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Stratasys: High Risk but Still a Good Buy

My proprietary internal indicator just signaled "buy"


Stratasys (SSYS) — This maker of three-dimensional printers and 3D production systems for office-based rapid prototyping has only one main competitor, 3D Systems (DDD). I’ve recommended both stocks several times, but on Jan. 22, Credit Suisse (CS) downgraded DDD from “outperform” to “neutral” and upgraded SSYS to “outperform” from “neutral.”

The analysts said that the reason for the change was that DDD’s market price was currently at a “premium” to SSYS despite the fact that the latter had “the leadership position in 3D printing, especially after its acquisition of MakerBot.”

On March 24, a JPMorgan Chase (JPM) analyst upgraded SSYS to “overweight” from “neutral” with a price objective of $125. S&P has a 12-month target of $148.

On Nov. 20, with the stock near at $120, I pegged its trading target as $130, and it achieved a high of $138 in early January. But since my most recent recommendation on Jan. 24, the stock has fizzled.

Now, however, my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), has tagged SSYS as a trading buy. The stock has fallen almost 25% from its January high, and even at this price is high risk. Yet, for those who would like to have a position in the future growth of 3D printing, SSYS is likely at a price that is attractive for both traders and long-term investors. My trading objective is $118.
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