Stratasys: High Risk but Still a Good Buy

by Sam Collins | March 28, 2014 1:06 am

Stratasys (SSYS[1]) — This maker of three-dimensional printers and 3D production systems for office-based rapid prototyping has only one main competitor, 3D Systems (DDD[2]). I’ve recommended both stocks several times, but on Jan. 22, Credit Suisse (CS[3]) 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[4]) 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[5], 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[6], 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.
SSYS Chart
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Chart Key[7]

  1. SSYS:
  2. DDD:
  3. CS:
  4. JPM:
  5. On Nov. 20:
  6. on Jan. 24:
  7. [Image]:

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