Is it time to buy into the 3D printing hype? Last week, at CNBC's Mad Money show investment guru Jim Cramer put two industry leaders: 3D Systems (DDD) and Stratasys (SSYS) to the test to find which one would be a better investment. Recently Cramer has been getting a lot of questions about 3D printing: is 3D printing for real? And so, what's best way to play?
"First of all, 3D printing is not some fad, it's a real technology that's here to stay," said Cramer. "I bet in a decade, as these devices become cheaper, we'll start seeing them all over the place."
"At this point, I think both companies can do well, but as far as the stocks go, Stratasys would be the one to own," said Cramer. Cramer thinks 3D Systems (DDD) is too expensive at these levels, and Stratasys (SSYS) presents a better buying opportunity than DDD. The reason is pretty obvious. At the beginning of December, SSYS merged with Objet to form the biggest 3D printer manufacturer in the world. "Objet has the leading technology, the best margins, and the fastest growth in the industry, with a pristine balance sheet," Cramer explained. Because of the merger, SSYS will have over 260 resellers and selling agents around the world. And SSYS is expected to generate between $7m and $8m of annual cost savings after the merger.
Cramer thinks the new Objet 1000 which is priced at $600,000, "should give a big boost to the company's growth rate, as well as its margins." Objet 1000 enlarges Objet's products scope, however it is difficult to image how much it can contribute to the growth rate of company's revenue. $600,000 is a big investment during the crisis period for many companies.
What is the bottom line? Cramer reminded investors it is better "to wait for a pullback before you start buying SSYS, and please, please use limit orders."
You can watch the "Cramer: 3-D Printing, 2 Stocks, 1 Play" video here: http://www.cnbc.com/id/100316758
Posted in 3D Printing Technology
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