Why 3D Systems, Clean Energy Fuels, and Buffalo Wild Wings 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.

At first glance, it looked like the stock market might give up all of its gains from yesterday, with stocks coming out of the gate with a big decline near the open. But throughout the day, the market clawed its way back, finishing with only modest losses. However, that didn't help shareholders in 3D Systems (NYSE: DDD  ) , Clean Energy Fuels (NASDAQ: CLNE  ) , or Buffalo Wild Wings (NASDAQ: BWLD  ) avoid substantial losses on Wednesday.

3D Systems (DDD) plummeted 15% after the 3-D printing specialist issued a profit warning in its preliminary full-year 2013 results. The company said that revenue would fall within its previously guided range, but it reduced its guidance range for adjusted earnings, with the new midpoint of $0.85 per share representing a 13% drop from the midpoint of its previous expectations. Yet even though consumer demand has been a problem for 3D Systems, the company's products are still popular among industrial customers. Even though the industrial side of the business arguably has more intense competition, today's news shows that 3D Systems will need to succeed on both industrial and consumer applications in order to make the most of the huge opportunity that 3-D printing offers.

Clean Energy Fuels (CLNE) dropped 14%. Many traders blamed a negative assessment of the company on Seeking Alpha for the downward action today, but another more general concern involves the soaring price of natural gas lately. Given that the whole basis for Clean Energy Fuels' business model hinges on it being cheaper for transportation companies to use nat-gas as a fuel rather than oil-based fuels, rising nat-gas prices could dissuade users from converting. That would threaten the company's existence, even though natural gas would have to rise further from current levels to eliminate the potential cost advantages for commercial users.

Buffalo Wild Wings (BWLD) fell almost 10% after reporting earnings last night that included a 12% rise in revenue and same-store sales increases of 5.2% at company-owned restaurants and 3.1% in franchise locations. Even though CEO Sally Smith said that she still expects Buffalo Wild Wings to post 20% earnings growth this year, shareholders wanted even faster growth from the restaurant chain. Despite an early rise right after the announcement, investors changed their mind after more-cautious comments in the conference call led them to second-guess their optimism. The stock's move shows just how much investors expect from high-growth prospects in today's shaky market environment.

Is 3-D printing a bubble waiting to pop?
The revolutionary technology of 3-D printing promises to change the way companies around the world manufacture goods. But as 3-D Systems showed today, the trick now is to identify the companies -- and thereby the stocks -- that will prevail in the battle for market share. To see the three companies that are currently positioned to do so, simply download our invaluable free report on the topic by clicking here now.


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  • Report this Comment On February 05, 2014, at 8:07 PM, rhines81 wrote:

    DDD was trading in the mid-90s --- now in the mid-60s (mid-50s could have been had during the course of the day). Losing close to half its market "value" in the past couple of weeks. This stock was waaaay over-valued even in the mid 60s and it should have been dumped at the huge premium that it was trading at several weeks ago. Lead a pig to water and they can't make mud. I hope at least some of you saw the light and made some good coin. Certainly - buy it again when it is fair value in the mid-40s and ride it back up. If it pops then sell it and wait for the inevitable price drop back to sanity again. Retrospectively - this was not a buy-to-hold stock --- it is an artificial hype stock that needs to be 'managed' closely. Holding will only cost you a ton of potential gain.

  • Report this Comment On February 05, 2014, at 8:59 PM, wrenchbender57 wrote:

    I agree with rhines81, at least partly. DDD has been the most profitable stock I have ever owned, so far. I bought 300 shares some time ago. After the value went through the roof I sold 100 shares. Then the stock split 3 for 2. So I now owned 300 shares again. After even more increases in the stock I ended up selling 200 of those shares and keeping 100. The stock has cost me nothing at this point so why not keep it? And I still think the company has great potential. But, if the PE gets way out of wack again I may sell that 100 shares and buy back later when it drops.

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