3-D Printing Stocks: The 6 Most Notable Events of 2013
If you're following the 3-D printing space, you might know that 2013 was the year that 3-D printing moved beyond a techie and Wall Street topic to capture the attention and investing dollars of those on Main Street. As 2013 nears a close, let's look back at the year's six most notable 3-D printing events.
A year-in-review article wouldn't be complete without stock price performances, so first a look at the year-to-date returns of the pure plays: Arcam , 437%; 3D Systems , 155%; ExOne , 137%; and Stratasys , 61%. Voxeljet , which went public in October, is up 32% from its closing price on its IPO day.
The six most notable 3-D printing events of 2013
We need to set the stage, as two important events occurred in late 2012.
First, Stratasys merged with Objet in December. This marked the largest tie-up to date in the industry, and gave the combined entity a market cap of about $3 billion, roughly the same as 3D Systems'. Since then, however, 3D Systems' market cap has grown considerably faster than Stratasys', with the former's now at $9.3 billion and the latter's at $6.3 billion.
The second notable event was industrial behemoth General Electric buying Morris Technologies, which gave it a full-scale 3-D production facility near its aviation division's Ohio headquarters. GE is now the world's largest user of 3-D printing technologies in metals. Given its might and voracious appetite for 3-D printers, which it plans to use to print fuel nozzles for its new Leap jet engine, GE's actions should significantly shape the 3-D printing space going forward.
1. ExOne goes public - February
ExOne, which makes high-end 3-D printers for the industrial market and operates service centers that produce parts to customers' specifications, went public in February. Its stock was priced at $18, opened at $23.66, and closed at $26.52 a share, making it one hot IPO.
Some investors likely considered ExOne's pure play on high-end ($500,000 and up) printers targeted to automakers and other industrial companies an attractive niche. However, there's little doubt that the lion's share of the enthusiasm for the company's IPO can be attributed to investors' hunger for anything "3-D printing." At that time, 3D Systems and Stratasys, whose stock prices had both soared over the year, were the only two 3-D printing companies trading on major U.S. stock exchanges.
2. Arcam gets "discovered" - first half of 2013
Sweden-based Arcam makes printers that use electron bean melting, or EBM, technology, and targets customers in the aerospace and medical implant industries. Its systems print solely in metals.
While Arcam has been a public company for a while, it was a virtual unknown among U.S. investors until 2013. That's because it was very tiny - it's still relatively small, with a market cap of $607 million - and its stock is listed on the Nasdaq OMX Stockholm. It can, however, be bought over the counter in the United States.
Arcam was slowly "discovered" throughout early 2013, and was fairly well-known by July, after releasing its first-half financial results. Investors piled in as they learned of the company, driving the stock's valuation from considerably undervalued to fairly valued, on a relative (to industry peers) basis.
3. 3D Systems buys Phenix Systems - announced in June
While Phenix Systems was a small acquisition for serial-acquirer 3D Systems, it was notable because it provided 3-D Systems with its first metals printing capabilities. Phenix makes direct metal laser sintering, or DMLS, systems that can print in metals and ceramics.
With General Electric and other industrial companies embracing 3-D printing for actual production, rather than just prototyping, there's an increasing demand for metal printers. In fact, GE is now testing DMLS systems from 3D Systems to see whether 3D will be part of GE's capacity ramp-up.
4. Stratasys acquires MakerBot - announced in June
Stratasys' $403 million acquisition of MakerBot, which produces the popular Replicator printers for consumers, was a good - and necessary - move.
Stratasys has historically focused on the professional and commercial markets, while 3D Systems has had a broader lineup, including less pricey consumer models. MakerBot's Replicator2 allows Stratasys to compete with 3D Systems' CubeX in the $2,500 price range.
5. Voxeljet soars onto the public markets - October
The temperature in the 3-D printing space rose all year, so it was hardly a surprise when Germany-based voxeljet soared onto the public markets. Its stock was priced at $13, opened at $20, and closed at $28.83 - a nearly 122% gain.
Voxeljet provides high-speed, large-format, 3-D printers and on-demand parts production services to industrial and commercial customers. Its machines can print in sands (which customers use to cast metal components) and plastics. ExOne is its competitor in the sand castings space, while 3D Systems and Stratasys are its publicly traded competitors on the plastics end.
6. 3D Systems teams with Google's Motorola unit in Project Ara - November
Given Google's deep pockets and tech brains, its teaming with 3D Systems for Project Ara has to be considered a big win for 3D Systems.
The goal of Project Ara is to create a large-scale 3-D printing manufacturing platform capable of producing customizable open-source modular smartphones. This mission entails integrating the 3-D printing of various types of materials into the platform - including conductive materials to produce electronic circuitry, a capability 3D Systems doesn't yet possess.
Project Ara is an indication that the transitioning of 3-D printing from a technology used to produce prototypes and small-run production batches to one used in both large-scale manufacturing and "micro-manufacturing" has begun in earnest.
Foolish final thoughts
3-D printing is a disruptive technology, with the industry projected to grow 20%-30% annually for the next five years. So, I think it's safe to say that 2014 should be another good year for the industry as a whole - as long as the overall market cooperates. That said, I don't think investors should expect to see the returns they saw in 2013 repeated, and there could well be losers among the winners.
Going into 2014, investors should keep their eyes on these things: 3D Systems' success with its metals printers; 3D Systems' progress with Project Ara; Stratasys' results with its MakerBot lineup; and GE's plans for its 3-D printing capacity ramp-up.
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The article 3-D Printing Stocks: The 6 Most Notable Events of 2013 originally appeared on Fool.com.Fool contributor Beth McKenna has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, ExOne, and Stratasys. The Motley Fool owns shares of 3D Systems, ExOne, General Electric Company, and Stratasys and has the following options: short January 2014 $20 puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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