Wednesday, December 11, 2013

A 3D Printer Stock With More Going For it Than Hype (MDDD, VJET, CAMT)

In retrospect, their pullbacks come as no real surprise. Neither Voxeljet AG (NYSE:VJET) nor Camtek LTD. (NASDAQ:CAMT) saw their shares soar on any news that was meaningfully sustainable, and after the "shoot first, ask questions later" market had a chance to start asking questions, it became clear that - even with the largest of glimmers of corporate progress unveiled a few weeks ago - CAMT and VJET both had been bid up more on hype and less on substance. Meanwhile (and this could be bitterly ironic to some), a small cap play in the same 3D printing space that (1) didn't beat the daylights out of its hype-drum, and (2) is actually much closer to bringing a revenue-bearing product to the market [per today's news - more on that below] isn't getting anywhere near the same attention. That company? Makism 3D Corp. (OTCBB:MDDD). The good news is, MDDD finally looks like it's revving its engine, while Camtek and Voxeljet AG shares continue to deteriorate.

For the record, VJET shares are still down 43% from their November 18th peak, and that's counting the late-November bounce... a bounce that was also largely undone. CAMT shares are down 40% from their November 26th peak, and seem to be aiming to close a huge gap left behind on the 25th.

Both pullbacks are largely the result of over-reactions to news from each company.

For Voxeljet AG, it was a combination of events and news from, and about, the company itself. VJET only IPO'd on October 18th, but it couldn't have done so at a better time - another wave of 3D printer mania was just starting to build. The market was ready to see and 3D printer maker's glass as half full, and the media was positive on the company's on-demand-printing venture from the get-go; rather than sell printers, Voxeljet was going to focus more on doing 3D printing work for organizations that needed - but didn't have - a 3D printer of their own. VJET tanked on the mere suggestion from a notable short-seller and self-proclaimed fraud-detector that it was a "joke" of a company. One would expect a knee-jerk bearish response to such a proposal, but interestingly, the market hasn't rebuked the idea (to any significant degree) by buying the stock in earnest again. Perhaps traders are coming to terms with the fact that there are no major barriers to entry in the contract-printing business.

As for Camtek LTD., the big story that sent CAMT shares through the roof in mid-November was the announcement that it had designed and was ready to build a 3D printer that could fabricate circuit boards ... a much easier process than the traditional foundry/layering process to make a circuit board. Admittedly, it's very cool that it can be done, and it will be a cheaper as well as faster alternative for small-run jobs. As someone reasonably asked of the premise, though, did Camtek just offer a solution for a problem that doesn't exist? There will be some demand to be sure, but it remains to be seen of self-printed circuit boards are the $600 million to $700 million business the company thinks it will be. In the meantime, CAMT clarified that a revenue-bearing circuit board printer wouldn't hit the market until the latter part of 2014, rather than in early 2014. One can only wonder, since this is a new (and fairly unproven) premise, what sort of delays might pop up?

What does any of this have to do with Makism 3D Corp.? It's simply an interesting juxtaposition. Two companies garnering a lot of attention with little actual (and largely overhyped) substance, versus MDDD, which hasn't clamored for stock-pumping attention, yet is arguably more "business-ready" than either Camtek or Voxeljet. Fast forward to today.

Per this morning's press release, Makism 3D is on the verge of entering the production phase of its existence. It believes it will begin making, selling, and shipping 3D printers in the first quarter of 2014. And, given that there's nothing particularly unusual or niche-oriented about its 3D printers (it's simply a high-quality, second-generation machine at an affordable price), it's unlikely the organization will face any major manufacturing hurdles or unexpected roadblocks. The same can't be said for Camtek LTD, which is breaking new ground [perhaps nobody else makes circuit board printers for a reason?], nor can the same be said for Voxeljet AG ... a corporation that has already confused and perhaps frustrated investors. MDDD is following a proven path with a proven product. It may not be earth-shattering, but for investors, reliability and credibility are key. Makism 3D Corp. has plenty of both.

With all of that being said, over the course of the last three days it looks like the market has finally had its "aha" moment with MDDD, pushing it up from a low of $0.41 to the current price of $1.05. Now that the ball is rolling though - spurred by meaningful news - odds point to this chart becoming a well-deserved momentum play.

For more on the company, visit the Makism3D website here.

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