This 3D Printing Stock Makes an Ideal Long-Term Investment

by Sam Collins | October 29, 2013 1:37 am

Proto Labs (PRLB[1]) — This company manufactures computer numerical control (CNC) machined and injection molded custom parts for prototyping and short-run production. At the forefront of the 3D printing industry, it has a high P/E ratio, and therefore, could become very volatile.

The company earned $1.07 per share in 2012 and is projected to earn $1.43 in 2013 and $1.73 in 2014.

On Oct. 1[2], I said, “Technically, PRLB is in a powerful bull channel with a top around $80 and support at $70.50. This stock should not be chased, but in an uncertain stock market, it will almost certainly appear on the lists of savvy buyers who will bargain-hunt during a general market correction.

“A pullback to $70 could be the level to make a one-third commitment, continuing to add on further declines to its 200-day moving average at $55. Long term, PRLB could provide an enormous return.”

On Oct. 9, the stock fell to a low of $68.29, and then quickly reversed. Trade of the Day followers should now be long a one-third position.

Following the pullback, PRLB broke above its bull channel, and so it is appropriate to add another one-third to the position. A final third should be added on either a break to a new high or a pullback to the 50-day moving average at $76 as a long-term investment.

The company is scheduled to report quarterly earnings before the market opens on Thursday, Oct. 31.

10 29 13 prlb 300x196 This 3D Printing Stock Makes an Ideal Long Term Investment
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chart key 300x84 This 3D Printing Stock Makes an Ideal Long Term Investment[3]

Endnotes:
  1. PRLB: http://studio-5.financialcontent.com/investplace/quote?Symbol=PRLB
  2. On Oct. 1: http://investorplace.com/2013/10/trade-of-the-day-proto-labs-prlb/
  3. [Image]: http://investorplace.com/wp-content/uploads/2013/05/chart-key.gif

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