Citron Research Is Causing 3D Systems Inc. Stock to Crash. Should You Care?

Known for its extremely bearish stances, research firm Citron Research has come out with a report detailing a long list of red-flag reasons for investors to be bearish on 3-D printing company 3D Systems (NYSE: DDD  ) . Shares of the company are down around 17% over the past five days, initially selling off as the overall market pulled back this week, but really accelerating once this report came out.

Among other things, the report highlights growth problems with the company, saying that acquisitions cannot maintain this pace, that the company's recent acquisitions have been uninspiring, and that 3D Systems' organic growth rates are misleading. The report also discusses poor reviews of working for the company from employees, as well as an R&D budget that is spread too thin over too many projects, leaving the company a jack of all trades, master of none. By comparison, the report has several positive things to say about competitor Stratasys (NASDAQ: SSYS  ) .

In this video, Fool industrials analyst Blake Bos takes a good look through the report, and tells investors what he thinks of 3D Systems today, and of investments in the 3-D printing sector as a whole.

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Read/Post Comments (5) | Recommend This Article (11)

Comments from our Foolish Readers

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  • Report this Comment On January 27, 2014, at 6:36 PM, aduclos wrote:

    Does this mean we should be selling?

  • Report this Comment On January 27, 2014, at 10:21 PM, TMFBos wrote:

    @aduclos

    That's a personal financial decision that you'll have to make up on your own, but when I invest personally I generally don't sell unless the reason I invested changed. So if a person invested in 3D Systems because they like the company's growth strategy and business model, and it's the same situation today as it was when the stock was purchased; there'd be no reason to sell.

    For instance, i recently sold my position in Omega Protein because it was a value play, and the valuation had risen to what I was looking for so the strategy had played out, and i sold.

    For DDD no one knows 100% how the company and its stock will do going forward (if they say they do, they're not being honest). A person either believes the company will continue do well or it won't. I think investors really need to focus on allocation when it comes to high risk stocks like DDD, and making sure large parts of their overall portfolios aren't entirely 3d printing stocks. This sector is incredibly volatile and that volatility combined with a large portfolio concentration generally leads to bad investment outcomes for the average human being.

    Best,

    Blake

  • Report this Comment On January 28, 2014, at 12:55 PM, Viking1931 wrote:

    I think Dan Kaplinger may have erred. He said dividends are subject to double taxation since companies have already paid taxes on their earnings before they distribute dividends.

    But is that germane under existing tax law? I get dividends from one of the companies he cited and it is "qualified" thus not subject to tax, tho I must report it to the IRS.

  • Report this Comment On January 29, 2014, at 1:19 AM, momklok wrote:

    Please, please, have your commentators slow down and enunciate. Blake Bos's report on DDD was almost unintelligible.

  • Report this Comment On January 29, 2014, at 5:54 PM, djb194 wrote:

    I'm bearish on listening to that guy talk again. Please tell him that it is okay to breath and pause between sentences.

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