The Best 3D Printing Stocks For 2014
It goes without saying that 2013 was a great year for 3D printing stocks. This was due to the projected 25-30% CAGR for the 3D printing industry, as well as increased investor awareness of the industry’s ongoing evolution from rapid prototyping to larger scale manufacturing.
What about 2014?
I believe 2014 will see a return to some consideration of fundamentals in 3D printing stocks, and those that don’t have the fundamentals to support their current valuations will strongly underperform. Stratasys (SSYS) dropped over 8% yesterday on projections of increased revenue but decreased income for the year. Harder hit was The ExOne Company (XONE) which lost nearly 14% in after hours trading when they released a disappointing full-year 2013 outlook after the close. That’s the problem with most of the well-known 3D printing stocks- they’re priced to perfection and in some cases, even beyond perfection to this 3D printing stock investor. Don’t get me wrong… I’m very bullish about the 3D printing industry, but I believe the best investment opportunities in 2014 will not be in the stocks you’ll read about in the mainstream investing publications. They’re completely focused on the already-known, and deceptively “safe” 3D printing stocks that everyone writes about.
The question I’ve been asked more than any other in the last few weeks is:
“What are the best 3D printing stocks for 2014?”
My answer? “I don’t know yet.”
best 3d printing stock 2014
That answer isn’t an attempt to be evasive. My answer is based on the historic fact that last year the two best performing 3D printing stocks for the 12 month period were of companies that very few investors were aware of in January 2013: R&D microcap Sigma Labs (SGLB) and metals-focused Arcam AB (AMAVF).
the best 3d printing stocks for 2014
The chart below shows the 2013 returns of Sigma Labs and Arcam AB in comparison to 3D Systems Inc. (DDD).
This is why I believe the best 3D printing stocks for 2014 will again be of companies most investors haven’t heard of yet. They’ll be companies that aren’t already priced with PE’s of 200+ or Price/Sales of 25 or 30 and higher. They’ll be the stocks of companies making a legitimate move into the industry with the disruptive, proprietary technology required to both seize and capitalize on the opportunity. They’ll be companies like Sigma Labs and Arcam AB which I wrote about in June and July of 2013 respectively, and interviewed both CEOs here on 3DPrintingStocks.com.
The best 3D printing stocks for 2014 may well be across the pond. Shares of Gorge Groupe, (GOE.PA), a French engineering firm now entering 3D printing with their innovative Prodways line of printers closed up 4.5% yesterday, bucking the 3D printing stock sell-off. In the US market, Gorge Group shares closed up over 7.6% under ticker GGRGF. You can learn more about Groupe Gorgé in this November article and in my interview with the CEO, Raphael Gorgé, here.
There are other companies in Europe and beyond that are either engaged in or are entering additive manufacturing that are experiencing high growth, and yet have low PE multiples and other encouraging fundamental metrics. I’ll be writing about several of them on the recently launched 3DPSPremium.com and here in the weeks and months ahead.
I think there will be at least 3 IPOs this year and the following short list are some candidates:
Potential 3D printing service bureau IPOs:
Any company that IPOs this year could be among the best 3D printing stocks for 2014, and I’m looking forward to writing more IPO articles like the voxeljet IPO primer.
Characteristics of the best 3D printing stocks for 2014
In my opinion, characteristics of the 3D printing stocks that will outperform this year are:
- Companies not already priced to perfection
- Companies with proprietary, disruptive technology
- Companies that very well may be in headquartered beyond U.S. borders (potential candidates now exist in the European Union and Israel)
- Companies with a focus on industrial applications, (medical/dental/prosthetic implant markets, aerospace, automotive), metals, or materials development
- Companies you won’t read about early on in publications like Forbes, The Motley Fool, Investor’s Business Daily, or The Wall Street Journal until, (like Arcam AB), they’ve already risen some 400%.
There are opportunities out there for great returns in 3D printing stocks again this year, but investors will once again need to be ahead of the market to find them.
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Gary Anderson…..Follow me on Twitter: @3DPrintingStock