Why Shareholders Should Be Angry With Both 3D Systems and Wall Street

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February 26, 2013 | Comments (11)

In the following video, Motley Fool industrials analyst Blake Bos takes a look at why there was so much confusion around 3D Systems' (NYSE: DDD  ) earnings report. Whereas the press release stated EPS of $0.71 per share, this was prior to the split that the stock underwent Friday afternoon, and led to a lot of analyst and investor misinterpretation. The company's share count also increased by approximately 9 million shares, diluting shareholder returns. Blake tells us in the video what the actual earnings per share value is, and gives investors a much more meaningful way to calculate a company's earnings. He also tells us why diversification in 3-D printing investing is important.

3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell, and receive a full year of analyst updates with the report. To start reading, simply click here now for instant access.


Blake Bos has no position in any stocks mentioned. The Motley Fool recommends 3D Systems. The Motley Fool owns shares of 3D Systems and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Editor’s note: To clarify the disclosure position outlined above, The Motley Fool owns shares of 3D Systems through both our Supernova and Pro real-money premium services. In addition to the shares it owns, our Pro premium service has written a “covered strangle” options position on 3D Systems, agreeing when the trade was set up to buy more shares at a lower price, or to sell existing shares at a higher price – while maintaining the ability to close either obligation any time. Finally, 3D Systems is a recommendation in Stock Advisor, which is not a real-money service.


Read/Post Comments (11) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On February 26, 2013, at 2:42 PM, carnegiel8ker wrote:

    lets be clear Fool...a stock split does not "dilute shareholder returns" Its bad enough that the public doesn't understand stock splits, we expect our "experts" to choose their terminology wisely. Obviously DDD management did not do the public any favors by combining a stock split effective date, with an earnings release piled on with a late conference call on the back of only 20 minutes between earnings release and conference call...but the stock split merely increased the number of shares, and decreased (proportionately) the EPS, but since all shareholders ended up with 33% more shares of the company post the split, the valuation of the shares did not change nor did their "returns get diluted"

  • Report this Comment On February 26, 2013, at 2:49 PM, rhealth wrote:

    I applaud the move. The share price fell for questionable reasons and i picked up more shares. Dumb moves like this are what i hope for.

  • Report this Comment On February 26, 2013, at 2:56 PM, TMFBos wrote:

    Sorry if you were misled in the video. I speak to the dilution effects about 2 minutes in, and note thereafter the stock split didn't have an effect. I thought the addition of ~9 million shares throughout 2012 was pretty substantial and worth mentioning. That 9 million is before the the split, and the split in no way shape or form dilutes shareholders returns (see video 2mins 19 secs in), but the ~9M from the sources mentioned in the video do.

    Fool On!

    Blake

  • Report this Comment On February 26, 2013, at 3:49 PM, lynmar79 wrote:

    I'm angry with TMF's, not Wallstreet or 3D Systems. Max put out an article yesterday with incorrect numbers, and there was never a retraction stated in the article...the numbers were just changed late in the day. Also, yesterday TMF's put out 10 articles bashing the stock/company in one fashion or another. Did you really need 10 articles to do that? How many articles have TMF's put out today bashing the stock/company? Really...when it it end?

  • Report this Comment On February 26, 2013, at 5:07 PM, TMFBlacknGold wrote:

    @lynmar79

    The retraction is in fact stated at the bottom of the article.

    Thanks for reading,

    --Maxxwell

  • Report this Comment On February 26, 2013, at 5:42 PM, lynmar79 wrote:

    Was it in the fine print.? Why wasn't it located at the top of the article? You guys are too much...bash away, it's what you're good at.

  • Report this Comment On February 26, 2013, at 5:57 PM, notthisagain wrote:

    The information about a 3 for 2 split, when the shares would be issued, and that the stock price would be changed on the next business day was out weeks ago. It happened just as it was described. How is that different than Coke's recent split? TMF might be confused but no one else should be.

  • Report this Comment On February 26, 2013, at 6:01 PM, andrewupandabout wrote:

    Smoke and mirrors is what the successful investor needs to avoid. If a stock in a disruptive technology is this fuzzy and played with from all angles of the market it's safer to reduce exposure.

    Andrew

    3D Printing YouTube Channel:

    https://www.youtube.com/user/andrewupandabout

  • Report this Comment On February 26, 2013, at 6:17 PM, notthisagain wrote:

    for me comparing the DIY 3D printers to the big companies and industrial uses is like comparing the user built airplanes to Boeing.

  • Report this Comment On February 27, 2013, at 7:09 AM, TangoXray7 wrote:

    @Andrew: Good work. Bad idea. You'll end up being sued for infringement on this. Just because it's Open Source doesn't protect you from IP infringement litigation. I write Open Source software, I'm a big fan of Richard Stallman's work and I don't want to rain on your parade, but you're playing with fire. You will get seriously hurt (legally) if you go down this road.

    Please. Protect yourself. Call it a hobby or whatever, but don't encourage others to do this. You seem like a good, smart person.

    Your Dutch Uncle...

  • Report this Comment On February 27, 2013, at 8:50 AM, slong300 wrote:

    I want to know why I am a TMF member....I thought you guys were amazing until a couple of days ago. I have never seen a company butcher so many numbers and do it so many times each on top of that. You guys would give bumbling gimps a bad rap........I recommend that you guys stop and take a breather. I am ready to sue the pants of you guys for all of the incorrect information and claim that you are doing it for financial game. Stop talking about DDD until you can get a single flipping eps number correct you baboons!!!

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