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3D Systems Corporation (DDD), Cree, Inc. (CREE) – Forbes Tech 25: The Unusual Suspects

The recently announced Forbes list of Fastest Growing Tech Companies of 2013 has familiar names at the top: LinkedIn Corp (NYSE:LNKD), Facebook Inc (NASDAQ:FB), and Apple Inc. (NASDAQ:AAPL).

However, there are some unusual suspects standing out in the rankings, building exciting products for rapidly growing markets. So which are these companies, how are their market and financial prospects, and can they emulate some of their more famous counterparts topping the list?

Fast growth in the future of manufacturing

3D Systems Corporation (NYSE:DDD)
3D Systems Corporation (NYSE:DDD)is a market leader in 3D Systems Corporation (NYSE:DDD) printers and print material that can be used to build everything from a toy to automotive parts. With a market cap of around $4 billion, the company is part of a $2.2 billion market that is forecasted to grow at a 25-30% rate to more than $10 billion in the next five years.

While Gross Margin currently stands at a healthy 52%, 3D Systems Corporation (NYSE:DDD)’ stock is currently an expensive proposition, as it is trading at almost 12 times its sales.

M&A (merger and acquisition) activity is high in this sector. Competitor Stratasys, Ltd. (NASDAQ:SSYS) just completed a $400 million acquisition of MakerBot, while 3D Systems Corporation (NYSE:DDD) bought Phenix Systems, a French 3D Systems Corporation (NYSE:DDD) printing company specializing in metal printing. With the company forecasting a 37% growth in sales in the next 12 months, the market is bullish on 3D Systems Corporation (NYSE:DDD).

“Laser” focus

IPG Photonics Corporation (NASDAQ:IPGP) ranks #11 in Forbes list of Best Small Companies — if you can call a $2.6 billion valuation small in the first place. The company is the global No.1 in specialized lasers, called fiber lasers, that are more powerful and efficient than conventional lasers. These lasers have applications in diverse areas like materials processing, telecommunications, and micromachining.

Stock analysts are uniformly positive—the product is disruptive (the fiber lasers segment is growing at 60%), Gross Margins are at 54%, and the company is vertically integrated (unlike many competitors.) IPG Photonics Corporation (NASDAQ:IPGP)’s capacity for growth is fuelled by a $370 million cash chest and the acquisition of West Coast UV laser company Mobius Photonics to accelerate entry into new markets. Most analysts therefore are putting a strong “Buy” on IPG Photonics Corporation (NASDAQ:IPGP) stock, especially because it remains potentially undervalued.

A bright future

With the lights going out on the incandescent light bulb by the January 2014 deadline, the spotlight is firmly shifting on LED lighting makers like Cree, Inc. (NASDAQ:CREE).

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