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.
Fool contributor Steve Symington owns shares of 3D Systems. The Motley Fool recommends and owns shares of 3D Systems, Bank of America, ExOne, and Stratasys and has the following options: short January 2014 $20 puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not 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.