I’m trying hard, real hard, to make something happen, post QE3. My biggest winners were NFLX and OSG and that is pathetic. I ended the day DOWN by 0.2%, continuing the slow grind lower over the past 3 days. Many of you will start bailing from the market soon, should this malaise continue. We might even get a one to three day flush to the downside.
But we’re going higher. As the Gods, sun and the moon and everything north from Hades is my witness, we are going–the fuck–higher.
You’re better off juggling a bag o potatoes than trying to FAZ up here. The fix is decidedly in.
33 Responses to No Market For Old Men
Re: DDD-Other than having a high P/E multiple of 61.26, presumably because it is a high growth stock, why do you suppose DDD is getting hammered lately?
just profit taking
I have started to watch this one today,may be they about to look for $$ and this is a fear of future delution … I assume they have a huge debt and no profit, could be wrong of course, but usually R&D in company like that burns through money so easy…
I don’t think so!
3D Systems (NYSE: DDD) sells printers that are used to print anything from dinosaurs to dental crowns. But can the company print money for you? On Thursday July 26, DDD reported 2Q earnings. Let’s dig in to find out.
On the surface, DDD’s results weren’t all that impressive. Revenue came in at $83.6 million (just missing the average estimate of $84.1 million) while non-GAAP eps simply met the average estimate of $0.27. Not great, right? But that’s not the whole story. A closer look shows a much better story:
•Growth is fantastic. Here are some quick numbers. Printer units were up 112%, not including the May introduction of the highly anticipated Cube printer. Printer revenue grew 61%, materials grew 60% and services grew 39%. Their relatively small healthcare business grew 87%. Professional and Production printer sales increased 138%. To add an exclamation point to those results, the company exited the quarter with a backlog of $12.3 million distributed across all of their revenue categories (a 28% sequential increase from 1Q12).
•The razor blade model is working. DDD bears may cry foul because I haven’t pointed out that production printer sales dipped 12%. But the company has been driving toward lower cost printers so this should come as no surprise. What matters is how much material these printers consume which, DDD says, is at least equal to the more expensive printers. Want proof? Recurring revenue amounted to 69% of total revenue for the quarter. Clearly, the model is working.
•Gross margins are expanding. With the improvements in the overall business, gross margins now stand at 51.4%, up from 45.7% in 2Q11. But don’t cue Kool and the Gang quite yet. Operating margins actually decreased by 240 basis points from the first quarter (but only 80 basis points comparing 1H12 to 1H11). Part of the problem is their acquisition strategy. After all, they’ve added 10 businesses in the past year and four in the second quarter alone (Bespoke, FreshFiber, Paramount, and My Robot Nation). That translates into a bunch of duplicate expenses not contributing revenue. The fact that operating margins didn’t go down further is evidence that management is serious about taking cost down relatively quickly. Operating margins will be something to watch going forward, but I can live with their current results for now.
•Guidance is better than you think. DDD maintained their wide guidance range, which may have caused the market to flinch, at least initially. Their 2012 revenue guidance is $330 million – $360 million, while they are projecting non-GAAP eps anywhere from $1.00 to $1.25. Again, not great, right? Wrong. DDD maintained their previous guidance, even though they will have added 4.1 million shares, or almost 8% of their first quarter diluted share count, from their recent secondary offering. This increase in shares, effective for about six months of 2012, essentially means that DDD has guided earnings about 4% higher.
•Acquisitions are adding value. I’m always nervous when a company decides to go on an extended spending spree. But it’s hard to argue with the company’s decisions thus far. The Vidar and ZCorp acquisitions plugged holes in DDD’s product offerings and doubled their sales channel. They have expanded into the fast-growing medical device field with Bespoke Innovations and solidified their rapid manufacturing business with Paramount Industries. Their recent acquisitions in the low end space combined with the introduction of their Cube printer, has DDD’s Cubify.com website looking like THE place to go for consumers interested in 3D printing. When (not if) the consumer segment takes off, DDD is positioned to be a major player.
So what is one to make of a report like that? Clearly, the market didn’t know. The day after earnings were released, the stock was down 11% before making it all up by the close. The following day, the market pushed the shares up to a new 52-week high. The market is conflicted. Should you be?
The business is executing well. The 3D printer business looks solid – just take a look at the quarterly results from Stratasys (NASDAQ: SSYS), DDD’s largest competitor. The future indeed looks bright, but there’s just one problem: shares are crazy expensive. As of this writing, the share price is around $39, meaning that DDD is trading at a P/E of over 66. In the last few days, it’s been as high as 68. That’s waaaay up at the top of its historical range.
But if DDD meets analysts’ expectations for 2012, the P/E would be 34.7 by the end of the year. And if they hit the 2013 average estimate, then the forward 2013 P/E would be a much more reasonable 27.7. That sounds downright cheap for this kind of growth.
My net? Few investments offer the kind of immediate growth and long-term potential of DDD. You’ll pay a price for that kind of quality growth today, but it sure looks to me like it’s worth it.
That’s a blog
I tried posting a link but it would not take so I had to cut and paste, sorry.
ZIOP nice today with nifty reverse-pivot crossover move 2% up with above average volume. Methinks the shorts got a wedgie today.
I really miss Horatio. These constant melt up months with QE are so boring.
I could Motley Fool most stocks and check back in a decade and be alright.
The gambler wants some action in this shithole!
Don’t try so hard.
From an old man perpestecive(going back to Paul Volker in the late ’70s) I have never seen a Fed Chairman actually say he is inflating stock prices and real estate on purpose.
It’s rather comical.
Sure, every one in awhile the Fed does it on the hush, hush (ala 10/19/87 crash on the following AM @11:00 or so) but to actually say it is another thing.
railways got kicked in the nuts today… wathcing
Speaking of old men;
This $SWKS must have crushed, aged, or driven a few folks into chest pain.
Russian roulette strikes again.
may I suggest a short … UVXY or TVIX can make a fun afternoon
OEW Daily Recap:
“With the recent pullback of 25 points it appears Intermediate iii, of this Major wave 3 uptrend, completed at SPX 1475. The current decline should be part of Intermediate wave iv. When it concludes Intermediate wave v should take the market to new bull market highs. Fourth waves during this uptrend have been relatively minor pullbacks, and have taken the form of a triangle; i.e. Minor 4, and the two Minute iv’s. This would suggest the OEW 1440 pivot range, (SPX 1433-1447), should support this Intermediate wave iv pullback.”
My target 1450 was hit today but OEW is looking for another 10 pts down to 1440 before the 5th wave kicks in ….
Teahouse said in earlier post “Neither the study nor the Dems tries to imply that higher taxes create growth … that absurd! Higher taxes coupled with spending cuts helps reduce the deficit … ”
Problem is higher taxes does NOT raise revenue. There is zero correlation from increased taxes and increased revenues. You can increase ability to pay down debt by raising taxes if it doesn’t raise the amount you bring in.
Also, more importantly the correlation between average tax revenues as a percentage of GDP and GDP per head growth is zero.
I think it’s funny that you seem to be against the tea party which is all about cutting spending and paying down debt which is very deflationary, but the same concept by dems through taxation is somehow encouraged. Both drastically slow the velocity of money.
*can’t* increase ability to pay down debt by raising taxes….*
p.s. sorry to “hijack” your technical analysis comment, but made more sense to talk to you on a more recent post than going several posts back. I appreciate the discussion.
Also, Fly let me know if economics discussion about taxation, GDP, revenue, etc is too off topic of individual stock picks and market commentary and I will try to keep myself in check.
Dull or calm before the storm? The 0 faithful tape. Brain dead awaiting instructions, from the dear leader. Basic bodily functions and how to deal with outcomes, which could confuse them.
speakin of Old Men, Pawlenty quit da Romney race and is taking a Wall street lobbying job. He just couldn’t wait for a cushy Ministerial appointment or Ambassadorship when Mitt becomes Potus. So, who will be next to split?
At least he is not leaving for fear of life expectancy. Ambassador is a easy come easy go job suddenly.
He’d be waiting until the next life before the Tax Evader had even a slim chance of becoming President.
President of the Cayman Islands- maybe.
You know very little of probabilities
And what constitutes legal tax loopholes, vs evasion.
Are you talking about Geithner?
Heated Debate at the Dinner Table Tonight:
Goes like this–>
Youngster: Education should be free! It’s not fair that people who can’t afford to go to the best schools can’t go. People who can are privileged and that’s not fair.
Me: So who is going to pay for this education?
Youngster: The taxpayer.
It’s good to see that socialism is alive and well with our “hard working” youth.
FYI.. I politely mention that maybe just maybe, it would be of benefit to volunteer some time to community projects and such vs. sitting around hanging with friends and asking mom for money.
Youth today is a bunch of all talk, no action blowhards.
There will be a get the vagrant off the couch into the bus off the bus into the voting booth. A full retard campaign of gov tit is gonna get nuked scare the shit out of every decrepid old fuck retarded young fuck. Even the dead will stir. So when this obvious 0 dicksuckers moment comes does the market tank?
If its not obvious to you by now, as the Tax Evading Stumblebum lurches from gaffe to gaffe – you maybe shouldn’t be posting about politics.
Trust me. The scare tactics have to happen. Your infantile understanding of the game is what it is. Politics are not for angry poor people. You will vote as told.
eat a dick, bitch.
Have to admit, FAZ is looking attractive at these levels. Shiller PE ratio for the S&P is 22.90. Well above the mean of 16.44. Reversion is unavoidable. Sell your stocks and return to discussions of the end of the world.
AAPL….just BUY it..off for soft boiled eggs and an english muffin