But only time will tell!
AMZN Chart:
So, getting past the disappointment of finding small nuggets at Solidworks, I still plan to continue my quest of discovering 3D investing ideas! Stay tuned.
Twitter: @alex__salomon @seeitmarket
Author owns and trades DDD and SSYS, along with accumulating both stocks monthly for long-term investment purposes.
