Why This Expert Thinks There's 'More Pain Ahead' For 3D Printing Stocks
The 3D printing industry might be in for a world of hurt.
"The industry is growing fast," said Anderson. "As far as I know, it's still growing between 20 and 30 percent compound annual growth rate. These companies are all expanding their revenue. They're all growing revenue."
Unfortunately, they're also trying to do a number of acquisitions.
"[M&As] dilute shares and it's costing them money in the short run and they're paying the price for it now," Anderson added. "I think maybe by the end of this year, or sometime in 2016, we'll see a turnaround. But I think there's probably more pain ahead."
Anderson said that 3D printing stocks are "still expensive," adding that there's only one he would buy right now: ARCAM AB ORD (OTC: AMAVF).
"It's the only one with solid growth," he said. "3D Systems, maybe. I'm waiting to hear. But I wouldn't touch Stratasys."
Arcam AB, which is in the high-value titanium area for the aerospace industry, will report its December quarter results on Thursday.
"They should report record Q4 revenue and record 2014 revenue," said Anderson. "Earnings should be a record as well just based on the number of machines they sold. It doesn't take rocket science to figure out they're going to report a record quarter."
Anderson said that he is "very selective" about the stocks he chooses.
"I'm bullish with Arcam AB," he added. "I'm in a wait-and-see mode on 3D Systems. I wouldn't touch Voxeljet or ExOne."
"As far as the equipment manufacturers, the only OEM -- the only one I would buy personally -- is Arcam," Anderson concluded.
Sticking It Out
Finally, Anderson had some advice for those who wonder if they should wait for a turnaround.
"I think if your investment horizon is beyond 12 months, you can hold," he said. "If it's less than that you might consider selling now and looking for a lower entry."
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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