3-D Printing Gets Upgraded by Wall Street. Should You Care?

Shares of 3D Systems (NYSE: DDD  ) and Stratasys (NASDAQ: SSYS  ) popped today on news that Citigroup analyst Kenneth Wong initiated coverage of these two stocks with a buy recommendation. In this video, Motley Fool industrials analyst Blake Bos tells investors why analyst recommendations may not be a very sound reason to invest and takes a look instead at several things 3-D printing investors need to be watching with these two companies' fundamentals.

With the U.S. relying on the rest of the world for such a large percentage of our goods, many investors are ready for the end of the "Made in China" era. Well, it may be here. Read all about the biggest industry disrupters since the personal computer in "3 Stocks to Own for the New Industrial Revolution." Just click here to learn more.



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Comments from our Foolish Readers

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  • Report this Comment On August 28, 2013, at 9:43 PM, ScottAtlanta wrote:

    Another negatively biased analysis from B. Bos re: 3D....oh, wait, we're not supposed to listen to analysts. But I've never heard you say anything positive about the prospects of 3D....always only "the warning" and "cautions," despite their fantastic performance to date.

    I wonder what it will take for you to admit you're wrong about 3D systems and your boss is right? It was recently a "best buy now" according to the Fool's Stock adviser service.

    Balanced coverage is fine....but I don't ever get a sense of balance from your coverage of 3D...just negative, and now recently "look out, GE is coming"....more negative. Aren't their other examples where the smaller, focused, more agile company wins despite Goliaths like GE....oh yeah, it happens all the time.

  • Report this Comment On August 29, 2013, at 11:02 AM, analyze224 wrote:

    Have been long this name and currently am short. There's much to think about re this company and little clarity re industry and company specific prospects.

    You ask some good questions here and raise some doubts without asserting definite answers, which would perhaps be premature to do.

    Would welcome more pieces like yours, video and written, which focus as you did on specifics rather than simply asking the macro question, "is 3D printing for real," which is probably among the few questions that we have solid answers for this far.

    Yes, there are at least some areas/ markets in which 3D printing will survive and may perhaps thrive.

    Soon, hopefully, we will be ready to move on, as you do in your analysis, to questions we don't have clear answers for yet - and are thus worthy and important questions to ask; questions that are company specific and sub-market specific. Among the many questions that should be posed and carefully analyzed by now - and you touch on this in your video, (thank you), is - "what are the indications thus far re sales of 3D Systems consumer lines of printers?"

    The 2nd generation Cube has been on the market for over a year now, (I believe?), and although national retailers such as Staples have more recently begun to sell it - it's been on Staples.com for a while now and has only a single user review. Also, it was indicated that the Cube would be in Staples' stores in June. Why has that not occurred and what is the specific update re when to expect the printers in stores? Will Staples be stocking these printers in a significant way, or simply putting a few printers in a few stores - with relatively little investment in stock on Staples' part? Has Staples assumed financial risk to date in handling the Cube online, or do they simply purchase printers from 3D Systems as they sell them?

    These and many other specific questions should be asked and considered.

  • Report this Comment On August 29, 2013, at 11:21 AM, pksloope wrote:

    Can you not do as Breakout does and have an article that details the video so you don't have to sit through it? I don't have time or the patience to listen to someone tell me sometime that I can gleam from text in just a matter of seconds.

  • Report this Comment On August 29, 2013, at 1:18 PM, TMFBos wrote:

    @ScottAtlanta

    Sorry if I'm coming across overly negative to you. I'm definitely not bearish on the future of additive manufacturing; I'm just not willing to pay the prices in today's marketplace to participate in the technology. I think words of caution are extremely valuable in times of market euphoria; the financial and stock performance of these companies has been incredible, but as we all know past performance is not a guarantee of future performance. Especially as it relates to stock price movements.

    In my personal investing I always weigh the risk and reward. For all of the AM stocks the risk is too high for me considering the potential reward. This could cause me to miss out on a big return in the future, but the strategy works well with my particular investing temperament. This doesn't mean it's the best strategy for everyone, just for my personal temperament.

    In regards to GE; I think investors should definitely pay attention to what moves they're making. That doesn't imply GE's presence means all other AM companies will suffer. Just that you should pay attention to what the 500lb gorilla is doing in the space. Thanks for reading & watching though!

    Cheers,

    Blake

  • Report this Comment On August 29, 2013, at 1:25 PM, TMFBos wrote:

    @analyze224

    Thank you for the kind words; those big picture 3D articles/video's are getting rather tiresome aren't they?

    I too look forward to getting more information on the sell out of the consumer lines. In my opinion the cube most likely isn't doing that well considering management still hasn't broken out financials for them. I figured they'd do it by the end of the year, but we'll have to wait and see. Although we should be able to tell how profitable the consumer lines are once stratasys reports over the next couple quarters. Makerbot is much bigger from what I've gathered and its results should be broken out in later filings.

    As for the industrial/professional side of the equation; that's largely still smoke and mirrors. Since EOS is one of the biggest players and we can't get any information on them, it's hard to gauge how big the market opportunity is. I'm interested to see if after GE implements the manufacturing process for the LEAP fuel nozzles if other big names adopt large scale AM processes. I'll do my best to keep you posted on the developments!

    Cheers,

    Blake

  • Report this Comment On August 29, 2013, at 4:15 PM, analyze224 wrote:

    Blake,

    Thanks again for your video and for your response to my comment. One more thought re indicators of the Cube's marketplace reception... The reviews on Amazon of the Cube and Cube X, considering both the nature, (not so positive), and the number, (not too many), of reviews it would appear that many consumers are also expressing a preference for other manufacturers' printers...not only Makerbot's Replicator printers, but also the FlashForge and Afinia printers. Yet, all we seem to hear about, (your thoughts in your video excepted), time and again, when there are specific mentions of 3D Systems' consumer lines is "STAPLES IS SELLING THE CUBE!"

  • Report this Comment On August 30, 2013, at 11:59 AM, ikkyu2 wrote:

    Don't fight the tape.

  • Report this Comment On September 04, 2013, at 11:07 PM, ScottAtlanta wrote:

    @BBos -- I read and watch b/c you are the person who either volunteers or has been assigned coverage of the AM space.

    I own stocks here and monitor coverage, including yours however annoying I may at times find it...just like I pay attention to other people I don't agree with.

    I do thank you for taking time for your direct response. I understand your concerns and I'm glad you share them -- in fact I want to know the possible challenges to a company. However, focusing almost exclusively on negatives to get the "warning" out, in the context of an extremely successful company -- is likely to cause investors to tune out. By not acknowledging the reasons that so many are investing, including your own boss who recently labeled 3D as a "best buy now," you are actually biased to the negative. As you put it, from your perspective the prices are too high due to (unrealistic) euphoria -- your bias against the value of the stocks is clear.

    A sports metaphor may help. If you go to the championship of your home sports team and meet the cheers and euphoria of your colleagues exclusively with "warnings and cautions," without a single acknowledgement of the positives that got them to the championship...they'll throw you out of the bleachers. Here, people will just tune you out. And that would be a shame b/c they'd miss out on any insights you might offer.

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