What a Difference a Year Makes for 3D Systems Corporation (DDD) .
One year ago, 3D Systems was trading $80 per share and was flying high. It seemed the future of three dimensional imaging was so pure I would soon have the ability to create a perfect working image of my dog barking and pooping using nothing more than a fax machine. This idea was so appealing because I just watched John Cusack in Hot Tub Time Machine, and now I know that anything is possible. Similar to the aforementioned movie, I warp back to Earth, where, in April 2014, imaging stocks were worth half their previous market caps. While 3D Systems was on its way to $30 - down from $80, and losing 60% of its value.
Looking back, 3D Systems share price fell for the same reasons all stocks fall - the multiples get ahead of themselves, and the large mutual funds drive the price higher as they accumulate a position. Conversely, when they exit, they drive shares lower.
This is what happened to 3D Systems last year when mutual funds started unloading after back to back bad quarters by 3D. Those of you who have not looked at this sector 3D Systems, they operate as a provider of 3D printing-centric design-to-manufacturing solutions. Its 3D printers convert data input from a computer aided design generated software format or 3D scanning and sculpting devices to printed parts. The company primarily serves manufacturers of automotive, aerospace, computer, electronic, defense, education, consumer, energy, and healthcare products, as well as original equipment manufacturers, government agencies, universities, independent service bureaus, and individual consumers.
Hot Tub to 3D Systems' Future
Hot tubbing forward to February 2015, 3D Systems is finding its footing, for me, this is always reflected in its share price, and seems to be putting in a bottom as the mid 20’s brings buyers. I believe these buyers represent short sellers who know they need to cover there, and value buyers who want a piece of the future (which DDD is). Imaging and the creation of objects out of thin air will be big business. I asked a few auto enthusiasts about getting proper parts, and they grasped the concept fully. 3D has multiple industries it can service, and a healthy sell off in share price can make companies stronger because they are forced to make hard decisions about key personnel. I know the management team at 3D had to swallow hard in 2014, but a look at insider transactions tells a bottoming story for me.
I may not be able to to recreate my dog or retrofit a Van Gogh ear, but I can get an inexpensive part for a 57 Chevy instead of scouring the junk yards, while Boeing can have a reliable engine part made without undoing a production line. The applications are vast, and the marketplace is growing, not shrinking. These are reasons the average consumer invests in Facebook Inc. (FB) and diversifies with 3D Systems. The reason I choose to follow 3D? It prompts me to watch Hot Tub Time Machine 2.
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