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2 Reasons to Avoid Voxeljet AG (ADR)

By Steve Heller - Dec 26, 2013 at 11:03AM

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Valuation aside, this red flag will make you wonder if Voxeljet deserves a place in your portfolio.

Hands down, voxeljet (VJET 1.78%) is the most expensive 3-D printing stock around. At current levels, this industrial 3-D printing company is trading at around 25 times 2014 expected sales -- well above its peers. However, price isn't the only issue with voxeljet.

Recently, the company burned through about $13.7 million, or 20% of its IPO proceeds, to purchase its German headquarters and expand the service center on site. In the year prior, the company spent roughly $400,000 renting the same property. This could be a huge warning sign that management doesn't know how to efficiently deploy capital, which could lead to non-accretive equity raises down the road. As an investor, a management team that doesn't know how to effectively deploy capital is probably best to be avoided.

In the following video, 3-D printing analyst Steve Heller makes a case for why voxeljet shouldn't be part of your portfolio.

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