Crank out a gold and silver medal, 3D Systems Corporation (NYSE:DDD), Stratasys, Ltd. (NASDAQ:SSYS), ExOne Co (NASDAQ:XONE), or ARCAM AB ORD (OTCMKTS:AMAVF) They go to the Germans and a Swiss/German team, respectively, for developing 3-D printing industry indices.
I figured it was only a matter of time before 3-D printing indices were developed and marketed, given 3-D printing is expanding beyond a techie topic and entering the mainstream consciousness.
Structured Solutions launched Solactive 3D Printing Index in March, and launched STOXX Global 3D Printing Tradable Indexin April. These companies license indices to financial institutions for use with exchange-traded funds and other investment vehicles. There aren’t any investments based on these indices yet, to my knowledge.
Solactive 3D Printing Index (SOLDDD)
The index was launched with seven holdings, all of which are equally weighted.
I. Holdings
| Company | Market Cap | Country |
|---|---|---|
| 1. 3D Systems (NYSE:DDD) | $4.4 B | US |
| 2. Stratasys, Ltd. (NASDAQ:SSYS) | $3.3 B | US |
| 3. ExOne | $684 M | US |
| 4. Arcam | $192 M | Sweden |
| 5. Proto Labs | $1.6 B | US |
| 6. Autodesk | $7.9 B | US |
| 7. Cimatron | $57 M | Israel |
Let’s key in on the three largest printer manufacturers:
| Company | Trailing P/E | Fwd P/E | 5-Yr PEG | 3-Yr Avg Rev Growth | 3-Yr Avg EPS Growth | Net Margin (ttm) | ROE (ttm) | Debt/Equity (mrq) |
|---|---|---|---|---|---|---|---|---|
| 3D Systems | 107 | 36.8 | 2.7 | 46.3 | 249 | 10.2 | 9.7 | 0.10 |
| Stratasys, Ltd. (NASDAQ:SSYS) | N/A | 35.0 | 1.4 | 29.8 | 21.6 | (4.3) | (1.3) | 0 |
| ExOne | N/A | 91.9 | N/A | N/A | N/A | (31.1) | N/A | 0.06 |
Data to June 18. All figures percentages, except PEs, PEGs, and D/E.
3D Systems Corporation (NYSE:DDD) has the most diverse offerings, and continues to gobble up small companies. Just last week it bought Phenix Systems, a manufacturer of Direct Metal Selective Laser Sintering 3-D printers. Its product line is heavy with plastics 3-D printers, so this should be a good complement.
3D Systems Corporation (NYSE:DDD) is the only one of the three that’s current profitable on a GAAP basis.
Estimated EPS growth next year and the next 5 years is 24% and 16.5%, respectively. With a 107 trailing P/E and 2.7 5-year PEG, the stock is pricey. Keep in mind the forward P/E and PEG are based on estimates, and that the company has exceeded past estimates. If it does so going forward, that 5-year PEG of 2.7 will be overstated.
Stratasys, Ltd. (NASDAQ:SSYS) is more heavily focused on commercial printers, though also has consumer offerings. It merged with Israel-based Objet in late 2012.
Estimated EPS growth next year and the next 5 years is 29% and 30.5%, respectively. Stratasys’ 5-year PEG indicates it’s relatively reasonable priced.
ExOne Co (NASDAQ:XONE) — which went public in February — focuses on high-end ($500,000+) industrial use systems. The stock price has skyrocketed 94% since the IPO, as some view its pure play on industrials (auto, aerospace, etc.) very positively. The company is expected to become profitable next year with a $0.56 EPS. The stock is certainly pricey, though the standout potential exist. Analysts have yet to project earnings going out five years, so there’s no 5-year PEG.
As to the others, ARCAM AB ORD (OTCMKTS:AMAVF) specializes in high-end industrial use metal 3-D printers. It can be bought OTC in the U.S. It’s very thinly traded. Thinly-traded stocks can be very volatile and easily manipulated. Proto Labs is a service provider, producing protoypes and parts for others. Meanwhile, both Autodesk and Cimatron make design software for 3-D printing and other uses.
