Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: In the absence of any notable news, shares of 3D Systems Corporation (NYSE:DDD) dropped by as much as 10% during Tuesday's intraday trading before closing down around 6%.
So what: Volatility is nothing new to investors in the additive manufacturing space, but it's worth noting 3D Systems' plunge today comes on the heels of a temporary pop Monday after analysts at Bank of America increased their price target on the company to $90 per share. For those of you keeping track, that's still a nearly 20% premium to today's closing price at $75.51 per share.
What's more, 3D Systems wasn't the only 3-D printing industry stock to fall today. Stratasys also dropped almost 9%, ExOne slid 8%, and voxeljet plunged by a whopping 15%.
Now what: It's hard to blame shareholders for wanting to take some money off the table. After all, even after today's drop, 3D Systems stock has risen by a third over the past month alone. So far in 2013, it's up 112%, so a healthy pullback certainly may have been in order.
With the stock trading at 59 times next year's estimated earnings, would I back up the truck at today's levels? Probably not. But as a long-term shareholder myself, I'm definitely not interested in selling, either. As it stands, investors shouldn't be particularly bothered by short-term fluctuations like these, which inherently aren't indicative of problems with 3D Systems' broader business.