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.
In advance of the Christmas holiday, the stock market continued its gentle upward path to new record highs on Tuesday. Gains in the overall market came from good news on the economic front, with rising home prices and strengthening orders for durable goods putting investors in a good mood. But 3D Systems (NYSE:DDD), Stratasys (NASDAQ:SSYS), and CalAmp (NASDAQ:CAMP) bucked the upward trend, posting losses that put them among the worst performers of the day on Tuesday.
For 3D Systems, not even positive news was enough to keep it from falling more than 5%. Analysts at Canaccord Securities raised their price target on the stock to $95, citing new consumer products that could help the 3-D printing company expand its distribution channels and gain exposure. Yet with two company insiders having sold shares of 3D Systems stock recently, including CEO Abraham Reichental's $2 million sale couple weeks ago, investors who just learned about the insider sales in a Barron's report yesterday might be concerned about the appearance that the stock's upside could be limited.
Elsewhere in 3-D printing, Stratasys dropped 4%. The move reversed gains from yesterday, when the 3-D printing company got an upgrade from analysts at Gabelli. Those analysts argued that printing-material innovations like nylon could open up new opportunities for the company, with potential to differentiate Stratasys from 3D Systems and other rivals.
Despite the corrective moves for both 3D Systems and Stratasys, the real test for both stocks will come at the Consumer Electronics Show early next month in Las Vegas. There, the two companies will go head-to-head with each other and competing 3-D printer makers, each trying to establish dominance over the rest of the pack.
CalAmp dropped 7% after its earnings guidance for the current quarter last night failed to meet investors' expectations. The maker of wireless communications equipment produced better revenue and net income for its fiscal third quarter than analysts were looking for, but its prediction for sequential downturns in earnings and sales didn't sit well with investors who had bid up the stock to a relatively high valuation. Still, the stock has tripled since the beginning of 2013, reflecting the better prospects for increased telecom and networking spending throughout the tech sector.