3D Systems Corporation and Universal Display Corporation: Shareholders Should Buckle Up for a Wild Ride This Week

Find out why these two trailblazers could be even more volatile than usual.

Feb 23, 2014 at 8:00AM

When you're a shareholder in a company that's fundamentally changing the dynamics of multiple industries, you're probably used to huge swings in the stock market. 3D Systems (NYSE:DDD) and Universal Display (NASDAQ:OLED) are two such innovative companies, and their shareholders are likely very familiar with such swings.

But this week, because each company has a large number of investors betting against it, and because quarterly earnings are coming out, the moves could be even larger than normal. Read on to find out what Wall Street is expecting from each company, and what individual investors should be focused on.


% of Shares Short


Expected Revenue (Millions)

Expected EPS

3D Systems





Universal Display





Source: finviz.com, E*Trade.

Screen Shot

Source: 3D Systems. 

3D Systems, a leader in additive manufacturing, is rewriting the rules in everything from industrial manufacturing to health care products. That helps explain why shares of the company ballooned 850% between early 2012 and late 2013. But with the release of preliminary results for 2013 earlier this month, the company saw its shares tumble by as much as 28% in one day!

The reason for the plunge was an expectation of earnings and revenue coming in below forecasts, as well as guidance that is well below what Wall Street is hoping for in 2014. When a stock trades for 170 times earnings, that's what happens when there's even a whiff of bad news.

While these new expectations have been accounted for in the stock's current price, investors should pay careful attention to why earnings are expected to be slower than originally thought. If it's because the company is reinvesting in itself, that could be a great long-term move. If, however, it's because it has had to lower the price point on many of its printers -- management claims this isn't the case -- the stock may continue to fall.

Screen Shot

Source: Universal Display, courtesy of LG Chem. 

Universal Display, on the other hand, is busy licensing the rights to make lights that brighten every thing from our smartphones to the rooms of our houses while using up far less energy than conventional solutions.

Like 3D Systems, long-term shareholders have been handsomely rewarded: The company's stock is up 460% since bottoming out during the Great Recession. But that ride has been a bumpy one as well. That's largely because Universal Display is a relatively small company, and it has lumpy revenue that can vary greatly from quarter to quarter.

Short sellers aren't big on the company because it essentially relies on patents to generate revenue. As time goes on, patents expire, and new technologies are born. There's no guarantee that Universal Display will always be ahead of the curve.

At the same time, the company is clearly a market leader, and there's no reason to assume that will change. Though results are important, pay close attention to the company's guidance for the upcoming year to get a feel for how the stock might react. And remember, keep your eyes on the long-term time horizon.

There'll be more than one winner in 3-D printing
For the first time since the early days of this country, we're in a position to dominate the global manufacturing landscape thanks to a single, revolutionary technology: 3-D printing. Although this sounds like something out of a science fiction novel, the success of 3-D printing is already a foregone conclusion to many manufacturers around the world. 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.

Brian Stoffel owns shares of 3D Systems. The Motley Fool recommends and owns shares of 3D Systems and Universal Display. Try any of our Foolish newsletter services free for 30 days. We Fools don't 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.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't 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.

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