Will HP Acquire 3D Printing Stocks Like DDD or Proto Labs?

Advertisement

Hewlett-Packard Company (HPQ) announced a few weeks ago that it will split into two separate companies — a consumer-focused HP Inc. that will produce PCs and printers, and a business services outfit Hewlett-Packard Enterprises.

hpq stock buyback emc mergerThe idea of separating a slowing computer business from the enterprise arm of Hewlett-Packard Company has long been talked about since we entered a “post-PC” age. When HP effectively gave up on mobile by mothballing its webOSefforts and then hunkered down for a multiyear restructuring under CEO Meg Whitman, Hewlett-Packard investors had good reason to start pounding the table for change in any form — including a spinoff.

Now that the news is out, however, there is plenty to consider regarding HP Inc. and Hewlett-Packard Enterprise. There isn’t even a firm date for the separation yet, or new stock tickers for investors to consider.

But that hasn’t stopped HPQ stock from pushing ahead with ambitious plans to rethink things — including a recent launch event that indicates the operations of HP Inc. could be moving into the 3D printing space very soon.

3D Printing Stocks and HP Inc.

According to a report in the International Business Times, a trendy Manhattan launch event this week featured Hewlett-Packard execs playing with its Multi-Fusion 3D printer and Sprout 3D workstation — products that will “bring 3D printing into mainstream use in applications ranging from industrial design to automotive manufacturing,” according to IBTimes.

Speculation about Hewlett-Packard 3D printing has swirled for some time, particularly in 2013 as 3D printing stocks including 3D Systems Corporation (DDD), Stratasys, Ltd. (SSYS), VoxelJet AG (VJET) and Proto Labs Inc (PRLB) were going like gangbusters.

In fact, there was some speculation about 3D printing stocks being acquired by Hewlett-Packard in a move to achieve growth instead of just stability by cost-cutting.

So, are those rumors about to heat up again given the public push into 3D printing by HPQ?

Maybe. According to the IBTimes:

“The Multi-Jet Fusion will enter beta testing next year and become commercially available in 2016. HP did not reveal pricing details, but execs said it will carry a price that will make it a practical option for a number of business and industrial applications.”

In other words, we are a long way from Hewlett-Packard Corporation having its own viable line of products … so it might make sense to partner with an existing company to achieve scale.

What’s Next for 3D Printing Stocks and HPQ?

Sadly for 3D printing stocks including VoxelJet and DDD, 2014 has been a very harsh environment. After big gains last year these picks are both off more than 60% since Jan. 1.

SSYS and Proto Labs stock are both down moderately year-to-date, as well.

Given the rollback in shares, there could be a greater likelihood of an acquisition — either by HP or by any other company that could be interested in the budding 3D-printing marketplace, including automation giant Siemens AG (SIEGY) or computer design giant AutoDesk, Inc. (ADSK).

Of course, if a company like HP can build a home-grown solution it could be much cheaper… and could be very bad news for 3D printing stocks facing a new and entrenched competitor.

And remember, revenue at DDD stock or Proto Labs are minuscule — running about $500 million or so in annual sales apiece. That’s a drop in the bucket for major corporations that do billions in a single quarter. So whether HP makes its own 3D printing arm or acquires one of these 3D printing stocks … the results will not be moving the needle anytime soon.

Long story short: Stories about acquisitions and big-time sales potential are great marketing fodder for 3D printing stocks, but there’s not a lot of substance here.

Investors in HPQ stock should focus on the very complicated breakup of this company into two different businesses.

And investors in 3D printing stocks like DDD need to remember that rumor and sentiment rules the day more than reality. If acquisition talk lifts these players in the short term, enjoy it … but be realistic about the fact that momentum can move fast in the other direction, too.

Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP


Article printed from InvestorPlace Media, https://investorplace.com/2014/10/hewlett-packard-company-hpq-hp-inc/.

©2024 InvestorPlace Media, LLC