You want to invest in leaders, people with moats. My problem with investing in this space right now — I used to be an investor in 3D Systems — I think 3D Systems is probably the leader there. Their management sounds great, they’ve done a lot of acquisitions and hopefully that works out well for them, but it is tough to bring in acquisitions, as we’ve seen with other companies, and make those …
Isaac: Integration challenges.
Blake: Integration is not easy, but they did a great job with Geomagic, getting the CEO of that company. She’s awesome, and I think that’s a great strategy with them. You don’t really hear a lot with Stratasys, but overall there’s only two companies you can invest in.
It boils down to that, so you’ve got a fixed supply of shares that you can invest in, in 3D printing, and you’ve got a ton of demand from the public that wants to be in this space, so that’s going to drive the value of these up.
I think you’ll see other companies come in here, become public — like ExOne for example, which is an industrial company — they’ll have a high valuation too, but there’s just a tremendous demand for shares right now.
As a long-term investor myself, it’s just not comfortable for me, with the current demand and supply. Then you have companies like General Electric Company (NYSE:GE), for example, buying 3D printing companies. There’s just a lot of uncertainty in the industry. I would like to think that Stratasys and 3D Systems are going to be there in 20-30 years but it’s just not comfortable enough for me, as a really deep value guy.
Other people that are more comfortable with that, and are psychologically oriented to invest like that, will probably be successful, but me, I know myself and I know that when I see valuations get like that I’m going to do something stupid. I’m going to sell when I shouldn’t, so it’s not a space I should be in.
Isaac: It’s not a very good idea.
Yeah, as a value investor I think that’s a very valid point. For any of the growth investors out there, it’s always good to not have all your eggs in one basket. With the 3D printing you might want to be exposed to other companies, other stocks.
The article The Big Picture on 3-D Printing originally appeared on Fool.com and is written by Blake Bos and Isaac Pino, CPA.
Blake Bos has no position in any stocks mentioned. Isaac Pino, CPA owns shares of General Electric (NYSE:GE) Company. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool owns shares of 3D Systems, General Electric Company, and Stratasys and has the following options: Short Jan 2014 $55 Calls on 3D Systems and Short Jan 2014 $30 Puts on 3D Systems.
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