Why 3D Systems, Stratasys, and CalAmp Tumbled Today

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

In advance of the Christmas holiday, the stock market continued its gentle upward path to new record highs on Tuesday. Gains in the overall market came from good news on the economic front, with rising home prices and strengthening orders for durable goods putting investors in a good mood. But 3D Systems (NYSE: DDD  ) , Stratasys (NASDAQ: SSYS  ) , and CalAmp (NASDAQ: CAMP  ) bucked the upward trend, posting losses that put them among the worst performers of the day on Tuesday.

For 3D Systems, not even positive news was enough to keep it from falling more than 5%. Analysts at Canaccord Securities raised their price target on the stock to $95, citing new consumer products that could help the 3-D printing company expand its distribution channels and gain exposure. Yet with two company insiders having sold shares of 3D Systems stock recently, including CEO Abraham Reichental's $2 million sale couple weeks ago, investors who just learned about the insider sales in a Barron's report yesterday might be concerned about the appearance that the stock's upside could be limited.

Elsewhere in 3-D printing, Stratasys dropped 4%. The move reversed gains from yesterday, when the 3-D printing company got an upgrade from analysts at Gabelli. Those analysts argued that printing-material innovations like nylon could open up new opportunities for the company, with potential to differentiate Stratasys from 3D Systems and other rivals.

Despite the corrective moves for both 3D Systems and Stratasys, the real test for both stocks will come at the Consumer Electronics Show early next month in Las Vegas. There, the two companies will go head-to-head with each other and competing 3-D printer makers, each trying to establish dominance over the rest of the pack.

CalAmp dropped 7% after its earnings guidance for the current quarter last night failed to meet investors' expectations. The maker of wireless communications equipment produced better revenue and net income for its fiscal third quarter than analysts were looking for, but its prediction for sequential downturns in earnings and sales didn't sit well with investors who had bid up the stock to a relatively high valuation. Still, the stock has tripled since the beginning of 2013, reflecting the better prospects for increased telecom and networking spending throughout the tech sector.

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  • Report this Comment On December 25, 2013, at 8:27 AM, OkieKid1868 wrote:

    CEO Abraham Reichental's sold 25,000 shares from a total holding of 1,639,054. By the looks of it that is 1.5% of his total holdings, to me this looks like a smart man taking a little profit.

    If people are really selling on this type of news, then where in serious trouble when the market takes a big dip. The company is sound people who are worried should really take a look at the balance sheet. The company has cash on hand, a low debt to equity ratio, and vision that is taken right out of the play books of Apple.

    I personally agree with their approach to buying up companies that are an asset to their product. This affords them to focus are the real R&D they need to develop their core product the printer.

  • Report this Comment On December 25, 2013, at 9:55 AM, doubleblink wrote:

    3D Systems "head-to-head" with Stratasys? I don't really see it that way. Sure, on the surface they're competing with each other, but this is more of a Xilinx v. Altera type competition. Both Xilinx and Altera are really competing against the ASIC market. 3D Systems and Stratasys are really competing against traditional manufacturing. In other words, they are both taking market share away from traditional manufacturing which is a huge market place, and less so from the 3D printing market place which is peanuts by comparison. Just a thought...

  • Report this Comment On December 25, 2013, at 12:39 PM, MountainEdge wrote:

    Well, here we go again. I have no doubt 3D Systems will introduce more models at the consumer electronics show. The stock will go up again. No one will ask how will these new models impact existing sales. Analyst will certainly not ask management to separate the professional products from the consumer products and show the true profitability or lack of profitability.

    Management will no doubt continue to claim they have the best 3D technology, while adding to the 45 acquisitions they have already done. Hell, revenue grew 50% this year with these acquisitions.

    You have to love it.

  • Report this Comment On December 26, 2013, at 3:29 PM, hacker44240 wrote:

    ...Meanwhile, one day later, 3D printer stocks are soaring to all time highs...

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