ExOne (XONE) and Arcam (AMAVF)

ExOne and Arcam are two 3D Printing companies with a business focus in the high-growth metals segment of 3D printing.                                                              ExOne and Arcam

ExOne (XONE) had a very successful IPO on the NASDAQ GM in February of this year, and is a company I profiled in June and still retain shares of.

Arcam AB up-listed to the NASDAQ OMX (ARCM.ST) last year and trades as an ADR, or American Depository Receipt in the United States under the ticker AMAVF.  My profile of Arcam AB is here.

ExOne and Arcam                          ExOne and Arcam

Both companies have stocks that are on a winning streak as the 6 month chart below confirms.

XONE-Arcam 6 month chart

 

But in the last month there’s been an increase in average daily volume of little-known Arcam AB with a corresponding share price appreciation out-pacing ExOne.

AMAVF-XONE 1 month chart

 

I believe there is early rotation going into Arcam AB from other 3D printing stocks, as investors are becoming aware of the company’s fundamentals, positive ttm EPS of .85/share, comparatively tiny market capitalization, and tight share structure which are outlined below.

Company

ExOne (XONE)

Arcam AB (AMAVF)

Shares Outstanding

13.3M

4.1M

Market Capitalization

$850M

$324M

Float

6.8M

2.2M

Revenue (ttm)

$33.9M

$27.5M

Revenue/share (ttm)

$2.55

$7.33

Net Income (ttm)

-$12M

$3.21M

Profit Margin (ttm)

-31.2%

+ 11.7%

Net Income/diluted   share

-0.91/share

+ .85/share

Total Debt (mrq)

$5.3M

0

Book Value/share   (mrq)

$6.46

$7.56

Operating Cash Flow (ttm)

$-9.4M

$4.73M

(source: Yahoo Finance)

In a Q&A conducted with the CEO of Arcam AB, Magnus René last week, the forward look for the remainder of 2013 was strong.  The company already has more orders for their 3D printing machines to be delivered in the second half of 2013 (lead time averages 3 months) than they delivered in the first half.

Mr. René also stated: “With the good growth in first 6 months of 2013 and the strong order book we have a solid foundation for continued strong growth in 2013 and beyond.”

 

Invest Like Wayne Gretzky

Successful investors can take a page from legendary hockey player Wayne Gretzky, well known not only for his superior playing ability, but this quote when asked how he is so successful in playing hockey.  To that question Gretzky replied, “I skate to where the puck is going to be, not where it has been”.

Increasing volume into Arcam AB on both the US market and on the NASDAQ OMX suggest there are some skaters heading to where the puck is going to be right now.

Moreover, I believe that this increase in volume and share price is occurring based on fundamentals.

As Arcam AB is discovered by more investors as having the lowest PE ratio combined with the highest rate of organic growth (sales increased 80% in the first half of 2013), with no dilutive acquisitions and a strong remainder of 2013 outlined by management, I expect this upward trend in volume and share price to continue.  This expectation holds as long as there are no major market setbacks.

My personal mid-term (8-12 weeks) price target for Arcam AB is $100+/share, based on fundamentals and an increasing investor awareness of the company in the market. This is not a recommendation to buy the stock, (see 3DPrintingStocks.com site disclaimer on the left of page), only my personal opinion. Please consult an investment professional and do your own due diligence prior to making any investment, including in Arcam AB.

 

Disclosure: I am long XONE and Arcam AB. I received no compensation in any form from any company or any third party for this article.

 

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

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