3D Systems Q2 will be announced on Thursday, July 31st in pre-market hours.

Conference call will be at  9:00 a.m. Eastern Time with live webcast @ www.3dsystems.com/investor

3D Systems Q2

There’s no better time for short term trading momentum stocks than around earnings. While most of my articles are geared for long term investors, this article reviews how I plan to play the 3D Systems Q2 earnings in a way that I believe increases the likelihood to get back into my full position at a discount.

 

Quick review of my timing in 3D Systems this year

I saw signs of what I believed to be a bottom forming in 3D printing stocks and wrote about it on May 5: 3D Printing Stocks: “Sell in May and go Away” or “Correction is Done and Recovery Begun”?  and concluded “I’m optimistic that the bottom in this group may be close.”

Over the next few days I began buying back shares of 3D Systems (close to YTD lows) for reasons explained in 3D Systems (DDD) Entering Mass Production Levels With Project Ara, and added slightly on 7/25.

Shares of 3D Systems rallied as much as 41% since my May 6th -9 purchases hitting an intraday high of $69.56 on July 1.

3D systems Q2 earnings 2014

With that history in place, this is how I’ll be playing 3D Systems Q2 earnings 

First of all, I’m not expecting blowout earnings. Although management increased 2014 revenue guidance last month to $695 million-$735 million (from previous guidance of $680 million-$720 million), they kept their earnings guidance unchanged at $0.73 to $0.85/share for the year. 

The average estimate by analysts for this quarter is .18/share on revenue of $162.3 M

3D Systems Q2 2014 estimates

I’m going to guesstimate and say I believe EPS will come in at .16-.17/share, (below estimate of .18/share), with revenue topping the average estimate to exceed $163 million for the quarter.

3D Systems is still digesting the many acquisitions made over the last 12-18 months that I expect will keep earnings growth tepid for Q2 while revenue accelerates. It’s an aggressive business model….buying up nearly everything you can in the space to take advantage of the industry’s 34.9% CAGR (Wholers), but it comes at the expense of bottom line earnings in the short term.  It also creates risk of course… successfully integrating so many businesses under one umbrella is no easy task and you either believe they’ll pull it off, or they won’t.  I believe they will- the company has a history of successfully integrating dozens of acquisitions in the past.

So, I’m not expecting a blowout in earnings this quarter, which is fine. I want to be fully in 3D Systems shares again before they report Q3 and Q4, when management expects both revenue and EPS to ramp up.  In the Q1 conference call, Damon Gregoire, (CFO), explained:

Please note that we expect a greater portion of our revenue and earnings to be generated during the second half of 2014 as the full impact of our new products and services materializes.”

and looking out further…

“…we fully expect the higher investments that we are currently making to favorably influence our results and competitive advantage of the coming periods. We expect operating leverage to resume in the second half of 2015 and to be fully restored in 2016.”

With this in mind, I’m not expecting very strong numbers on July 31 and the stock could take a hit as a result. In fact, short sellers in the stock seem to be banking on this. Short interest in 3D Systems is high with about 1/3 of the float sold short as of July 15.

I believe the short position in DDD has increased since then based on the trading as compared to SSYS, XONE, and VJET, seen in the 5 day chart below.

3D Systems Q2 chart

Unless earnings come in surprisingly strong, I think shorts will continue to hit the stock over the short term.

That said, short sellers also know what’s expected in Q3 and beyond based…greater acceleration of top and bottom line growth. So I also expect many will be buying to cover their positions as the second half of the year progresses.

“All In” by Q3

As of now I’ve repurchased about 1/3 of the position I’d like to have in 3D Systems and I plan to buy the remainder between Thursday’s earnings report and Q3 earnings. Unless the company comes out with an earnings blowout (unlikely) and/or increases guidance again for the remainder of the year, I don’t plan to rush in.

Now, if the stock craters as it did following the Q1 report, (intraday decline of 27% from the prior close), and there’s no negative guidance revision, I’ll be a buyer Thursday and Friday.  However, I highly doubt that kind of drop will happen this time around and expect trading in a much tighter range with plenty of time to continue averaging into my position over the next few weeks. All this assumes of course EPS and revenue aren’t notably higher than expected. If they are, then I’ll be adding sooner and I’m betting shorts will be covering pretty quickly to protect gains as well.

So this is a bit of a guessing game that will become more clear on Thursday.

What I do know is that:

  • 3D Systems’ work on Project Ara with Google looks like a game-changer for the industry (See: 3D Systems Entering Mass Productions Levels with Project Ara).
  • Key acquisitions of Robtec (a major Latin American service bureau) and Medical Modeling should ramp top and bottom line growth by next year
  • Increased revenue and organic growth is expected in the second half of this year from a wide range of new consumer products, including iSense scanners, Cube 3, CubePro, ChefJet, CeraJet and CubeJet printers
  • Capacity is being added to accelerate Direct Metal 3D printer sales, the demand for which ran ahead of the company’s manufacturing capabilities
  • New software and materials are being launched through the remainder of this year

Due to the above, after Thursday’s numbers are out,  I’ll be buying more shares of DDD to regain a full position over the days and weeks that follow.

 

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Disclosure: I am long shares of 3D Systems. I have not been paid by any company or any third-party for this content.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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ZecotekIn a press release today, Zecotek Photonics, (ZMSPF) on the U.S. OTC and (ZMS) on the TSX Venture Exchange announced they are developing high-performance materials for additive manufacturing in collaboration with  the Institute of Chemical Physics of the National Academy of Sciences in Yerevan, Armenia.

3D printer stocks

Dr. Levon A. Tavadyan , Director of the Institute of Chemical Physics stated that:

“The collaboration between Zecotek Display Systems, LT-Pyrkal, and the Institute of Chemical Physics will focus on 3D printing systems and high-performance materials applicable in additive manufacturing technologies. We are excited by the opportunity to produce these types of materials for fast 3D printing, and establish with Zecotek, the partnership as a leading supplier of powder metals, alloys and hydride compounds for 3D rapid manufacturing.  The new materials will be used in the laser sintering based 3D printing developed by Zecotek and LT-Pyrkal for prototyping and mass production.”

fast 3D printer by Zecotek

High Speed 3D Printer in Development

On Monday Zecotek also announced their ongoing development of a “high-speed 3D printer which will use high-performance metal alloys and offer technical and commercial advantages over other 3D printing technology” 

Zecotek Photonics

For an in-depth article on Zecotek and their entry into the 3D printing space see:

Zecotek Photonics [OTC:ZMSPF] Enters 3D Printing with Patented, Disruptive Technology

 

Beyond 3D printing, Zecotek also won a critical Markman hearing in a patent lawsuit filed by Zecotek against Philips Healthcare and Saint-Gobain (a $43 billion revenue French materials company) that could pave the way for significant damage awards.

Read more on in their patent dispute and implications for Zecotek here.

 

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Disclosure: I am long shares of Zecotek Photonics. I have not been paid by Zecotek Photonics or any third-party for this content.

Disclaimer: Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 _________________________________

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3D Printers

Everyone agrees there’s big-time growth ahead for consumer 3D printers, but will they be everywhere, in virtually every home? 

One of the ongoing conversations in the 3D printing space is whether consumer grade 3D printers will eventually be seen in the vast majority of households. There are well-reasoned arguments for both sides of the debate and up until now I stood in the middle, taking it in, not sold by either side.

Well, I’m going to weigh in on this argument today to say unequivocally that I believe 3D printers will become ubiquitous in our homes.

Thanks Dad!

My dad, who I much admire and deeply respect, is the least consumer-oriented person I know. Raised during the Great Depression, my father is an extremely practical and frugal man who will drive a few extra miles to a gas station where he can save a penny or two/gallon and cuts paper towels in half to get more for his money.  He only chews half-sticks of gum. He’s not one to embrace new technology and to this day doesn’t have a cell phone. However, it was an urgent need of his recently that pushed me into the “3D printers will be everywhere” camp.  This was the day his HP “DeskJet” printer from circa 1995 finally died, and getting a replacement was an immediate priority.

“I have to get a new printer…can’t be without one” he explained, shaking his head.

Even though he only used it a few times/year, he asserted that there was no substitute for having one in his home.

Dad of course was right, and I believe 3D printers will eventually become appliances we “can’t be without” in our homes as well for reasons discussed below.

3D printers

“Nation of Makers” Not Required

While industrial applications for additive manufacturing have been around over 20 years, 3D printing by consumers has (until very recently) been limited to tinkerers, makers, and open source garage enthusiasts. Some argue this won’t change as dramatically as many predict because America (and Western societies in general) are too consumer-oriented to embrace 3D printing at home…that we will continue to shop at (pick a big box store) to buy everything.  However, I believe being a consumption society has virtually no bearing on our adoption of consumer grade 3D printers. What will drive adoption is the occasional, simple convenience of having a 3D printer in your home. When the right technology is in place, 3D printers will provide a convenience so great that notion of getting one moves from “want” to “need” in our lives.

space

“Killer App” Not Required

Some have reasoned that consumer grade 3D printers require a “killer app” to move them from hobbyists into the mainstream. While there may be a killer application for 3d printers at the consumer level launched in the future, I believe it’s not a requirement for full mainstream adoption. The “killer app” is the technology itself, that once improved, makes 3D printing at home affordable, simple, and more convenient than driving to a store or buying online and waiting a week for delivery. That’s the killer application of 3D printing at home, and anything else is gravy.

drivers

Technology and Price

Improvements in speed, capabilities, and price of even average consumer grade 3D printers today make them nearly unrecognizable from what was available just 3 years ago, and that trend will continue. I agree with 3D printing patent attorney, John Hornick, who is a frequent speaker on the industry, its patent issues, and what he calls “Company X”.  John believes Company X (an OEM out there now or unknown player coming out of the blue) will develop a 3D printer for consumers that among other things:

  • is robust
  • is affordable
  • prints in multiple materials and multiple finishes
  • has a large build space
  • prints much, much, much faster than anything out there now
  • prints in all colors
  • is out of the box, push-button ready
  • etc.

You get the idea. What’s required for 3D printers to become something we really “need” isn’t available today, but it’s what’s coming.

Furthermore, the majority of 3D printing doesn’t need to occur in the home for every home to still have one. When the right pieces are in place, 3D printers will become common household appliances even though we won’t suddenly become a nation of makers.

Society values convenience above almost anything else, and the unprecedented convenience of being able to occasionally print something (dishes, jewelry, a spiffy new collar for fido, etc) when the technology and price are right, will be too much for the average person to pass up. People like my father will buy them not because they’ll be suddenly transformed into home-based manufacturers, but because 3D printers will be so convenient to have around that they’ll become a home appliance we “can’t be without.”

driver

3D Printers in Education

The advancement of 3D printers in schools is already taking place, and it’s a global trend.  If you Google search “3D printing in education” you’ll come up with 58 million results today while just 5 years ago there was nothing.  It’s known that 3D printers are  excellent teaching tools in K-12 education, particularly in STEAM (science, technology, engineering, arts, mathematics) content. Ed-tech spending is expected to more than double in size to $13.4 billion by 2017 according to venture capital firm GSV Advisors. The growth in Ed-tech spending isn’t because schools are coming into giant piles of money these days, it’s because they’re not. While school systems are typically receiving less government funding recently, educators are increasingly utilizing technology (including 3D printing) as a means to more efficiently and effectively address core goals and needs. 

In earlier days, those around my (perfect) age of 50 will probably recall the first computer they saw was at school, not on a store shelf. That experience not only started my/our preparation for the computerized world we’re now living in, it forged early brand identity with Apple Computer for most of us.  So (beyond fostering increased adoption), any 3D printer OEM that’s providing comprehensive content directly addressing the needs of school districts in STEAM education is “one to watch”. You can read more about a company doing just that in this Engineering.com article.

space

Conclusion

Most are in agreement that consumer 3D printers have strong growth ahead. Some believe the growth will be moderate, others believe it’s going to be exponential.  I’m in the camp that when the technology is there, (within the next 5-10 years), the growth will be exponential and 3D printers will be in virtually every home. The convenience they’ll provide will be so great they’ll be indispensable, and it was the least consumer-oriented, most practical man I know who moved me into that camp, my father.

 

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Disclosure: None

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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One of the best performing stocks in the market in recent days has been Hurco Companies (HURC) which I wrote about on July 16.

HURC shares rallied some 30% in the few days since that morning’s alert, and I have taken half of my position off the table here. While I believe there’s room for added gains in HURC, I also believe it’s wise to lock in some profits following a big short term move like this.

 

Tinkerine StudiosI’ve also been adding to my position in Tinkerine Studios (TKSTF). I previously wrote about the company in an article which I was compensated for, but any future articles are uncompensated.

Tinkerine has a current market cap under $14 million USD…which is by far the lowest of any stock in the 3D printing space with current revenue flow.

I’ll continue to write about Tinkerine Studios because I believe the company is grossly undervalued for reasons I’ve written about on Engineering.com today.

The bottom line is Tinkerine is the only manufacturer of 3D printers that’s offering course content for students and educators that addresses STEAM (science, technology, engineering, art, math) initiatives in Canada and the U.S., and they’ve booked initial sales in several school districts in both countries.

I’m heading to Vancouver next week to conduct a video interview with management re: their initiatives in public education and provide footage of their operations, which I look forward to sharing with subscribers.

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Disclosure: Long shares of HURC and TKSTF. I have not been compensated by any company or any third party for this update.

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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Hurco Companies logoIn news yesterday, Hurco Companies (HURC) based in Indianapolis, Indiana announced they filed a U.S. patent for what may be disruptive technology which combines 3D printing and CNC machining. The technology permits Hurco to achieve 3D printing directly on the CNC machine without the need for a separate 3D printer. Hurco is also working on expanding its invention to include other additive manufacturing processes.

 

 

Hurce Companies headquartersAbout Hurco Companies Inc.

  • Founded in 1968, based in Indianapolis
  • Designs and produces interactive computer controls, software, and computerized machine systems for the worldwide metal cutting and metal forming industry
  • Products sold in the United States, Europe, and Asia
  • 625 employees

Web site: Hurco.com

 

Fundamentals and Share Data

Current P/E Ratio (ttm) 19.7211
Estimated P/E(10/2014) 16.8678
Relative P/E vs. SPX 1.1093
Earnings Per Share (USD) (ttm) 1.4883
Est. EPS (USD) (10/2014) 1.7400
Est. PEG Ratio 2.4097
Market Cap (M USD) 190.92
Shares Outstanding (M) 6.50
30 Day Average Volume 27,894
Price/Book (mrq) 1.2335
Price/Sale (ttm) 0.9465
Dividend Indicated Gross Yield 0.95%
Cash Dividend (USD) 0.0700
Source: Bloomberg

Based on the fundamentals above, the company’s cash position of $7.18/share and book value of $24/share, I believe Hurco Companies shares  are undervalued given the potential for licensing of their technology which the company states effectively turns a CNC milling machine into a 3D printer when combined with the company’s proprietary software.

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Disclosure:  Long Hurco Companies (HURC)

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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At the Inside 3D Printing Conference and Expo in Melbourne, (Australia’s first major 3D printing conference held July 9-10), major industry players 3D Systems (DDD), Stratasys, (SSYS), Materialise, (MTLS), along with smaller companies with promising products were well represented.

 

New Player, 3D Group, Going Public

3D Group- AUSThere was a standout at the conference however, and it was “3D Group” (web site).

It’s a company that I think generated the most excitement and buzz due to their product line, plus the fact that the company is Australian designed, Australian built, and Australian owned.

3D Group

The printer being launched by 3D Group is the largest fused filament fabrication (FFF) 3D printer on the market, with a max print volume of 2m3.

3D Group’s printer also prints in multiple materials (clay,plastics, porcelain, and more), it comes standard with 4 extruders and can be upgraded to as many as 8 extruders.

3D Group plans to spearhead an education push for 3D printers in Australia’s schools, and also signed an agreement with with Kibaran Resources on July 10 to form a joint venture research and development company to investigate the application of graphite and graphene in 3D printing.

 

 

Specifications of the FFF printer from 3D Group are as follows:

Height: 1970mm (6.5 feet)

Width: 1880mm (6.2 feet)

Depth: 2180mm (7.2 feet)

Max print volume: 2m3

Max print speed: 150mm/sec

Accuracy: 0.025 mm in the x and y axis and 0.003 mm in the z axis

Layer height: 0.15mm to 1mm

And if that isn’t enough to get you attention, this beast of a 3D printer is priced very competitively at about $90,000 AUD.

trading soon on Australian stock exchange

3D Group will be trading publicly in a few weeks on the Australian Stock Exchange (ticker pending).

 

I had the pleasure of meeting several engineers and management from the company and spent some talking with 3D Group’s Director, Frank Pertile, in the video below:

 

3D Group is “One to Watch” when trading begins, and I’ll update subscribers with trading launch date and ticker on the ASX as more information becomes available.

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Gary Anderson…..Follow me on Twitter: @3DPrintingStock

Disclosure: None

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

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The Inside 3D printing Conference and Expo in beautiful Melbourne, Australia is now underway.

Inside 3D Printing Conference and Expo - Melbourne

 

 

 

 

 

 

Melbourne 3D printing conference and expo

Inside 3D Printing Conference comes to Australia

This is the first major 3D printing conference in Australia, and at the opening keynote address delivered by Terry Wohlers of Wohlers Associates, it was standing room only.

Milan Brandt, Professor of Advanced Manufacturing at RMIT University will give tomorrow’s keynote address at 9 am, and I’m looking forward to his presentation, “Additive Manufacture: The Next Industrial Revolution” as well.

 Inside 3D Printing Conference Melbourne

Right now (10:00 am Melbourne time) the exhibit hall is open and bursting with attendees, so I’m glad I got a few pics early this morning before the crowds arrived.

 

Inside 3D Printing Conference, Melbourne, early morning July 9

 

I’ve already met some of my Aussie subscribers, and am looking forward to making new friends here in the world’s most livable city, Melbourne.

 

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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Tinkerine Studios Ltd. (TTD.V) on the TSX Venture Exchange and (TKSTF) on the U.S. OTC is the only pure play 3D printer manufacturer in Canada. While Tinkerine began trading publicly only recently, the company has an established sales history in manufacturing award-winning 3D printers and has made strong, first-mover inroads into Canadian and North American schools. Tinkerine is one of the few companies focused on providing the entire 3DP support ecosystem: easy to use hardware and software, 3DP education online course curriculum and materials.

I believe Tinkerine Studios possess four clear-cut competitive advantages that will drive success and position Tinkerine in two of today’s fastest growing technology markets: prosumer grade 3D printing and Education Technology (ED Tech).  Combined these two markets of the economy represent a $90B market opportunity, expected to grow to $257B by 2017 according to (http://www.enz.govt.nz/news/growth-in-edtech-great-for-nz-exports).

These competitive advantages are:

  1. Strength of existing products + new product launch
  2. Strength of management
  3. First mover advantage for multiple product sales to Canadian and North American schools
  4. Cash position from public launch

In this article, I’ll provide a brief overview of Tinkerine, discuss consumer and prosumer 3D printer market segment growth, and explore the strong competitive advantages this newly trading company has.  I believe these competitive advantages will ultimately reward investors with higher share prices as the company grows revenues and eventually, net income


Tinkerine Studios Overview

Tinkerine Studios logo
Founded in 2012, Tinkerine Studios develops, manufactures, distributes, and sells 3D printers, software and materials for the consumer, prosumer, and education markets.

 

Headquarters: Vancouver, B.C.

Shares Issued/Outstanding: 41.6 Million

Market capitalization: $17.8 million USD 

June 2014 Investor Presentation

 

 

Consumer 3D Printing Market Growth

Tinkerine Studios is directly targeting the rapid growth in the consumer grade printer market.

Gartner research director Pete Basiliere projects consumer market printer shipments will “rise 123.3% from 2015 to 2016 and by 149.3% from 2016 to 2017″ as 3D printing continues to move toward mainstream adoption.

 

 

Consumer 3D Printing Market Growth

Tinkerine Studios is directly targeting the rapid growth in the consumer grade printer market.

Gartner research director Pete Basiliere projects consumer market printer shipments will “rise 123.3% from 2015 to 2016 and by 149.3% from 2016 to 2017″ as 3D printing continues to move toward mainstream adoption.

Tinkerine Studios Consumer 3D printer adoption chart

Tinkerine studios

Echoing Gartner’s extremely fast growth projections for consumer grade printer sales is the Wohler’s Report 2014 release which notes that much of the growth in 3D printing over the next few years will be driven by “sales of under $5,000 personal 3D printers.”

Also, in an April 2014 press release Juniper Research writes that sales of consumer 3D printers will exceed 1 million units by 2018, rising from just over an estimated 44,000 this year.

As a pure player in the consumer 3D printing segment, this growth presents an enormous market opportunity to Tinkerine Studios.  More importantly, I believe Tinkerine Studios has the capacity and contacts within its management and team of advisors to significantly expand its educational offering well beyond Canada and the US, positioning it to become a dominant international player.

 

 

Product Strength

Tinkerine Studios has an established sales history with their “Litto”, “Ditto”, and “Ditto+” 3D printers and received industry praise from the magazine Make who awarded the Ditto+” in their “Surprise Hit” and “Best Value” categories.

 

Not resting on their laurels, Tinkerine is now launching their newest 3D printer, the “DittoPro” for the prosumer market. This new machine has superior resolution, a slightly larger build volume and a lower price than the MakerBot Replicator and should be a strong competitor in the space.

DittoPro MakerBot Replicator 
Build Volume 469 cubic inches 456 cubic inches
Layer Resolution 50-300 microns 100-300 microns
Price $ 1,899 $2,899

Due to the Tinkerine-developed open C-frame design, larger components can be printed with DittoPro while at the same time the machine’s desktop footprint is 43% smaller. DittoPro also features a quick-swap extruder nozzle, a removable glass build platform designed for good adhesion, an intuitive user interface with instant printer status feedback, sound dampeners for ultra-quiet operation, and a quick release system for easy access and removal of printed objects.

Another comparative advantage of the DittoPro is the machine’s aesthetics. It’s just a great looking 3D printer as you can see in this launch video:

 

As investors are aware, new product launches are a key driver for increased revenue and earnings for young companies. Based on the serious competitive advantages built into the machine, I believe the DittoPro will have a big impact on forward revenue and earnings growth at Tinkerine. Currently, Tinkerine derives its revenue from sales of its hardware, 3D Printers, filament, and print services, a market it sees tremendous potential in. The company also expects to see revenue from Tinkerine U, its education initiative, comprised of online course content – instructional and training videos, and a repository, which will consist of downloadable 3 dimensional files or designs. 2014 is the beginning of the company’s three-year plan, to push deep into the education vertical. Tinkerine will aggressively enter the North American market by putting printers, and online course curriculum into North American schools. Tinkerine says its education offering will target more than 8M teachers, 120,000 K-12 schools (60M students), and 4700+ post secondary institutions (21M students).

3D printer stocks

Recent Developments  

The company recently announced that it is now selling its own line of high purity biodegradable filament, which it believes will be a growing source of revenue going forward.

3D printing stocks

Management Strength

Having a great new product in a high-growth sector doesn’t guarantee success for the company, or for investors. Success also requires having a management team with industry experience to successfully implement the company’s business plan.

Big Four accounting firm Ernst & Young conducted a survey of institutional investors covering the most important non-financial factors for IPO success. Although Tinkerine Studios became public via reverse takeover, the survey results are relevant and applicable, in that a major key to success is management’s credibility and experience in the eyes of institutional and individual investors.

Tinkerine Studios institutional investors survey

 

Management strength is another area where Tinkerine Studios excels. Their executive team has management-level experience at MakerBot, Shapeways, and Hewlett Packard, and the quality of their advisory board speaks volumes about where this company is headed.

In less than 3 years, Tinkerine CEO Eugene Suyu has taken his concept to create a user-friendly and affordable 3D printing experience for consumers to an established leader in the Canadian 3D printer market that’s publicly trading, winning industry awards, and launching a new key product. This is clear confirmation of Eugene Suyu’s effectiveness, efficiency, and capability in leading the company forward.

I had the pleasure of meeting Todd Blatt, mechanical engineer and VP of Market Direction for Tinkerine Studios at the Inside 3D Printing Conference and Expo in New York in March where he presented at the maker summit. Todd is a true pioneer in the consumer 3D printing market. He began 3D modeling in the mid 1990’s and was an integral part of the MakerBot marketing team.

Current member of Canadian Parliament, Russel Hiebert, with his experience in legislative, funding, and regulatory changes is on the Tinkerine Studios advisory board and is unquestionably, a huge asset. Russel Hiebert also serves on Canada’s International Trade Committee, and should be able to open up doors internationally with his strong political connections and global relationships.

 

First Mover Advantage in North American Schools

Tinkerine Studios is spearheading a big education push into  the North American school system, starting with Canadian Schools, reminiscent of what Apple did so successfully in their early days. This strategy can generate large-scale revenue flow into Tinkerine while at the same time developing brand awareness and loyalty in students who are at the age when brand loyalty begins.

Tinkerine’s 3D printers are already present in several school districts in both Canada and the US, and the education move is just getting started.

I spoke with Tinkerine CEO, Eugene Suyu recently about their education push…that one of the keys to Tinkerine’s success in the North American school market appears to be their development of software designed specifically for the education sector.  I asked if the proprietary software of “Tinkerine U” includes modules covering technical aspects of the printers themselves, modules geared for teachers on the practical uses of 3D printing for teaching math and science classes, and of course student/user modules.

Eugene Suyu explained:

“Yes, that’s right. We know there are a lot of 3D printers in North American schools already collecting dust for lack of a teacher-friendly curriculum to bring them alive in the classroom. To fix this problem, we partnered with the former head of one of Canada’s largest online schools, Kevin Brandt, and a leading ED Tech content provider Ready Labs, co-founded by a major Canadian University, Simon Fraser University, to develop ‘Tinkerine U’, which is the first-ever Massive Online Open Course (MOOC-style) coursework designed to teach teachers how to use 3D printing effectively in STEAM courses and beyond. Tinkerine U focuses on the full STEM/STEAM (Science, Technology, Engineering, Arts, & Mathematics) curriculum with teacher training guides, online courses and lesson plans, workshops, support for library maker spaces, and access to Tinkerine’s award-winning 3D printers. Your readers can visit us at www.TinkerineU.com and register to get involved in this exciting movement in global education.”

3d printer stocks

Planning Global Education Push

Eugene Suyu explained the company is looking far beyond North American educational systems.

“We have experience and intimate knowledge of selling 3D printers into the US market and a number of US school districts. Each school district has the equivalent of IT directors that are tasked with selecting which printers the district or schools should be buying. We know that performance, service (reliability), curriculum support, and affordability is what they are looking for, and that a teacher or  librarian doesn’t want to have to wait 6 weeks for the maintenance of a machine. We believe Tinkerine U and the launch of DittoPro gives us a significant advantage, and in order to execute successfully in the areas of sales,  distribution, and customer service, we will need to continually add experienced individuals to support our efforts. Yesterday, we announced the addition of RJ Wafer to our advisory board, the former Director of Distribution for MakerBot Industries, and Ben Yan, who was a senior Channel Manager with Hewlett Packard. We believe this significantly strengthens our distribution and sales efforts in North America and internationally, as both gentlemen bring a great deal of experience in the areas of corporate sales, distribution, channel management, and business development. RJ oversaw and handled the build-out of the team, strategy, and channels that created huge growth for MakerBot, while Ben has 35 years of extensive management with Fortune 50 companies including Hewlett-Packard, Sun Microsystems, Abbott Laboratory, and GT Group Telecom.

We know this is a massive market for us, and one that we will be aggressively pursuing, along with distribution deals in other strategic markets including Korea, Japan, and Taiwan.” 

Tinkerine studios cash position

Cash Position

Tinkerine’s advantages of having successful products in a high-growth sector, a strong management team, and first mover advantage in education are maximized by a healthy balance sheet and cash position. As a result of the successful capital raise during the process of going public, Tinkerine Studios now has a cash position approximately $2.4 million Canadian dollars.

I also spoke with CFO Martin Burian who told me the company has sufficient cash to execute their business plan over the next 18 months. Additionally, he explained:

“These figures assume no increase in sales (which we will definitely achieve in the coming months as we announced the launch of our DittoPro in May and deliveries will start later in June). So as we enjoy the fruits of our base line business expansion we will have positive contribution from incremental sales. That means our cash will last longer or we will accelerate our business roll out and incorporate new initiatives.”

Tinkerine’s public launch provides the means for the company to immediately tap into the rapidly accelerating growth in the consumer and prosumer 3D printing sector on a substantial scale.

Tinkerine conclusion

Conclusion

Tinkerine Studios represents what I believe to be one of the best investments in 3D printing at this time. Through its education initiative, Tinkerine is a serious player in one of the strongest investment themes today, Education Technology (ED Tech). This high-growth market is heating up with M&A activity, and total market size for smart classrooms and ED Tech is estimated to grow from $31.31 billion in 2013 to $59.90 billion by the 2018 according to a new report from MarketsandMarkets.

Goldman Sachs is also bullish on Education Technology. In a recent Bloomberg interview, Goldman Sachs Co-chairman George Lee sees “smart capital” going into ED Tech companies, and believes market opportunity is in  ED Tech could be larger than the markets Google and Facebook operate in (see video).

The extraordinary growth opportunity in the education sector that Tinkerine Studios is aggressively pursuing is palpable. With first mover advantage, the launch of the DittoPro and a unique software curriculum for schools, I believe the company has what it takes to become a leading hardware, software, and PLA filament consumables provider for Canada’s public schools.

In addition, Tinkerine Studios is now working on laser based additive manufacturing which it believes will be the next phase of 3D Printing.

With a mere $18 million USD market cap, I believe the potential risk in shares of Tinkerine Studios is minimized while the potential for substantial share price gains over the next 6-12 months is very high.

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Disclosure:  I am long shares of Tinkerine Studios (TTD:V) that I purchased in the open market.

Payment for this article of $30,000 CAD and 150,000 .25/share options from Tinkerine Studios

Disclaimer:  See sidebar

Gary Anderson…..Follow me on Twitter: @3DPrintingStock

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3D Printing and Technology FundThe “3D Printing and Technology Fund” was the best performing technology fund for the last month as ranked by Morningstar.

As subscribers to 3DPrintingStocks.com know, Morningstar is a respected, reliable source of independent investment analysis that is widely followed by all levels of fund and stock investors.

What many investors may not yet know is that the new 3D Printing and Technology Fund (TDPNX) for individual investor class and (TDPIX) for institutional class, was the number one performing technology fund for the last 30 days according to Morningstar.

The link to the technology funds tracked by Morningstar is here, and if you sort by 1 month % return, you’ll get the following screen (click image to enlarge).

3D Printing and Technology Fund capture

 

I wrote about the 3D Printing and Technology Fund in an earlier article, and my conclusion from that article is unchanged:

For investors looking to “leave the driving” to fund managers that have an insider’s access to the industry and to diversify their 3D printing portfolio, TDPNX may be the ultimate fit.

You can learn more about the 3D Printing and Technology Fund and invest in the fund directly at 3DPFund.com.

 

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Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 

Disclosure: I am an investor in the 3D Printing and Technology Fund (TDPNX).  I was not paid by the fund or any third-party for this article.

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

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I’m really looking forward to meeting some of my subscribers from Australia and making new friends at theInside 3D Printing Conference and Expoin Melbourne next week!

 

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Materialise IPOThis morning the Materialise IPO (MTLS) was priced at $12.00/share and trading will begin today.

Per the  updated prospectus filed June 12, the company will have 47,072,056 ordinary shares at the start of trading. 

CEO Wilfried Vancraen, Chief Executive Officer of Materialise, will ring the opening bell for the NASDAQ this morning.

 

Investors should not expect a repeat of last year’s voxeljet IPO, which jumped over 120% in the first day of trading during a period when 3D printing stocks had gotten well ahead of their supporting fundamentals in their valuations.

And while I’m a 3D printing industry and 3D printing stock bull, this is a company I have decided to sit out on when trading begins.

Revenue growth from 2012-2013 was an unimpressive 18% and 2013 net income was a mere $4.7 million (or .10/share when fully diluted) for a trailing PE of 120.

Q1 2014  bottom line was break even.

 

2013 full year and Q1 2014 financials: click to enlarge

Materialise IPO financials

 

I could be wrong, and initial trading could be very positive for MTLS shares.

Given the fact that it is one of only three pure play 3D printing stocks that have positive EPS for the trailing twelve month period (the other two being 3D Systems (DDD), and Arcam AB (AMAVF), shares could rally to close above $20/share on day one…  but… I doubt it.

 

 

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Gary Anderson…..Follow me on Twitter: @3DPrintingStock

 

Disclosure: No position.

 

Disclaimer:  Opinions expressed are my own and should not be considered investment advice nor an invitation to buy or sell shares of any company mentioned on this site. See sidebar for full disclaimer.

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