Founded in 2012 in Israel, the 3D printing stock Nano Dimension (NASDAQ:NNDM) currently gets significant day trader attention. NNDM stock started trading on the Nasdaq in 2016 around $70. Within a few weeks, the shares went near $100.
But since then, NNDM stock has plunged to hit 50 cents in late March 2020. Yet, in late January 2021, it saw a 52-week high of $17.89. Now, NNDM stock shares hover around $8.50 and the market capitalization (cap) is just over $2 billion.
Recent sectoral metrics suggest, “The worldwide market for 3D printing products and services is anticipated to exceed 40 billion U.S. dollars by 2024. The industry is expected to grow at a compound annual growth rate of 26.4 percent between 2020 and 2024.”
So, given the growth potential of the industry — as well as the interest in the shares — investors wonder if now could be a good time to enter NNDM stock.
With a beta of 2.45, the shares are highly volatile as momentum day traders ride the waves in price. If an investor’s objectives permit, I believe that a potentially high-growth company like NNDM should be bought for the long-term. Any potential decline toward the $6 level or below would offer a better margin of safety.
NNDM Stock and the 3D Printing Revolution
3D printing is increasingly playing a crucial role in a range of industries. This includes ones like aerospace, architecture, automotive, consumer goods, education, electronics, construction, energy, health care, hearing aid, dental, military and robotics among others.
For instance, recent research led by Alejandro H. Espera Jr. of Case Western Reserve University highlights, “additive manufacturing (AM) technologies or more popularly called 3D-printing, has paved the way in new areas of electronics fabrication. 3D-printing technologies … are potentially transformative in flexible electronics, wireless communications, efficient batteries, solid-state display technologies, etc.”
Nano Dimension focuses on multilayer printed circuit boards (PCBs) as well as complementary products, such as nanotechnology-based inks. Its flagship printer is the DragonFly, used in the 3D printing of electronic circuitry. The company regards its technology as disruptive.
Part of the recent decline in the share price can be attributed to the fact that Nano Dimension has conducted several direct offerings, raising working capital. So if you are considering in investing in NNDM stock, you might wait for the next earnings statement. Given the volatility in broader markets, the shares could still come under pressure and need more time to stabilize.
Should You Buy A Sectoral ETF Instead?
Many investors who are interested in the growth of the 3D printing sector might not necessarily feel comfortable with the volatility that comes with investing in a small cap stock like NNDM stock. They could instead be interested in an exchange-traded fund that holds Nano Dimension shares.
They include the ARK Autonomous Technology & Robotics ETF (BATS:ARKQ), the ARK Next Generation Internet ETF (NYSEARCA:ARKW), the ARK Israel Innovative Technology ETF (BATS:IZRL), the Direxion Moonshot Innovators ETF (NYSEARCA:MOON), SPDR S&P International Small Cap ETF (NYSEARCA:GWX) and the SPDR S&P Kensho New Economies Composite ETF (NYSEARCA:KOMP)
Alternatively, you might buy a sectoral fund, such as The 3D Printing ETF (BATS:PRNT) that invests in firms involved in the 3D printing industry worldwide. PRNT, which currently has 49 holdings, started trading in July 2016. The top 10 stocks comprise net asset of $132 million. ExOne (NASDAQ:XONE), Microsoft (NASDAQ:MSFT), HP (NYSE:HPQ), Straumann (OTCMKTS:SAUHY), and Dassault Systemes (OTCMKTS:DASTY) are among the leading names in the roster.
Year-to-date, the fund is up 27.7%, and over the past 52 weeks, it has returned 156%. PRNT hit a record high of $50.37 in early February. In the case of profit-taking during the earnings season, the fund is likely to find support between $35 and $37.5.
So, do you believe that 3D printing could revolutionize manufacturing in the new decade? If so, you might want to add either NNDM stock or an ETF in your long-term portfolio.
On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.