3D, It's Not You, It's Me
Kyle is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
I hate it when people say, “I told you so.” I have yet to conduct a scientific study, the likes of which placed CNN and USA Today securely on the polling platform, but I’m almost certain even the people that utter those words hate hearing them, as well. I presented a stock on three different occasions, probably posted well before they were actually syndicated by my esteemed editors, but I digress.
3D Systems Corp. (NYSE: DDD), mentioned February 9th “Got 401K? Part III – in 3D,” February 28th “IBM’s Graphene Chips to Offer Tasty Rewards?” and March 7th “Market Turmoil? Why Buying Into it Could Make Sense” could have afforded prospective pursuers of homework 115%, 80%, and 95% returns, respectively. To be quite honest, during the lazy summer of market performance, I feel somewhat compelled to blow my own horn, which I rarely do (all I have to do is look back at my first crush, Ford, which stinks out loud). With 3D, I didn’t scale in until April, and my performance is nowhere near as excellent, but something tells me it’s time to move on, thank you.
Much like with my joyous journey with Westport Innovations (NASDAQ: WPRT), the run definitely feels tired, and it’s time to exit the position. In case two or three of you who follow me on Twitter (@kem312) and actually pay attention to every single one of my market movements, I scaled into Westport and scaled out, the last with “house money” still at a 70% gain. Since that time, the stock has stumbled a little (roughly three bucks per share), but I still like it, just not yet. The time will come, most likely after the forecasted “September Swoon” and this presidential election we keep hearing about (my vote is with Gary Johnson). And there’s a saying that is mightily pertinent in our investing era, “Nobody gets hurt taking a profit.”
I can’t tell you what to do, nor will I ever; that much you can take to the bank (preferably Wells Fargo – no position). But when something crosses my trading table, it’s definitely worthy of some consideration, should I choose to mention it, of that you can be assured. T. Rowe Price recently devoted a measurable amount of cheddar with 3D Systems. For anyone that has any sort of interest that should be the signal to move on and see what happens from this point forward.
The wonderful wizards of Wall Street don’t end there. The glorious Gartner letter revealed that 3D “printing” was at the tippy top of the “Hype Cycle.” Now as much as I relish being a contrarian to such mystical prognostication, the two events cancel each other out rather nicely, and given all the “growth slowing” and Congressional vacation antics despite the fiscal cliff, I think we can comfortably move on. And what better time to bank what has been working for us, right? It’s a lot like when those of us who actually dated girls in high school, and all your “friends” took notice of who we dated, it was time to dump her and move on, or else lose everything (class ring, pride, letter jacket).
If (and that’s an enormous “if”), the market behaves like a hormonal teenager next month, as it did in similar fashion last year, we are all looking at substantial “losses” (not like John Paulson’s -35%, but still). 3D Systems’ price-to-earnings ratio has exploded (76.25), enough to thank the SEC for not taking a USADA stance as they did with Lance Armstrong and strip us of our accomplishments. Conversely, if the Federal Reserve actually pulls QE3 from their quiver and assaults future growth with continued can kicking, it’s sure to go higher; either way, we’re still booking profits.
There are so few companies we can actually buy and hold forever; neither of these two falls into that category. We aren’t talking about Apple or IBM here, and I’m not so sure we can rest easy thinking they will be either, considering their current share prices. Westport is only up 5% year-to-date, falling in line with partner Cummins after their stock swan song following disappointing earnings (oversold, back in line, called that one, too, by the way – “Cummins Good News/Bad News”). The market will tell you how to move, just make sure you are listening. So it is with a heavy heart that I intend to break it off with 3D. It has been a delightful run, but she has captured the longing eyes of far too many suitors. Perhaps I’ll be there again, on the rebound.
kmet312 owns shares of Westport Innovations. The Motley Fool owns shares of 3D Systems and Westport Innovations and has the following options: short NOV 2012 $35.00 calls on 3D Systems. Motley Fool newsletter services recommend 3D Systems and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.