It’s 2021 and the next, next big thing in investing is here. But sometimes and as the following three 3D stocks are indicating, a look in the rearview mirror can offer an investment opportunity certain to motor past today’s more obvious and prone to injury thrill rides.
Let me explain.
Direct listings, blank check or special purpose acquisition companies, also referred to as SPACs, are everywhere these days. EV stocks such as Blink Charging (NASDAQ:BLNK) or QuantumScape (NYSE:QS), which have used this route to go public, have been one of the hottest investments on Wall Street.
Hold on a minute, this is about 3D stocks, right? It is. It’s also importantly about historical perspective and next chapters.
If investors respect history repeating or rhyming, it will get ugly for today’s EV investors. The dot-com bust and cryptocurrency bubble are two high profile incidents of the “next, next big thing” going terribly and treacherously wrong.
But after the painful and drawn-out capitulations, more recent chapters have ushered in storied performances like Amazon (NASDAQ:AMZN) and bitcoin as more meaningful market acceptance and useful applications emerged.
Today and in 2021 investors may want to add 3D stocks as an area worthy of an emerging next chapter following the group’s 2012 – 2013 bubble, crash and multi-year era of regret. Now let’s look at what’s happening off and on the price chart of three leading 3D stocks and offer strategically-aligned positions for a new Roaring Twenties to begin unfolding.
3D Stocks to Buy: 3D Systems (DDD)
Favored Strategy: Modified March collar ($27/$20 put spread:$40 call)
The first of our 3D stocks to buy are shares of 3D Systems. What’s been a roaring good start to 2021 for the group appears to have been triggered by surprise bullish news from DDD stock.
The company announced the sale of some non-core businesses enabling it to pay off its debt obligations. The move also allowed DDD to terminate its at-the-market equity program earlier than planned.
Investors also welcomed news of a preannounced revenue beat with open wallets. And at a recent Needham growth conference, 3D System’s CEO told attendees growth rates for additive manufacturing could climb as much as 24% this year.
In total the updates from this 3D stock initially sent shares rocketing more than 100% in a single session. And follow-through this week now has DDD posting a year-to-date gain of around 170%.
It may sound like investors have already missed the boat on this 3D stock. But key congestion has been cleared on the monthly price chart. That’s important. As well and considering this smallish mid-cap remains an industry force, enjoys a vastly improved balance sheet, offers a promising sales outlook and has spent more than sufficient time in technical lockdown, the bull in DDD looks like it has staying power in 2021 and beyond.
Favored Strategy: March $35 call into bull call spread
Stratasys is the next of our 3D stocks to buy. Shares of SSYS are another market heavyweight despite its deceiving and even punier small-cap valuation of $1.75 billion. Similarly, the stock witnessed overly optimistic cheers turn into bitter jeers over the past several years.
Technically, those days appear to be finally over.
After sympathetically riding DDD’s thunder the past week, Stratasys stock is up 55% in 2021. Shares of this 3D stock are also now in position to forge a massive breakout through lateral congestion formed over the past five years.
Proto Labs (PRLB)
Favored Strategy: March $200/$230 bull call spread
Proto Labs is the last of our 3D stocks to buy. Of the three, PRLB is the least notorious among investors. And for good reason. Unlike DDD and SSYS which are still 70% or more from their all-time-highs, Proto Labs market cap has ballooned since the group’s bubble days and the era’s subsequent technical gutting.
That’s not all Proto Labs has to offer, though.
PRLB is also valued above its one-time, much larger peers. But this 3D stock’s still fairly modest $4.6 billion market price tag is a direct result of demonstrated business strength and profitability during the worst of times. Now with shares offering a “third time’s the charm” breakout from PRLB’s monthly cup base supported by a bullish momentum signal from stochastics — this 3D stock is ready to show its investors even more green in 2021.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.