+ Watch DDD
on My Watchlist
The Company through subsidiaries designs, develops, manufactures, markets and services rapid 3-D printing, prototyping and manufacturing systems and related products and materials.
People who have never invested a dime in the stock market their entire lives are asking me about this stock and frothing at the mouth to get in at these prices...once the music stops, this one is going back to $35.
Thanks for the heads up.
I can't imagine investing in a stock with a p/e ratio of 80+. I don't care how you justify it; a p/e ratio that high means you're too late to the party. (MAYBE I'd make an exception for Amazon, because deep down I think they're actually going to make it, but I'm not in Amazon either.)
Couldn't agree more!
"People who have never invested a dime in the stock market their entire lives are asking me about this stock and frothing at the mouth to get in at these prices"This is one of the biggest danger signs. It's time to jump ship, even if you are in it for the long run. You can buy again for the long run @ 25.
short sellers will feed the rally, and it's hungry so go ahead.
scary thing doc, my god 80% of people with stock investments dont even know wtf a p/e is
People say it was going to go down to $25 when it was at 45. Now it's at 63. You're saying its gonna loose half of its value even though their balance sheet has beaten market expectation? P/E doesn't apply to all stocks especially one that's growing this quickly.
@ROingWell lets do some math then...Current price 64 USD with an estimated EPS of 1.16 USD for 2012 which gives us a P/E of roughly 55.EPS growth estimate is roughly 30% per year according to analyst expectations. By the time a growth stock reaches maturity the P/E ratio will have to go down, so we assume that DDD has a P/E ratio of 15 when it reaches maturity. That means that with the current P/E ratio earnings have to multiply by 3.67 (55/15) to compensate for the lower P/E or in other words: This growth is already priced into the stock today. With our estimated growth of 30% per year that would take DDD 1.3^x = 3.67 : ~5 years!To sum that up: If DDD grows like expected and reaches maturity in exactly 5 years, the stock price might be about the same as today and your return will consist only of retained earnings (1-2% per year) which is pretty bad. If it grows for a longer period of time, the return will be decent. However if expectations are missed, you will lose a lot of money.So I do think that DDD at the current price is to be avoided like the plague. People can say there's "huge potential" and "...but the stock is rising and rising"(which is one of the worst things to ever use as a reason to buy) as long as they want. And yes maybe DDD is destined to become the infamous 100 bagger, but that doesnt make it a good investment today when your payoffs and their corresponding probabilities are not in your favour.
Couldn't agree more with the downward sentiment! I will happily snatch up share at a later date. I remember thinking the shares were cheap at the last turning point, and regret not buying in! Foolish of me N:P
@RaphaelGreat explanation of growth metrics. Still amazed this stock is moving parabolically...but I'm taking the longview on this downthumb. Once sentiment changes on this one, it will do what 90% of other parabolic moves end up doing over the midterm...return to the point of lift off.
I'm ok with a 90 or even 200 P/E as long as earning keeps growing. If all we did was look at P/E, then stock picking can be done by monkeys. There are a thousand other factors to consider to determine if a company is worth investing. They are the industry leader and they will only expand with accumulations and organically grow exponentially. Plenty of other companies with P/E higher than 100, but they are great companies to invest. P/E is what you see, it's the things you don't see that'll make or break the company. This is one of very few industry that can have an impact in practically every industry I can think of. Their potential is limitless.
You shouldn't try to time the market as the motely fools always advocate, but invest because they are GREAT companies.
Hmmm...I wonder when the right time to issue a short sell is...?Companies work their large corporate butts off to make revenue which then gets eaten by cost which as any mathematically able investor would know gives the resulting profit figure. Even though a company releases profits on an epic scale, when it comes time to divvy this into the stock, the price difference sometimes doesn't exceed more than a few cents per share. Why then has DDD grown at such a ridiculous rate?DDD is a great company and has a lot of growth built in, but it's presently valued way too high! More than just mathematics goes into stock picking, but when the numbers start screaming a turn around is nigh, one shouldn't ignore them. It seems pretty clear that this stock is being PUMPED.Speculating is one of the things that sets the Motley Fools apart from other investing communities. Everyone here has a different view, and while we may not always agree and are not always 100% accurate, we learn from each other and grow our investing prowess.If you, ROing, feel like placing your faith in DDD with real cash because you believe it's a great company, be my guest! You may find that emotions and monkeys have no place in the stock market... only Fools.
@ROing I happen to agree that DDD has 'Great Company' potential. Theyre the leader in their field, and you always have to pay for quality, so you're right that p/e isnt always the whole story. However great companies don't always make great stocks. Sentiment drives stocks just as frequently as the fundamental business and numbers. My original point was that sentiment is obscenely high right now for DDD, and sentiment is an ever changing variable (see NFLX, GMCR, AAPL, etc. etc. etc.) The same folks who come to me and say, "I got an email in my Spam folder about this great company that's supposed to gain 10000%," are the same people looking at this 400% run in DDD and licking their chops to buy...this isn't a matter of market timing, for all we know it could be $80/share by next weekend. This is a matter of gravity, and once sentiment changes(and it will), the riskier trade is to the upside.
@lovemesomegreenIf you believe in the company and its growth, and you're waiting for a pull back, then you're timming the market. It might pull back it might not, but the industry is worth investing in.Was Apple too expensive back in Jan 18, 2008 closing @ $161.36. Or was it too expensive when it closed @ $700.71 on Sept 21, 2012? Is it too expensive now? If you've tried to time Apple, then you got left behind.
Gonna have to agree to disagree. I just feel like you're proving my point by comparing DDD to AAPL :-) Two things I consider facts: Pullbacks are inevitable, and this company is not AAPL, not even close.Even if you had bought AAPL @ $161 on 1/18/08 (under a 30 p/e btw...3x less than DDD currently), you would've had 0 or negative return for the majority of '08 & more than half of '09. My goal is to make $$, not believe in growth stories! But hey, no worries... as they say, this is what makes a market! Cheers!
In ten years DDD will grow into a giant, as Apple will shrink. Apple is only as good as its CEO, and since Jobs (the golden boy) is gone, no new innovative product will come. Cook is NOT nearly as talented charismatic or innovative. Other companies will eat up all or most of the market (Samsung has overtaken them). DDD has unlimited avenues of growth. They may not be Apple now, but give them time, they can be more. P/E doesn't determine if a stock rise or fall, its expectations (if they are met or not). So far, they have. I don't see any restrictions in this industry as a whole. It can be ubiquitous, if they play their cards right. It's still in its infancy. You are obviously hoping for a pullback, saying it will go to $35 (?), to get in. What if it goes to $55 then rockets to outer space? Where is your proof that it will return to $35 even though expected earnings is gonna grow?
I completely agree with DDD's year-to-year growth potential, but why pay too much for any great stock?!
buy and ride this one until cows come home and johnny sings you a lullabye
lolrisky, but I like your idea :)
@mr.onehundred. What do you consider too much for a GREAT stock? I bought mine at $37 when people like you are screaming overpriced. Should I sell and wait for a pullback to get back in? NOT ON YOUR LIFE!!!
Mr.Green....I'm with you. Been riding this tech pioneer since 26.50 and adding in fact.Sold off a good portion off on the ride up but still long and quite confident in DDD.The shorts are making a lot of noise but the yelling has turned to pain and it'sgetting louder.Thank you for the post.Tom Durkin
The price is very powerful. It can make a great company a bad investment and a mediocre company a great investment. I prefer to buy the great companies after they've disappointed Wall Street and the darlings have become fallen angels.Also DDDs growth is limited. I'd rather buy Facebook than DDD right now even though I dont like Facebook either. Both have a very high valuation. However for FB there is at least the possibility that they can deliver and justify their valuation, because as soon as they find a way to make money they can grow at an extremely rapid rate since they don't sell physical goods.In case of DDD there can be positive surprises but it is hard for them to grow faster than 30% per year since they need new facilities and capacity in order to produce and sell more and building those takes time. And as I stated in my "math post" earlier, the physically possible growth is not enough to justifiy this valuation.
@raphael1990. What if they acquire companies? Can they grow faster than 30% ceiling you've placed on them?
I seriously doubt Facebook is a better investment, they're just a social media. Their main income is advertisement, that's why their stock has been stagnant. It's free to all users even businesses. They WILL be replaced by something else, like all trendy social media. Talk about a super hyped IPO, Facebook is it. Facebook with a P/E of 286, and you're putting down DDD? DDD can be in any goods manufactured. The technology can only get better. Btw, anyone checked apple lately?
No, because an acquisition has a similar effect on the balance sheet as organic growth. In both cases new assets are generated by buying them with cash in order to produce more. This cash has to be generated by the firms cashflow which takes time or by taking on debt or new equity. As far as I know DDD already has a decent debt level so this option is rather limited and selling new shares dilutes the EPS so this option is not optimal for shareholders either.The problem is now that they can only invest in so many new assets per year because their cash is limited. Thus their growth is more limited than the growth of companies that do not rely on assets as much. That's the reason why Google has been able to become so big rather quickly and other growth companies start to struggle at some point.Also since DDD is first mover in its industry and creates extremely complex machines that requires a huge amount of knowledge they can hardly rely on other companies. For example Apple manufactures physical products as well and has grown pretty fast in recent years, but their products are more derivative so there were a lot of companies out there to supply them with the hardware components necessary and so Apple did not need to invest as much to widen their production capacity.
Yea I dont like Facebook as an investment at all. I just brought it up to make a comparison between a company that relies on assets (DDD) and a company that does not rely on assets that much (FB). When FB finds the holy grail, a way to monetize their userbase better they can grow their earnings by 500%(arbitrary number) in the first year, because they need to invest hardly anything. They even have the users already. Another example is the earlier mentioned Google. They invented their search algorithm and set up their website. And then it was just a case of people using it. They didnt need to invest money for every new user.However even if tomorrow everyone on earth wanted to buy a 3D printer, DDD needed to make huge investemts to increase their capacity which would take time and more cash than they can borrow. So even then: With almost unlimited potential, growth would be limited.
If DDD machines are so complex then it's harder for competitions to come in and grab their market, that's why Apple faces so much competitions, their products are so easily replicated and out done. Apple with a P/E of 12x, I still wouldn't touch it, new ceo is a moron. That's why I don't rely heavily on p/e, but market expectations. Google's has many other income and not only relying on advertisement. Google is a good buy, not Facebook.Not many companies are like Google except yahoo. Even yahoo is falling, they too is like facebook in a way. They need to expand their horizon or they going to go away as well. Don't tell me Apple is a good buy, because market knows it's not REGARDLESS of p/e. Once again, p/e doesn't determine if a stock will rise or fall.
Very nice explanation Raphael1990; you definitely know the fundamentals and this stock. I'm not sure I could have explained it much better. Sold all my shares after the earnings hike (bought in at about 36.55), and will wait for that eventual correction. :)I don't like Facebook either mostly because of the way they treat their consumers like cattle to be fed to the corporate slaughterhouse. I can't stand corrupt administrations, and I think most consumers don't like them either. If they don't clean up their act, word of their corruption "I feel" could spread through the grapevine. Just MO.
The whole sector is getting crushed today on tremendous volume with no real news at all. DDD might trade 10 million shares today...it's never done 6 million in the 30 years it's been around. That's bad news for DDD bulls in my opinion...beware any short-term bounces, there are still a lot of weak hands who bought over $70/share out there.
Agreed. In my experience, there is oftentimes a short bump up (which is where I usually consider starting a short position) and then a steady, sometimes dramatic drop from there. There's no way I'm going long with this company from here. Just MO.
The only downside to that strategy this early, Mr. 100, is if we're setting up a head & shoulders pattern...if this correction is only the 1st shoulder, then in theory it will blow through it's 52-wk highs again in a last gasp over the coming weeks...If I were to short IRL (which I don't often), I'd probably add positions at three arbitrary prices to make a stand. $65ish...in case you're correct and we don't see new highs. $71-$72...current highs, possible double-top. Then $80-$85ish, in case the market gets frothy one more time. At that point, you'd have a CB in the $70s and would be pretty well-positioned if we see another 15% down day for no reason.
AMZN comes to mind.
Interesting strategy, I'll take note of that. (Calling it "Rule #2: Triple tap")Whenever I consider a short, I generally pull most of my long stocks and short a small portion of money with only one stock. (I never liked the idea that I could lose more than I have.) From there I would wait until it became about what I wanted and covered. Had some huge success shorting for awhile. Then, I was burned pretty bad and generated a nasty wash sale... I generally don't short sell these days.I'm not sure I've noticed the "head and shoulders" before, but I'll check some chart history on various stocks. Either way, I think sentiment is changing on DDD.Some other charts that come to mind are ELLI and ZLC. Those stocks plateaued and simply stopped growing awhile before they started falling. Given DDD's growth, I find that hardly likely. Of course, charts can do whatever they want. For all I know 3D systems could turn around and project their future prospects into their balance sheet, sending the stock even higher before it has a chance to go down. ?:P
Sorry, that may have sounded like nonsense... I really shouldn't be up at this hour. :P
Well stock now at 34.55
The stock split 3 for 2 yesterday...my original downthumb was with the price at $60/share pre-split. The split means my original call is around $23/share not $35/share. When I posted last month. I was calling for 40-50% downside for this immensely overbought stock. I believe that yesterday's 10% drop (not the first in the last few weeks) was an action of, "Buy the rumor, sell the news." Now that DDD has split, there is literally no fuel left for the 3D printing story short-term. I'm still short.
I understand that the fundamentals of this stock are only scaled to essentially 2/3 what they were. In essence any reason before is still valid now, but what do you mean when you say "Now that DDD has split, there is literally no fuel left for the 3D printing story short-term...?" I think that any short selling opportunity here is over. Take a look at short interest. It's indicating a turn around. Plus 3D printing is revolutionizing many sectors of the market. To expect a downside that large with such a hot, high demand product is ballsy. Since the time this pitch was originally written, DDD has had some time to grow "organically." After the split and earnings call, the ensuing sell off has already been bought up. I'm having a hard time seeing a stock with so much hype and growth potential diving to the $30/share again. What leads you to believe that it will continue to dive? It corrected significantly on September 4 and hit its turning point on September 26. The overall gain between those two dates was (26%). Since the last correction around January 24 to February 25 the gain was (35%). Comparing these two values with a projected P/E growth (including an adjusted earnings), February 25 could very well have been the latest turning point.I initially started a short sell before the bad earnings date, but after the drop, I couldn't justify DDD any lower than $31/share and bought up long the discrepancy. (Lol, the sell off was hilarious!) Long live DDD! The only reason I haven't green thumbed this stock is because I must wait seven days to cover. :PI also think I know where you're coming from. Most stocks that grow this much, usually see a whiplash, but DDD is an exception due to its high demand. What exactly are you expecting will send this price down?
I'm looking at the charts and technicals. Weekly and monthly...not daily trends. And the momentum is being drained from this stock. My prediction on 1/11 was based on weekly trends signaling the stock was significantly overbought. The pattern confirmed this week with the tremendous sell-off on the day of the split. Volume on Monday (2/25) was the 2nd highest volume EVER for DDD in the 30+ years it's traded. The volume on the rebuild this week has not been impressive when compared with the initial drop. In the monthlys...with Feb. wrapping up, I'm noticing the same overbought patterns starting to develop. In January, DDD hit it's all time high (at about $48/share post-split). February's highs are barely over $45/share...It's going to take 3-4 months for a confirmation on the pattern, but unless DDD can manage to break above $60/share in March or April, the super-bullish momentum pattern breaks, and the rally on the stock will pause.Current 200 day MA is around $29/share. March could possibly be a very telling month for DDD, but it could also just be a month where we see the trading range tighten...However, anything other than a significant & substantial break through current all-time highs in the next few months is going to be bearish for the stock. 'The Story' of 3D printing is a good one...but I believe it's 100% priced in at this point.
Wait-a-minute... don't-tell-me... you're talking about on-balance volume, right? Expecting a right shoulder, eh? Nudge, nudge... know what I mean, know what I mean... say no more?Well... maybe. Being technical is fun, but I'm also current with the news on this stock. Albeit a bit yesterday on the fundamentals. What were they again... oh ya... found my crumbled paper... I should probably crunch the numbers again... *Ahem*Cool thing is that I actually want the stock to go down even though I'm long in the real world because then I can end my pick with that annoying 5+ point limit! (If you're right, I still make money and am accurate!) :D On the other hand, though, I'm still having a hard time seeing this stock going much lower than $31/share ever again. There's too much demand, and I don't think that will be changing much this year. 3D printing is a technology akin to the invention of electricity or the assembly line. It's very easy to see this. If there's any upwards hyperbola (aka cup formation) forming here its focus will be quite high. Already programmed Excel to keep this support line hyper-actively extrapolating daily.The only way I could see investors selling large quantities of the leader of this revolution is if: A, the government steps in with taxes and regulations that screw up everything; B, 3D Systems loses its leadership status; or C, market crash. Only one of these... now that I think of it... seems likely, but is not currently happening. Do you have any news showing a decrease in the demand for this company other than technicals? Feel my drift, swing trader? The one thing I will concede is that the super bulls are on Sunday's... not 3D.https://www.google.com/finance?q=TYO%3A9899&ei=_2MwUcCdC6PdigLznAE"...I believe it's 100% priced in at this point..." too. :)
Not so much a right shoulder...I'm seeing descending triangles, and bad price action since Jan 1. The stock has moved over $40/share both in January and February, but hasn't stayed closed there for long. In January, DDD was flat, and in February DDD was negative on the month. If you bought the 1st trading day of the year, you're probably down 6-7%. Even with this tremendous rally to start the year. As far as the technicals I look to, I don't pay too much heed to OBV... I'm usually looking for contrarian indicators in MACD and some longer term oscillators, so swing trader ain't my gig. My average hold time on a trade runs from 6 weeks to 6 months usually. I give myself some time to be wrong, because I'm usually fighting momentum when I make a trade like this based on the technicals.I do look at current news but IMO... Current News = 'The Story of 3D Printing' ... which we agree, is priced into the stock. It's not about 'decreasing demand' for the companies products. It's that the company is expected to grow so fast that the stock price has outpaced it's actual growth. Now it's time for the company to show they're worth the inflated p/e. Sentiment is a hell of a variable...it's what makes the markets as emotional as they are, and can change on a dime. It's always good to be wary when you're buying a story. I think if we happen to see a 5-7% correction in the coming weeks/months, DDD is going to get thrashed harder than most, but we'll see what happens!
Fair enough. I'm willing to be proven wrong as my variables are also quite liquid. VIX spiked this morning... probably some fart heard over in DC about sequestration. Today looks interesting... indices are down, but more than half my stocks are up. Mreow...?
Ya, it's a weird day...kind of seems like if AAPL were up 2% instead of down 2% we'd be pushing those Dow highs. All of my safety plays are down, transports and spec generally up.
oh and no... got in at $31.34 on the 25th... in a good position to ride this one out.
Some are thinking these discussions in DC are worrisome. I think they're just political BS mostly.
Looks as if tomorrow will be very telling as to whether I'm right or you're right. All of variables are teetering the projected direction right now. (It seems like a flip of the coin today.) I ended my pick just in case I'm right (I can't believe it ended at 4.95 D:< ) and sold some of my shares in case you are. Depending on how I shift demand and VIX, things could teeter your direction or mine. Still iffy about it going lower than $31 short term. We will see.
My call is much longer than what happened yesterday or today or even tomorrow. I wouldn't be shocked to see this stock move back to $40/share in the next couple months, especially if the market continues it's surge higher. I'm looking at monthly & weekly charts...not day to day movements. Even if it heaves higher in the next few weeks, I think it will be very short-lived.
(>^-^)> For me, I can only live in a day's time frame. (I'm what you call a propeller-head.) The past is not much of an indicator of the future- although it relates. A day's events are most telling, in my opinion, of a stock's direction. :D(>^-^)> I would expect $42/share long term based on average analyst expectations at WSJ. Expecting $23/share in any time frame this year is a very low estimate for this company's worth unless any of the three things I mentioned earlier occur. Potential market correction has everyone in a knot, but no one on the fool has really considered the ramifications of QE1-4 (at least as far as I've seen). My support line has readjusted to show ~$28/share as the lowest price this year, and I'm including potential for one more high-ish volume spike down. The dumb money has almost sold all of their shares, paving the way for the smart investors to buy incrementally more shares as the leader of 3D becomes cheaper. Naturally, this is going to cause the price to level out and then climb up again. There is NOT currently enough negative sentiment here to see too much more of a downturn. It seems much more likely, to me, that the stock will fluctuate in upward triangles (from trader actions) following a slowly ascending support line very soon here. Either that or a very wide cup for its support.(>^-^)> What do you think? *Mreow?* (f-_-)f
By the way, SaiyanBroker = MrOneHundred. Sorry about the confusion. :)
My thoughts are get the hell out of the way if this stock drops below $30/share! Live to fight another day. The buying opp will come...but not yet!
$16 million in open market insider sales on 3/12 & 3/13 too. 500,000 shares in 2 days. That'd make me nervous if I was long.
Stock has broken under it's 200 day MA as predicted. It's now using the 200-day as resistance instead of support...Sticking with my $23/share price target for now...I think it gets there by Mid-May...If it moves downs quicker than expected on heavy volume, I may lower my PT again.
Stock price has been too jumpy here. I agree with a price target range including your $23 now. We'll see how irrational the market gets this month, though. I'm nervous about April 15.I'm wondering if the stock will enter whipsaw patterns soon or not. Do you believe the market for 3D printers is past mature growth yet? I'm having a hard time determining that.
You know, I'm not concerned with maturing growth and if the market for 3D printing is maturing...in fact I'm pretty much ignoring it altogether and simply watching price action on the stock...pretty much what I've been doing since my original call.It has performed admirably since breaking under it's 200 day, but the monthly charts are very telling IMO. It still looks to me like the bullish momentum has broken down longer-term.We're going to need to see DDD break above its previous months highs in order to start a period of consolidation that will ultimately bring it higher...but again my timeframe is pretty long out on this. I think there are better investment opportunities in growth for the next 6-9 months.
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