Bargain Hunters Getting Another Shot at DDD

3D Systems' new stock offering could result in a buying opportunity


3D Systems (DDD) — This stock has been on the Trade of the Day buy list since I recommended it on Aug. 12 under $47.50. On Feb. 21, with the stock at $80.40, I recommended placing a tight stop at $78, and it was hit the following day

Then, on April 7, at $53.42, I called the stock a “bargain hunter’s dream,” saying, “It has fallen 43% from its January high and has solid long-term support below $55.” I suggested a stop-loss order be placed at $45. Unfortunately, this stop was executed on April 29, and the stock immediately reversed up.

On Tuesday after the close, 3D announced it is offering 5.95 million shares of common stock in a public offering. The company said it intends to use the funds to finance future acquisitions and for working capital. New stock offerings dilute shares and often result in an immediate pullback. Buy DDD under $50 with a stop-loss at $43 and a trading target of $65.

S&P has a “four-star buy” on the stock with a price objective of $70. It projects operating earnings per share of $0.81 in 2014 and $1.16 in 2015, saying “annualized revenue growth of more than 30% in the next three years is achievable.”

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