Citron says DDD (3D Systems) is a bubble

update: May 9th , 2013 : if you trade options look how Rob ( @stockdarts ) a contributor to our Stockguy22 Bull and Bear weekly newsletter doubled his money on a DDD earnings option play : GREAT JOB Rob –great strategy and recap here: http://stockguy22.com/2013/05/08/doubled-money-ddd-earnings/

I’ve ( Stockguy22) also done fantastic on trading DDD and SSYS recently :

as of May 3rd I locked up profits on 1/2 of DDD and SSYS for 36.07% and 14.04% avg returns . I plan to add back the portions I sold on any summer dips but plan to keep some longer term as I like this sector as you can see from my detailed report below:

also check my detailed analysis on the 3D Printing sector here : http://stockguy22.com/2013/04/23/3d-printing-stocks/

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Thoughts

Citron released a brief report calling DDD a bubble; so here are some thoughts. The report is linked at the bottom of the article.

Is DDD a bubble?  Well it’s certain that 3D printing is getting a lot of press lately.  That’s never a good thing when grandma is talking about 3D printing.

Ask yourself are you or anyone you know buying a 3D printer?  Do you own a business and can you use a 3D printer?

Would you pay up for one when there are so many available in a variety of price ranges?

Did you know a 3D printer can be purchased for $500 right now?

One thing I can guarantee; products become commodities just like inkjet printers did 10 years ago, just like AAPL devices are currently doing, and when that happens margins evaporate and only a few are left in business.

To succeed, DDD needs to make it ‘sexy’ with both hardware and software; or else the plastic 3D printing business is not going to print real money.

DDD has earnings coming up, so the proof will be in the balance sheet.

 

Consumers and a ‘Shop’ for plans and products

“Cubify primarily offers two services. First, it gives anyone access to 3D Systems’ vast array of printing technologies via its Cloud Print 3D service. Designers upload plans to Cubify, and customers then go through the Cloud Print 3D section on Cubify to pay for 3D Systems to print and ship out an object made from those plans.”

“Cubify also lets designers sell their plans as standalone files. If you have your own 3D printer, you can pay to download those files and then print the object out yourself. This portion of Cubify competes more or less directly with MakerBot’s similar Thingiverse. The wiggle room in their competition comes from the fact that you can download a file from Cubify to print out on a MakerBot printer thanks to their common file format support.”

DDD – http://cubify.com/

Makerbot – http://www.thingiverse.com/

“Because Cubify is a retail site, 3D Systems also has a few more business concerns than MakerBot’s open-source-driven Thingiverse. Kulkarni says that 3D Systems gets 30 percent of an object plan’s selling price, the seller gets 60 percent, and the remaining 10 percent goes to taxes and other fees. That structure mimics Apple’s percentages for its App Store, but they also provide a basis for a competitor to undercut them.”

 

On the consumer retail side, there is a lot of competition and there are even more websites dedicated to selling 3D printed items. I think I can safely say that there is a point where either this will make a huge impression on the world; or sputter and remain a hobbyist market.

Markerbot hopes this explodes onto the consumer market and doesn’t remain a hobby.

http://news.cnet.com/8301-17938_105-57368277-1/who-will-get-the-biggest-slice-of-3d-printed-pie/

 Opensource 3D printers

http://reprap.org/wiki/RepRap

 

Other Stores and Sites

http://www.shapeways.com/

http://www.sculpteo.com/en/

http://i.materialise.com/

http://3dexport.com/

 

Software  

Competition is fierce in this area with both free and pay software.

 

Blender –  http://www.blender.org/

Replicat – http://replicat.org/

ADSK – http://usa.autodesk.com/digital-prototyping/

DDD – http://www.3dsystems.com/3d-cad-software

 

Rep-Rap

There are plenty of rep-rap types available and you can build one for rather cheap. This is an interesting thing as more and more publicity is given to this sector.

Other Sector Stocks

 XONE SSYS ADSK ONVO

 

 

Some insider selling, so again we will see what the markets hold.

DDD Insider Summary

Type Last 3 Mo. Last 12 Mo.
Number of Insider Trades 16 90
Number of Buys 8 17
Number of Sells 8 73
Net Activity 216,600 (1,083,075)
Total Shares Traded: 279,000 1,636,951
Number of Shares Bought: 247,800 276,938
Number of Shares Sold: 31,200 1,360,013

237 Institutional Holders
36,726,197 Total Shares Held

 

Owner Name Date Shared Held Change (Shares) Change(%) Value(in 1,000s)
PRICE T ROWE ASSOCIATES INC /MD/ 09/30/2012 6,336,250 (106,700) (1.66) 415,721
VANGUARD GROUP INC 12/31/2012 2,969,922 105,636 3.69 194,857
VILLERE ST DENIS J & CO /ADV 12/31/2012 2,782,788 (321,135) (10.35) 182,579
DF DENT & CO INC 12/31/2012 2,112,710 (58,096) (2.68) 138,615
BLACKROCK FUND ADVISORS 12/31/2012 2,106,302 (74,636) (3.42) 138,194
CLARK ESTATES INC/NY 12/31/2012 1,553,339 (1,175) (0.08) 101,915
BARCLAYS GLOBAL INVESTORS UK HOLDINGS LTD 12/31/2012 1,295,853 (34,755) (2.61) 85,021
STATE STREET CORP 12/31/2012 1,047,864 48,749 4.88 68,750
INVESTMENT MANAGEMENT OF VIRGINIA LLC 12/31/2012 1,026,034 (144,775) (12.37) 67,318
LORD, ABBETT & CO. LLC 09/30/2012 908,769 908,769 New 59,624
TIGER GLOBAL MANAGEMENT LLC 09/30/2012 900,000 900,000 New 59,049
DIMENSIONAL FUND ADVISORS LP 09/30/2012 831,859 831,859 New 54,578
NORTHERN TRUST CORP 12/31/2012 748,772 23,277 3.21 49,127
OPPENHEIMER FUNDS INC 09/30/2012 700,000 200,000 40 45,927
RIVERBRIDGE PARTNERS LLC 09/30/2012 591,869 (29,634) (4.77) 38,833

Read more: http://www.nasdaq.com/symbol/ddd/institutional-holdings#ixzz2KuC0JK45

 

 

Private Companies

http://www.makerbot.com/

This competitor is turning up the heat for retail/consumer sales of 3D printers.  While they charge a premium compared to many; it’s all about marketing.

 

 

Company Information:

3D Systems Corporation, through its subsidiaries, engages in the design, development, manufacture, marketing, and servicing of 3D printers and related products, print materials, and services. The company’s principle print engines comprise stereolithography, selective laser sintering, multi-jet modeling, film transfer imaging, selective laser melting, and plastic jet printers. Its 3D printers convert data input from computer-aided design software or 3D scanning and sculpting devices to produce physical objects from engineered plastic, metal, and composite print materials. The company also blends, markets, sells, and distributes various consumables, engineered plastics, metal materials, and composites; and offers various software tools, as well as pre-sale and post-sale services, including applications development, installation, warranty, and maintenance. In addition, it provides custom parts services, such as precision plastic and metal parts service and assembly capabilities. The company markets its stereolithography materials under the Accura and RenShape; laser sintering materials under the DuraForm, CastForm, and LaserForm; and materials for professional printers under the VisiJet brands. It primarily serves manufacturers of automotive, aerospace, computer, electronic, defense, education, consumer, energy and healthcare products, as well as original equipment manufacturers, government agencies, universities, and independent service bureaus. The company sells its products and services through its direct sales organization, sales agents, resellers, and distributors primarily in the United States, Europe, and the Asia-Pacific region. 3D Systems Corporation was founded in 1986 and is headquartered in Rock Hill, South Carolina.

 

Citron says DDD is a bubble, report is below.

Citron Report: DDD-final 

 

 

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