Breaking News4/22/14 @ 10:00 a.m.

 

Sigma Labs, Inc. Signs An Agreement With Materialise NV To Integrate Sigma Labs’ PrintRite3D® Quality Inspection Technology Into 3D Printing Software

 

 

SANTA FE, N.M., April 22, 2014 /PRNewswire/ – Sigma Labs, Inc. (SGLB), a developer of advanced, real-time, non-destructive quality inspection systems for 3D metal printing and other advanced manufacturing technologies, today announced it has signed a Technology Cooperation Agreement with Materialise NV of Leuven Belgium.  The agreement sets forth the parties’ intent to collaborate technically and commercially in the integration, production and marketing of PrintRite3D® software-related products for metal-based additive manufacturing.

Mark Cola, President and Chief Executive Officer of Sigma Labs, Inc. stated that, “We remain focused on the three problems that are in part slowing the growth of the additive manufacturing market for metal-based, performance-critical parts, namely:  quality, geometry, and productivity.  To address the quality issues we continue to be successful in implementing our PrintRite3D® product with major North American aerospace customers.  By further integrating our PrintRite3D® software technology with Materialise’s additive manufacturing software, we believe that we will reach the broader additive manufacturing market sooner and be able to assist a larger number of AM users with achieving their in-process inspection needs more quickly.  A software package for additive manufacturing which incorporates our PrintRite3D® in-process inspection technology enables users to more quickly achieve rapid qualification with greater process reliability without having to wait until the end of the manufacturing process.  This would save users money by eliminating expensive post-process inspection technologies.”

Karel Brans, Strategic Partnership Manager of Materialise, added that, “Materialise has a long and distinguished history of innovation in the field of software for additive manufacturing (AM). Materialise offers solutions for every step of the AM process. This set of solutions form a platform for 3D Printing, which enables the importation of data from different sources and applications and connection of this data to the wide range of technologies and 3D printers. With Streamics automation and control system, the platform also supports the workflow in an AM environment, automating several steps along the way and assuring quality and traceability. It is intended to be an open platform that can link to innovative tools and technologies that complement the Materialise portfolio. Linking the Sigma Labs PrintRite3D® product to our software platform enables our mutual users to benefit from this valuable technology from within their trusted Materialise environment. We are pleased to work with Sigma Labs to help bring this quality inspection software technology to market.”

Press release: http://finance.yahoo.com/news/sigma-labs-inc-signs-agreement-140000712.html

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As I wrote yesterday, The Future Looks Bright For 3D Printing R&D Company Sigma Labs Inc. (SGLB)

Disclosure:  I am long shares of Sigma Labs Inc. (SGLB). I have not been paid by Sigma Labs or any third-party for this article.

 

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

 

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Shares of 3D printing R&D company Sigma Labs Inc. (SGLB) have vastly outperformed the well-known 3D printer manufacturers over the last 3 months.

 

 

Sigma Labs

 

I believe the positive trend for shares in Sigma Labs will intensify over the next 3-6 months for reasons I’ll explain in this article.

 

Company Overview

Sigma LabsSigma Labs Inc. was founded in 2010 by high-level scientists from the world-renowned Los Alamos National Lab. The company develops advanced, real-time, non-destructive quality inspection systems for 3D metal printing and other advanced manufacturing technologies.

Headquartered in Santa Fe, New Mexico, Sigma Labs is a micro-cap development stage corporation with  approximately 560 million shares issued & outstanding with a current market capitalization of just $76 million.

 

 

Key Product Launch To Meet Critical Industry Need

 

The rapidly evolving technology utilized in additive manufacturing is now moving the industry towards true manufacturing capabilities in what many are calling “The Next Industrial Revolution.”

However, 3D printing of high value, complex metal components used in the aerospace, automotive, medical, and defense industries requires assurance that quality parts are being produced. This critical need is directly addressed by PrintRite3D®, Sigma Labs’ proprietary and patented hardware/software solution that quickly assesses the quality of a part during 3D printing by using real-time data as opposed to waiting for costly post-process inspection (see PDF presentation).

Part inspection and qualification is a key focus for America Makes, (the National Additive Manufacturing Innovation Institute), with Sigma Labs now playing an influential role.  In January, Sigma Labs was chosen by America Makes as part of a team established  “For the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components, which technology is currently lacking within the industry.”

The America Makes project will generate up to $750,000 in revenue for Sigma Labs, and CEO of Sigma Labs, Mark Cola, stated in a press release:

“We are quite pleased to have been chosen along with our partners by the premier AM and 3DP association to participate in accelerating commercialization of our quality assurance technology.”

 “To participate in accelerating commercialization of our quality assurance technology” is an interesting word choice that I’m sure readers of this article can infer the significance of on their own.

 

In their recent 10-K filing Sigma Labs provides an interesting discussion of their market opportunity for PrintRite3D®.

Sigma Labs appears positioned to provide the AM market a product offering for real-time quality assurance and control based on our core competency in real-time monitoring and control called PrintRite3D®. Our IPQA®-enabled PrintRite3D® technology appears ideally suited to meet the needs of AM at this critical juncture in its development. Our technology will allow AM to be used during manufacturing of safety-critical or performance-critical metal parts, such as used aerospace and defense. Currently, these applications are difficult because the part quality cannot be completely guaranteed, and using inspection after manufacturing is difficult, costly and does not find all defects of concern. Therefore, we believe that PrintRite3D® will be a vital enabler for AM to realize its full potential. Sigma has unique offerings in this field. Furthermore, as a greater number of these AM applications could be cloud-based, the PrintRite3D® technology is fully compatible with highly networked, cloud-based implementation – subject to the data and intellectual property restrictions which may be imposed by some companies for competitive reasons.

 We believe that Sigma Labs’ unique process know how and trade secrets of IPQA® for AM, and a U.S. patent award for monitoring and control for processes specifically including AM, along with its PrintRite3D® technology has uniquely positioned Sigma to be a leader in the market space for quality assurance technologies for AM. Our proven and sophisticated analysis software has been demonstrated and tested at many manufacturing sites around the world which has validated the PrintRite3D® INSPECT and SENSOR PAK modules. In addition, Sigma has strategic relationships with experienced aerospace companies in North America that are assisting in the validation of our PrintRite3D® suite of modules.

PrintRite3D® Sales Have Begun

Initial sales of PrintRite3D®systems have begun, with more expected “over the near term” according to CEO Mark Cola, stating:

“This important delivery is the result of our determined commercialization efforts as we transition to production during 2014. We expect additional PrintRite3D® business from this customer as well as with a variety of major aerospace companies over the near term.”

While the customer hasn’t been named, I suspect these first two systems were delivered to GE Aviation. Greg Morris, GE Aviation’s business development leader for additive manufacturing stated in an earlier press release that:

“Today, post-build inspection procedures account for as much as 25 percent of the time required to produce an additively manufactured engine component,” said Greg Morris, GE Aviation’s business development leader for additive manufacturing. “By conducting those inspection procedures while the component is being built, GE Aviation and Sigma Labs will expedite production rates for GE’s additive manufactured engine components like the LEAP fuel nozzle.”

 

 

Cash Now In Hand For Full-Scale Commercialization

 

 In their 2013 10-K filing, Sigma Labs’ balance sheet shows strong improvement with $1.3 million in current assets and only $141,000 in current liabilities for a current ratio of 9.4. This is the strongest current ration in any 3D printing stock and Sigma Labs has no long term debt.

(click to enlarge)

Sigma Labs

 

 

 

 

 

 

 

 

 

 

More significantly, Sigma Labs recently completed a private placement bringing in an additional $3.3 million in cash to the company,  paving the road for full scale commercialization of PrintRite3D® to begin. CEO Mark Cola commented that the placement:

“Has now set the stage for Sigma Labs to enter a period of accelerated growth. This funding enables us to add key scientific and engineering personnel, and provides the ability to service our customers on a large scale and execute our overall plans for increased expansion in 2014 and beyond.”

 

 

Sitting At Key Support Level

 

Shares of Sigma Labs have had a strong propensity to bounce off the 200 day moving average, as the chart below confirms.

sigma labs

 

With additional sales of PrintRite3D® pending “over the near term”, a strong balance sheet, and full scale commercialization on tap, I believe this key support level may prove to be an excellent point of entry for new investors, as well as an opportunity to add to positions as I have recently.

 

 

Conclusion

 

It’s been a turbulent ride so far this year in 3D printing stocks, but shares of Sigma Labs have been outperforming the much larger, well-known companies in the last few weeks. I believe investors in the company see positive recent developments in Sigma Labs combined with their first mover advantage in addressing a critical industry need. I believe Sigma Labs’ partnerships and recent announcements with companies like GE, Honeywell,   Metronic Systems and their work with America Makes “for the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components”  are reasons why this little company has been outperforming. Moreover, I believe this trend will continue and is likely to accelerate as full scale commercialization of PrintRite3D® begins.

 

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Disclosure:  I am long shares of Sigma Labs Inc. (SGLB). I have not been paid by Sigma Labs or any third-party for this article.

 

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

 

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Subscribe to 3DPrintingStocks.com for free (box in left upper corner of page) to get news, articles, interviews, and actionable information on 3D printing stocks delivered to your inbox.

Arcam AB (AMAVF)Arcam AB, (AMAVF), is the first 3D printer OEM to report Q1 2014 results this morning, and the results are impressive.

However, the most significant event of the quarter in my opinion was not reported by Arcam in their results: The progress made on their Fast EBM project, the goal of which is to speed print times of high-grade metal components by a factor of 5X.

 

 

Q1 2014 Highlights:

 

  • 70% increase in sales
  • Net profit after financial items increased to 3.6 (0.1) MSEK (including non-recurring costs associated with the acquisition of AP&C of 6 MSEK)
  • Earnings per share amounted to 0.20 (0.01) MSEK
  • Cash at the end of the period 368.1 (38.3) MSEK
  • Order intake amounted to 6 (6) systems, and 7(4) systems were delivered in the period
  • The order book contained 11 (12) systems by the end of the period
  • The acquisition of the metal powder manufacturer AP&C was completed on February 11
  • Cash balance of 368 MSEK

 

Currency conversion SEK to USD

1,000,000.00 SEK = 152,132.56 USD
Swedish Krona US Dollar
1 SEK = 0.152133 USD 1 USD = 6.57321 SEK

 

 

Increased sales and improved earnings

For the first quarter we report a 70% increase in sales compared to the first quarter in 2013 and a significantly improved result. Trailing twelve month sales amounts to 226.2 MSEK and earnings amount to 18.9 MSEK. The result includes non-recurring costs in the first quarter 2014 associated with the acquisition of AP&C of 6 MSEK. The order intake during the period amounts to 6 systems and the order book as of today comprises 13 systems.

Acquisition of AP&C

In February we acquired the powder producer AP&C from Raymor Industries in Canada. AP&C is a leading manufacturer of high quality metal powder and supplier of titanium powder to Arcam since 2006. Titanium powder is an important part of our offering and with this acquisition we have secured access to the best technology for the production of high quality metal powder for our customers. The acquisition is fully in line with our growth strategy and complements our EBM technology and product portfolio. The acquisition was completed on February 11, and is consolidated from this date. AP&C´s share of group sales in the first quarter amounts to 3.5 MSEK after group eliminations.

Business status

We received 6 new orders during the quarter and we see a continued strong demand, particularly in Asia. The sales of our new large system, Arcam Q20, gains momentum and we have received 4 system orders. Arcam Q20 is planned for delivery to the first customers during the second quarter. The work to industrialize our technology with the major players within the aerospace and implant industries continue and we can now see good opportunities for volume orders during the year. At the same time, we see that the growing interest and knowledge in Additive Manufacturing and 3D printing creates interest within new segments. This may long term give opportunities for broadening of our product applications. Of the 7 systems that were delivered during the first quarter the majority went to customers within the implant or the aerospace industry.

The cooperation with DiSanto is progressing with agreements with customers for which DiSanto is manufacturing products.

Growth – organic and through acquisition

In addition to the acquisition of AP&C we are in rapid organic growth. We thus continue to recruit qualified employees in order to meet the expectations from our customers. During the quarter we have strengthened our service office in China and the support organization in Sweden. Through the acquisition of AP&C and through recruitment the number of employees has increased from 55 to 109 since March 2013.

An order book of 13 systems, increasing aftermarket sales and a positive business situation lays a solid foundation for a continued strong growth in 2014.

 

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Fast EBM Project update

 

The Fast EBM project which I wrote about last year, was a 2 year project funded by governments of the European Union that is now completed. The project’s goal was to increase printing speeds in high-grade metal components using enhanced EBM technology by a factor of 5X.

Arcam AB led the project and is the recipient of all intellectual property rights resulting form the R&D.

The recent project update on the Cordis website indicates:

-High productivity EBM machine: This depends upon high frequency deflection and high power electron beam generation. Designs have been produced and parts are being manufactured.
- FastEBM pre-qualification for aerospace components manufacture: These tests will commence once the testbed equipment is established.
- High power EB gun design: A 10kW gun design has been made and this is under manufacture.
- Low-aberration deflector system: A number of deflection systems have been analysed and a design developed. Drive electronics have been considered and a design proposed. This is now being manufactured ready for test.
- Manufacturing process model: Software has been developed to enable beam powder interaction to be modelled

 

Fast EBM Arcam AB printers in commercialization next year?

I asked during this morning’s conference call where things stood with Fast EBM and was surprised to learn that commercialization of the first iteration of Fast EBM machines is expected to begin as early as next year.  CEO Magnus Renee also stated that their new Fast EBM machines will speed printing times by a factor of “at least” 2X in their first generation.

The move from 3D printing’s use for prototyping and small batch production to full-scale manufacturing capabilities in high-grade metal components for the aerospace, defense, automotive, and medical industries is drawing closer.

Surprisingly still unknown to many investors and American analysts, Arcam AB is looking more and more like a company that will officially usher in that new era very soon.

 

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Disclosure:  I am long shares of Arcam AB (AMAVF). I have not been paid for this post by the company or any third-party.

 

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

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ARC Group

In after hours news: ARC Group Announces Stock Dividend (link)

 

“Jason T. Young, Chairman and CEO of ARC Group Worldwide, Inc., stated, “We have approved the stock dividend in an effort to increase liquidity in our stock.  Stockholders of record will receive an additional 1.5 shares for every 1 share they own.”

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I’m beginning this article on 3D printing services provider ARC Group Worldwide (ARCW) with an impressive chart that compares the year-to-date performance of ARCW shares to 3D Systems (DDD), Stratasys (SSYS), ExOne (XONE) and voxeljet (VJET). There are several material factors at play which lead me to believe that ARCW will continue to outperform these 3D printer manufacturers as well as the market in general over the next 3-6 months, factors I’ll discuss in this article.

ARC Group

arc group worldwide

High Growth at a Reasonable Value?  In the 3D Printing Industry?

At the recent Inside 3D Printing Conference and Expo in New York, I was honored to be part of a panel discussion on investments in the 3D printing space moderated by industry expert, Terry Wohlers.  One panelist mentioned that for the short term, pure play 3D printer manufacturers don’t have the fundamentals to support substantially higher share prices now that much of the “hyped” air has been let out of their bubbles.  Another opinion on the panel was that if you’re investing in the 3D printing industry you can’t look at fundamentals- just buy and hold until their earnings growth can sustain higher share prices.

Personally, I believe there are several companies within the industry right now that have both reasonable fundamentals as well as the fast revenue and earnings growth required to support higher share prices. ARC Group Worldwide is one of these companies and the chart above suggests that the market agrees.

 

Company Overview

ARC Group Worldwide (web site) is the largest metal injection molding (MIM) company in the world. Headquartered in DeLand, Florida, the company has multiple subsidiaries in the U.S. and Europe, approximately 440 full time employees, and a market capitalization of $213 million. For the trailing twelve month period ARC Group Worldwide generated $76 million in revenue, (which is $20 million more than the combined revenues of voxeljet and ExOne for the period), and reported adjusted earnings in fiscal 2013 of .85/share.

 

New 3D Printing Services Division Launched  

ARC Group WorldwideIn December of last year, ARC added 3D printing services to their operations with the launch of their 3D Material Technologies division, while also adding renowned 3D printing industry expert Todd Grimm to their board of directors.  As a result, ARC Group Worldwide can now leverage existing sales channels from their extensive MIM operations to ramp sales in their new 3D printing division.

 

In a shareholder update held just last week, CEO Jason Young discussed the company’s strategic growth initiatives, stating:

“Given ARC is the world leader in metal injection molding, we quickly identified 3D printing as a complementary technology to our core business. Metal 3D printing in particular dovetails with our metal injection molding business quite well given the customer base and the fact that the end use is quite similar; since metal 3D printing is still in its early days we believe our incumbent business will position us to be leaders in metal 3D printing.  At the very least our initial results for 3D printing technology in our facilities have clearly demonstrated the significant opportunity associated with reduced lead time and decreased cost across our supply chain.”

 

ARCW Now Has: “One of the Largest Capabilities in Metal 3D Printing Today”

What CEO Jason Young then stated last week is really quite remarkable:

We’ve made probably one of the largest investments in 3D printers in the country having purchased 16 industrial grade 3D printers, 7 of which were metal printers. I believe we have one of the largest capabilities in metal 3D printing today.

So in a few short months, ARC has rapidly grown their new 3D printing services division to position themselves as a future market leader in the space, particularly in the fastest-growing space in industrial 3D printing, the production of high grade metal components.

3D printing stocks

Prediction: Increased Awareness of 3D Printing Service Providers Coming

Many investors have focused on the manufactures of 3D printers as the only way to invest in the 3D printing industry due to the high level of media attention applied to the handful of public 3D printer OEMs. With the upcoming U.S. IPO of Materialise, a 3D printing services and software provider, I believe some of that media attention will shift focus to 3D printing service providers.  In fact, ARC Group Worldwide, now having “one of the largest capabilities in metal 3D printing today” may receive direct attention from the media as well as from investors unable to obtain what could be a high-demand Materialise IPO allocation. Like ARC Group Worldwide, Materialise is earnings positive. However the company’s 16% revenue growth for 2013 pales in comparison to revenue growth reported by ARC Group Worldwide noted below.

 

ARCW Earnings Growth & Comparative Metrics

For their fiscal year 2013 ARCW reported the following:

  • Fourth quarter net revenue grew 153.7% over fourth quarter of the prior year
  • Full fiscal year net revenue grew 125.3% over prior year results
  • Fourth quarter adjusted earnings of $1.7 million and full fiscal year adjusted earnings of $4.7 million
  • Fourth quarter adjusted EPS was $0.30 and full fiscal year adjusted EPS was $0.85
  • Full-year adjusted EBITDA of $10.1 million
  • Full year cash flow from operations was $7.4 million, up from $6.2 million for the prior year

 

ARC is now well into their fiscal year 2014, and while there are many positives in their SEC filings, the bottom line numbers are:

  • First quarter adjusted income increased 47.8% to a record $0.34/share over Q1 2013 (link)
  • In their most recent quarter, their second quarter, adjusted income rose by 127% to $0.32/share. This is faster earnings growth than any pure play 3D printer manufacturer reported in their most recent quarter. (link)

 

Potential For Earnings Estimates To Increase In Near Term

Average analyst estimates for fiscal year 2014 (ending in June) are $1.19/share, a 40% increase over fiscal year 2013. However, these estimates were made prior to last week’s announcement  of two acquisitions that ARC Group Worldwide states will “add meaningful cash flow” to the company and will be “immediately accretive to earnings.”

 

As a result, earnings estimates may very well be revised higher for 2014.

 

Comparative Metrics

Despite the strong earnings growth noted above, (which rivals the growth in any pure play 3D printing OEM), ARCW shares are currently trading at the lowest PE and the lowest price-to-sales ratios found in the 3D printing industry.

Company

PE
(trailing twelve months)

Price-to-Sales
(trailing twelve months)

ARCW

39.5

2.7

PRLB*

49.2

10.3

DDD

109.2

9.4

SSYS

NA

8.6

XONE

NA

9.6

VJET

NA

19.1

Source: Fidelity Investments (4/12/14)
*Note: While Proto Labs (PRLB) offers no 3D printing services, I’ve included it due to their CNC machining and injection molding operations.

 

Insiders Buying More Than 3D Printers And Accretive Acquisitions…They’re Buying Shares

There are many reasons why management might sell shares of their company that are not inherently negative-  such as accessing funds for a home, a big wedding bash for a daughter or grand- daughter, a new boat, etc.  However, there’s only one reason for management to buy shares in the open market, and it’s because they believe the company is undervalued.

ARC Group Worldwide
Insider Trading Activity

 

Last 3 Months

 

Last 12 Months

Number of Open Market Buys

2

18

Number of Open Market Sells

0

3

# Shares bought

8,750

179,685

# Shares sold

0

4,000

Source: Nasdaq.com

I invite investors to research SEC Form 4 insider transactions in any 3D printing company, pure play or otherwise. None will show the high ratio of insider buys to sells that ARCW has over the last year. In fact, almost all will show far more open market selling than buying from insiders.

 

Conclusion

I believe ARCW shares will continue to outperform 3D printer manufacturers and the broader market due to the company’s reasonable valuation and strong projected forward earnings growth.  In addition to being an established leading metal injection molding company, ARC Group Worldwide has quickly emerged to offer “one of the largest capabilities in metal 3D printing today.”

Average earnings estimates of $1.19/share for their fiscal year 2014 may be revised higher soon due to accretive acquisitions announced last week. Earnings growth in the most recent quarter far exceeds earnings growth in any publicly traded 3D printer manufacturer or in Materialise as it readies to IPO, yet ARC Group Worldwide sports comparatively favorable valuation metrics.

Insiders are buying shares in the open market for a reason. CEO Jason Young may have shed some light on that reason when he explained last week:

“We don’t know of any other companies that have this model which we believe is quite unique and scalable. We have an extensive and high quality customer base with underlying industries that are growing and we believe there’s an exciting opportunity to round-out our product offering while bringing new technology like 3D printing and automatic online quoting software to pioneer the future of manufacturing.”

Lastly, it’s now clear that successful investing in the fast-growing 3D printing industry requires more than (often inaccurate) media hype. For a sustained rise in share price, companies must demonstrate strong bottom line earnings growth, and that’s exactly what ARC Group Worldwide is now doing.

 

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Disclosure:  I am long shares of ARC Group Worldwide (ARCW). I have not been paid by ARC Group Worldwide or any third-party for this article.

 

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

MGI Digital logoIn news released this morning, MGI Digital Graphic Technology (ALMDG) on the NYSE Euronext, and (FRIIF) on the U.S. OTC market, announced the sale of three of their Ceradrop printers.MGI digital

CERADROP is a cutting-edge company founded in 2006 by members of the CNRS (Centre National de la Recherche Scientifique) the world-renowned laboratory, and has become the French leader in inkjet equipment for printed electronics market and intelligent 3D printing.

The press release goes on to state that “These orders represent a combined turnover of € 700 K (approximately $ 966,000 USD) for the first half of 2014. These commercial successes not only reinforce CERADROP’S recognition on a global scale, they also validate MGI Digital Graphic Technology’s strategy to focus on the highly promising market of Printed Electronics and 3D printing.”

MDI Digital acquired their new Ceradrop printer division last fall and Konica Minolta recently purchased a 10% ownership stake in the company.

MGI Ditigal has a PE ratio below 40 and rapid earnings growth. The stock continues to strongly outperform the high-multiple pure play 3D printing stocks, and is up just over 30% YTD.

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For more information on MGI Digital and Ceradrop printers, see: Meet a 3D Printing Stock With a PE of 40: MGI Digital Graphic Technology (ALMDG)

and: New 3D Printer Company, MGI Digital Graphic Technology, Reports Record Revenue & EPS $1.50.

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Disclosure:   I am long shares of MGI Ditigal (ALMDG).  I have not been paid by any company or third-party for this article.

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

 

 

 

3D printing stocks- a view from Australia

3D printing stocks
Robert Bugge

Corporate in-house transaction attorney, Robert Bugge, shares his thoughts from Australia on 3D printing stocks.

3D Printing: The River and Traction in 2014

2014 hasn’t been a good year so far for 3D printing stocks.  Some say that 2013 was the year of hype, with analysts trying to plot the growth of 3D printing using Moore’s Law and a technology adoption curve.  Others say, that companies like 3D Systems (DDD), Stratasys (SSYS) and ExOne (XONE) are overvalued.  Yet, while all of this is happening each and every one of the major 3D printing companies are making significant investments in growth, at the expense of EPS and all of them have done so via profit warnings to which they were all thrashed by the market.  So what are investors to think?  Should all of the longs bet on the strategic investments in R&D, sales, marketing, channels, and head count that all of them are making?  Should they believe that the hype cycle is over and head for the exits as many already have?  Or, should they hold on, and if they do, why?  I am long and while I am disappointed with the shorts and many of the ill-informed analysts, I sleep at night because I look at 3D printing a bit differently, so maybe what follows will provide cause for pause and garner a greater understanding for what is happening in this sector that has been likened by many to be the third industrial revolution. 3D printing stocks

3d printing isn’t a product, it is a manufacturing process – an additive manufacturing process that provides substantial savings in materials and energy costs and will completely change current approaches to inventory and logistics.  It is accomplished via a dozen or more different processes across dozens, if not hundreds of different materials.  It also can be used in hundreds of different manufacturing processes, each of which represents a vertical market.  It is this, the potential application of 3D printing to literally thousands of manufacturing verticals that sets it apart from other new technologies.  There are also other aspects of 3D printing that set it apart from other technologies that more readily lend themselves to the application of the traditional technology adoption curve.  They include, providing a reduced barrier to entrepreneurial manufacture, new material advances across verticals, decentralized manufacturing and the impact on logistics.  As the size of the potential market is as yet completely indeterminable, it is questionable whether opining that we are at the beginning, middle or end of the technology curve hype phase is of any relevance.  It is, even more questionable whether the traditional technology curve even applies to 3D printing.  I would argue that it does not. 3D printing stocks in 2014

Governments are investing millions in 3D printing and not a day goes by without news of a new vertical that has figured out a new way to use for 3D printing.  3D printing gives governments and manufacturers a competitive advantage, whether it is weight reduction in aerospace, rapid prototyping in engineering, a revolution in dental implants or new break throughs in bio printing.  There is little doubt that 3D printing is a game-changer.  As 3D printing provides an enormous competitive advantage, it is certainly not surprising that most manufacturers aren’t talking too openly about if, or how they are using it.  Neither are the 3D printing companies and for good reason – they are in a race to capture new verticals and don’t want to tip their hands.  So, while announced acquisitions give us some clues in the chase for verticals, the real clues will come in their sales numbers in the months and years ahead.  In this regard, many of them are forecasting growth at 40-50% per annum.  Not too shabby from my perspective.  So, how should investors look at all of this?  Well, maybe some other construct or analogy could better depict where we are and here we are going with 3D printing, better than the oft ill-applied technology adoption curve that has us stuck at the end of hype.3D printing stocks

3D printing has been around for more than 20 years.  During that time, its efficacy in rapid prototyping has matured and it is now actively being applied in direct manufacturing in a number of different verticals.  If you were to imagine a cross section of a river with flood plains to the right and left, and canyon walls at the outer edges of both sides of the flood plains, you could easily liken the 20 year growth of 3D printing to the rising of the river to the crest of its banks.  It is my view that 3D printing is now at flood stage – it has overflowed its banks and is now spreading out across the floodplain toward the canyon walls.  Physical science tells us that, when a river overflows its banks and spreads out across the floodplain that it slows down.  This is precisely what is happening with 3D printing.  If you also imagine that the floodplain is covered with trees, and each tree represents a vertical market you can see that slowly each of the trees – the vertical markets are being touched by the rising waters of 3D printing.  All of the 3D printing companies are investing millions in R&D, marketing, sales and channels to be the first to touch and capture as many verticals as they can – they want and need first-mover advantage in these verticals.  In short, they are seeking traction in as many verticals as they can, as fast as they can.  The wild card in all of this, is how much traction (read orders) can they get over what period of time? Stated differently, when will their recent investments pay off?  Are some verticals likely to purchase none, ten, a hundred or a thousand 3D printers?  Some will embrace 3D printing because they want to, others will do so because they have to, and others will die-off because they didn’t.

Many analysts have said we are at an inflection point.  I agree.  3D printing is on the verge of being embraced by hundreds of vertical markets, but once again the realities of physical science come into play.  Only when the flood crossing the floodplain of verticals reaches the canyon walls, will the river rise again and pick up speed.  The key to reading all of this is the rate of uptake by the verticals.  Will it be fast or slow?  Limited in some, and enormous in others?  The answers may lie in three factors – competition, reduced manufacturing costs and government sponsorship.  Competition and reduced costs are hugely compelling pressures that are driving verticals to rapidly adopt 3D printing.  And yes, don’t under estimate the competition between governments as they see 3D printing as a game-changer both in terms of GDP, as well as in defence and logistics.  When the government procurement machines crank up to buy 3D printers the only question will be manufacturing capacity.

To take the long view on 3D printing is to more accurately liken it to electricity.  It might take a while, but it will touch every aspect of our lives just like electricity did when it came on the scene.  I’m betting the 3D river will begin to flow faster than any of us expect, as the uptake by the verticals – and the aspects of our lives that they will touch – will grow much faster than the 20+% CARG forecasted.  Many of these verticals have been testing the waters and are poised to place substantial bets on 3D printing.  As they do, we will be getting the traction that will likely be the hallmark of 2014-2015.  I’m not worried.  Are you?

3D printing stocks

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About Robert Bugge

Rob is a corporate, in-house transactional attorney specializing in information technology, software licensing and government contract law.  His career spans 27 years where he has held positions as Senior Legal Counsel for Racal Electronics Plc, Assistant General Counsel Price Waterhouse Washington D.C., Counsel to the Canadian Commercial Corporation, Senior Counsel at the Washington law firm of Dunnells, Duvall, Bennet & Porter and Vice President, General Counsel and Director of Contracts for RJO Enterprises.  Rob retired in in 2011 from his position as Director of Legal Services Asia Pacific for Nuance Communications Australia based in Sydney, where he was responsible for multimillion dollar smart phone software licensing transactions across the Asia Pacific region for companies including Samsung, HTC, Nokia and Huawei.

Rob got his BA from the University of Florida in 1979 in Political Science with a specialization in military strategy, the Middle East and foreign arms sales where he studied under John Spanier who was the US lead negotiator of the SALT I Treaty and John Eisenhower for military strategy.  Upon graduation he was employed by the Boeing Military Airplane Company as a Weapon Systems Analyst in their Military Airlift Division where he was responsible for Middle Eastern mission planning while his masters degree studies and thesis at Wichita State University focused on arms sales as an instrument of foreign policy.

Rob attend the Cumberland School of Law where he graduated with his JD in 1986.  While in law school Rob was appointed by the American Bar Association as Law Student Division Representative to its Section on Government Contract Law.  After law school and pending completion of the bar exam Rob took a position as a Senior Contracts Administrator in Honeywell’s Space and Strategic Avionics Division where he managed a number of space-based military weapon system development contracts.

Rob is admitted to practice in Washington, DC, Florida and New South Wales Australia.  In 2003 Rob completed a 2 year 14,000 nautical mile TransPac sailing voyage aboard his 36’ sailing yacht Lone Eagle.  He began his voyage from Washington DC a month after 911, transited the Panama Canal and visited more than 22 countries.  Rob has dual US / Australian citizenship and lives with his wife in the little beach-side town of Yamba, New South Wales about 3 hours South of Brisbane.

Inside 3D Printing

 

“The Greatest (3D Printing) Show On Earth” returns to New York this week.

 

The Inside 3D Printing Conference and Expo will be held at the Javits Convention Center in Manhattan April 2-4, and it’s shaping up to be the largest on record with the addition of the “Maker Summit and Pavilion.”

Nasdaq listed Mediabistro Inc, (MBIS) is the producer of the Inside 3D Printing Conference and Expo events, and the company has more events scheduled around the globe for 2014.

 

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FEATURED SPEAKERS & KEYNOTERS AT INSIDE 3D PRINTING CONFERENCE AND EXPO NEW YORK 2014

Carl Bass, President and Chief Executive Officer of Autodesk, a leader in 3D design, engineering and entertainment software, will deliver the keynote, The Future of Manufacturing: 3D Printing and Beyond, the morning of April 4.
Curtis Carson, Head of Systems Integration for Centre of Competence Manufacturing Engineering at Airbus, will keynote in the afternoon of April 4. Carson will share his insight into how aircraft production can potentially benefit from emerging technologies, as well as Airbus’ vision for the integration of 3D printing applications.
Christine Furstoss, Global Technology Director of Manufacturing & Materials Technologies at GE, will keynote in the afternoon of April 3. GE uses 3D printing when making medical devices, jet engine parts, and prototyping components for washing machines.
Maxim Lobovsky, Co-Founder of Formlabs, will deliver the Maker Summit keynote “Kickstarting Innovation” on April 4th. Formlabs’ Form1 3D printer is the most-funded technology project in the history of Kickstarter and the company recently raised a $19 million Series A round.
Avi Reichental, President & CEO of 3D Systems, will discuss how 3D printing is revolutionizing the manufacturing industry in the morning keynote on April 3. 3D Systems is one of the fastest growing companies, according to Forbes.
Terry Wohlers, named the #1 most influential person in rapid product development and additive manufacturing, will use his expertise to examine the relationship between professional investors and the 3D printing industry, including what types of startups venture capitalists are looking to fund.
Inside 3D Printing Conference
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Panel Inside 3D Printing 
I’m honored to be participating on a panel discussion on April 3, “How Professional Investors are Playing the 3D Printing Boom” with Tracy Albert, David Honig, and Len Wagner, moderated by Terry Wohlers.
So plan to come and stop and say hello.  I love meeting subscribers, making new friends, and chatting about (what else?), 3D Printing Stocks!
3d printer stocks
Inside 3D Printing
inside 3d printing conference video 2013
- Here’s video from last year’s New York conference -

inside 3d printing conference and expo 2014

So register now, and I hope to meet you there!

- You can also get 15% off a full conference pass using this link.

register now for inside 3d printing conference

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

 

 

 

Lomiko MetalsResearch and Markets released their latest report on 3D printing this morning:

“Global 3D Printing Materials Market 2014-2018: Revenue Contribution of Customers to Global 3D Printers Market Expected to Post a Year-On-Year Growth Rate of Over 90%” See link.

The list of vendors in the global 3D printing materials space contains the usual well-known names like Stratasys, EnvisionTEC, 3D Systems, EOS, etc.

Also included is Lomiko Metals, (LMR), (LMRMF), a Graphene miner in Canada, with an ownership stake in Graphene 3D Lab Inc.  Lomiko Metals will be the sole supplier of graphene to Graphene 3D lab Inc., and the two companies have applied for patents for graphene-enhanced printer filament.

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Lomiko Metals is the only pure play graphene-enhanced 3D printing materials R&D company that is publicly traded. Their recent capital raise for gross proceeds of $5.5 million should enable Lomiko Metals and Graphene 3D Lab Inc. to continue their research and development of graphene-enhanced 3D printing materials.

Read more on Lomiko Metals, the amazing potential of graphene-enhanced 3D printed materials, and Lomiko’s partnership with Graphene 3D Lab in: Lomiko Metals (LMRMF) Enters 3D Printing Materials Market with Graphene.

 

Video with Lomiko Metals CEO, Paul Gill, on graphene’s potential in 3D printing.

 

Disclosure:   I am long shares of Lomiko Metals.  I have not been paid by any company or third-party for this article.

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

 

Groupe GorgeIn a press release this morning, Groupe Gorge announced their shares will be added to the CAC PME index effective April 1, 2014. Groupe Gorge also meets eligibility requirements for the PEA (personal equity plan)-PME (small and medium enterprises) investment plan. Investors with a PEA-PME receive favorable tax advantages which include tax-free gains provided they hold the PEA-PME for at least five years.

 

Prodways_LogoGroupe Gorge is a French engineering firm with global operations (web site) and has entered the 3D printing space with the acquisition of Prodways last year.

Groupe Gorge trades on the NYSE Euronext exchange under ticker GOE, and as a BNY Mellon sponsored ADR (American Depository Receipt) with ticker GGRGY.

See also:

Previous article on Groupe Gorge, The Best 3D Printing Stock to Buy Now is One You Haven’t Met

Interview with CEO, Raphael Gorge,  Interview with Raphael Gorge

prodways

prodways

Co-Founder of Prodways and creator of MOVINGLight® technology, Dr. André-Luc Allanic

 

 

Disclosure: I am long shares of Groupe Gorge (GOE)

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

MGI Digital logoMGI Digital Graphic Technology (ALMDG on NYSE Euronext, and FRIIF on the US OTC) is entering the 3D printed electronics market following their acquisition of electronics 3D printer OEM, Ceradrop, last fall.

 

At the IPEX 2014 event in London, it was announced that industry giant Konica Minolta, (10% stakeholder in MGI Digital), will be working with MGI to further develop the Ceradrop printer line (see last sentence).

MGI digital

MGI Digital reported $1.50 US in earnings in 2013, including sales from their Ceradrop division. I wrote about the company previously in: Meet a 3D Printing Stock With a PE of 40: MGI Digital Graphic Technology (ALMDG).

In my view this is a significant endorsement of the Ceradrop printer technology and future development potential, and it bodes well for MGI Digital’s future with their newly acquired Ceradrop printer division.

 

Disclosure: I am long shares of MGI Digital Graphic Technology (ALMDG)

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