In this article, we will be looking at some 3D printing stocks bought by hedge funds.
3D Printing or Additive Manufacturing is the process of creating a three-dimensional object through a computer-aided design (CAD) Model. It is basically used to design and consolidate any material through computer control. The idea of 3D printing has been around since the 1940s, but proper additive manufacturing equipment and tools had not been developed till the ’80s. However, even at that time, the technology was merely rapid-prototyping. With the advancement in technology especially after the 2010s the 3D printing industry is rapidly taking over the world and it has become eminent among investors. These days 3D printing is being used in food, fashion, health, transportation, firearms, and many other industries.
Applications of 3D Printing
Why is 3D printing getting so much hype in the modern world? Because it has the potential to replace the processes of casting, stamping, molding, and machining which is collectively a $12 trillion industry. According to McKinsey & Company, 3D printing is “ready to emerge from its niche status and become a viable alternative to conventional manufacturing processes in an increasing number of applications.”
3D printing has revolutionized healthcare by giving us the ability to print organs, cells, skin and other body parts without the fear of rejection by the body like it happens with donated body parts. The aerospace industry can use 3D printing to create the parts they need with utmost precision and timeliness. On top of that, the manufacturing speed of products has been reduced to a minimum, all thanks to the technology of additive manufacturing. These days fused filament fabrication is the most commonly used process of 3D printing. The process uses a continuous filament of a thermoplastic material.
With all this in mind, it is safe to say that the 3D printing industry is getting harder to ignore each day by investors. Companies like ANSYS, Inc. (NASDAQ:ANSS), Autodesk, Inc. (NASDAQ:ADSK), and HP Inc. (NYSE:HPQ) are slowly becoming the companies of choice for investors for long-term financial growth.
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Our Methodology
We analyzed our data of 867 elite hedge funds and picked the 3D printing stocks most popular among these funds as of the end of the third quarter.
9 3D Printing Stocks Hedge Funds Like
9. Materialise N.V (NASDAQ:MTLS)
Number of Hedge Funds: 9
Materialise N.V (NASDAQ:MTLS) is a Belgian 3D printing company. It was founded in 1990 in Leuven, Belgium, with only a single stereolithography machine.
Materialise had increased its 2021 targets twice. The company has two important software platforms: Magics and Mimics. The company also produces personalized medical devices and personalized footwear (insoles). It is also operating in the growth market of unique eyewear solutions.
Cathie Wood’s ARK holds the highest position in Materialise N.V (NASDAQ:MTLS) with 5.59 million shares worth $112.4 million.
8. FARO Technologies (NASDAQ:FARO)
Number of Hedge Funds: 9
FARO Technologies (NASDAQ:FARO) is a 3D imaging company that mainly focuses on 3D measurement, imaging, and realization solutions. The company was founded in 1981 and is headquartered in Florida.
On October 7, Needham analyst James Ricchiuti upgraded FARO Technologies (NASDAQ:FARO) shares from Hold to Buy and kept a $77 price target. The analyst is confident in the management’s abilities to “transform” operations. The analyst also provided a positive outlook on the company as he believes that the company’s decision to outsource all of its 3D metrology and scanning products manufacturing will begin paying off in 2022.
At the end of the third quarter of 2021, Chuck Royce’s Royce and Associates held the most valuable stake in FARO Technologies (NASDAQ:FARO) with around 1.1 million shares worth $72.155 million. The second position was held by Paradice Investment Management, followed by ARK Investment Management.
7. Nano Dimension Ltd. (NASDAQ:NNDM)
Number of Hedge Funds: 10
Nano Dimension Ltd. (NASDAQ:NNDM) is an Israel-based company that, together with its subsidiaries, develops additively manufactured electronics. The company was founded in 2012 and has around 90 full-time employees.
The company has about $1.4 billion in cash on hand. The company’s flagship product, DragonFly lights-out digital manufacturing (LDM) system, produces professional multilayer circuit boards, radio frequency antennas, sensors, conductive geometries, and molded connected devices for prototyping through custom additive manufacturing. The stock looks undervalued, and the company has been increasing its hold in the industry through acquiring companies such as Essemtec AG and DeepCube.
The company’s revenue is projected to grow at an over 100% rate over 2022.
6. Proto Labs, Inc. (NYSE:PRLB)
Number of Hedge Funds: 17
Proto Labs, Inc. (NYSE:PRLB) is an American prototyping and short-run production company. In January 2021, the company announced to acquire 3D Hubs, an Amsterdam-based manufacturing company, for $280 million.
In December 2021, Protolabs (NYSE:PRLB) board approved a $50 million increase in its authorized stock repurchase program with an expiration date of Dec.31, 2023. With this, the stock repurchase program is now increased to $150 million.
Harding Loevner mentioned Proto Labs, Inc. (NYSE:PRLB) in their first-quarter 2021 investor letter. Here is what it said:
“Shares of Protolabs, a provider of 3D printing and other rapid prototyping and mold machining services for manufacturing, extended their strong performance from last year and soared early in January after the company announced its intention to acquire another on-demand digital manufacturing platform. We took advantage of their runup to sell our position.”
5. 3D Systems Corporation (NYSE:DDD)
Number of Hedge Funds: 18
3D Systems Corporation (NYSE:DDD) is a South Carolina-based company offering 3D printers, printing materials, scanners. The company operates from 25 different offices worldwide.
3D Systems (NYSE:DDD) in Q3 posted non-GAAP EPS of $0.08, beating estimates by $0.03. Revenue jumped 14% on a year-over-year basis. On a non-GAAP basis the company expects 2021 gross profit margins to be between 41% and 43%.
Out of 867 hedge funds being tracked by Insider Monkey, 18 hold shares worth $284.76 million in 3D Systems Corporation (NYSE:DDD). Furthermore, Cathie Wood of ARK Investments bought 2.03 million additional shares of the company on November 11.
4. Stratasys Ltd. (NASDAQ:SSYS)
Number of Hedge Funds: 21
Stratasys Ltd. (NASDAQ:SSYS) is an Israeli-American digital printing company incorporated in Israel. The company focuses on the manufacture of 3D printers and productions mainly for office-based rapid prototyping and direct digital manufacturing solutions.
On November 8, Loop Capital analyst Ananda Baruah raised the price target on Stratasys Ltd. (NASDAQ:SSYS) from $19 to $35 and kept a hold rating on the company’s shares.
According to the Insider Monkey database, Cathie Wood’s ARK Investments holds the biggest stake in the company with 7.23 million shares worth $155.6 million representing 0.37% of the fund’s portfolio.
The investment management firm Alger mentioned Stratasys Ltd. (NASDAQ:SSYS) in their first-quarter 2021 investor letter. Here is what the firm said:
“Short position Stratasys also contributed to performance. Stratasys is one of the larger 3D printing companies. While additive manufacturing (3D printing) is a revolutionary concept, it has only seen its primary adoption for manufacturing prototypes and test parts, not high-volume end-use parts. Unfortunately for incumbents like Stratasys, additive manufacturing has continued to attract capital and dozens of new entrants have emerged with new technologies targeting specific applications. Industry pioneers like Stratasys have seen key patents expire and have lost market share to new competition. As a result of these factors, Stratasys has not grown for five years. Some industry participants believe that Stratasys’ plastic extrusion technology is simply too slow to be an acceptable solution for higher volume manufacturing. The short position contributed to portfolio returns when Stratasys’ shares declined due to year-over-year revenue contraction, continuing market share losses, a talent exodus, the issuance of new shares via a secondary offering, and no significant progress on developing new opportunities in promising additive verticals like metal and dental.”
3. HP Inc. (NYSE:HPQ)
Number of Hedge Funds: 34
HP Inc. (NYSE:HPQ) is an American information technology company and is the world’s second-largest computer vendor. As of 2021, the company is ranked at 56 among the Fortune 500 companies. HP Inc. (NYSE:HPQ) started its 3D printing solutions operations in 2016; before that the company primarily focused on personal computers and printers.
On November 24, Evercore ISI analyst Amit Daryanani raised the company’s price target from $35 to $40 and kept an Outperform rating on its shares.
In December, the stock surged to its 52-week high. The company posted strong third-quarter results that surpassed expectations, and showed growing strength in the company’s PC sales.
2. ANSYS, Inc. (NASDAQ:ANSS)
Number of Hedge Funds: 38
ANSYS, Inc. (NASDAQ:ANSS) is a Pennsylvania-based software company that focuses on multiphysics engineering software to customers across the world. The company entered the additive manufacturing market in 2017 after acquiring 3DSIM.
At the end of the third quarter of 2021, ANSYS, Inc. (NASDAQ:ANSS) had an EPS of $1.59 compared to $1.35 estimates.
As of the third quarter of 2021, among the hedge funds tracked by Insider Monkey, Impax Asset Management holds the largest stake in ANSYS, Inc. (NASDAQ:ANSS) with 770,859 million shares worth $262.4 million. In the third quarter, three of the four hedge funds that hold the highest position in ANSYS, Inc. (NASDAQ:ANSS) have increased their holding in the company.
ANSYS, Inc. (NASDAQ:ANSS) was mentioned by Baron Funds in their first-quarter investor letter: Here is what it said:
“ANSYS, Inc. is a leading provider of physics-based simulation software used to evaluate how products will perform under various scenarios. Shares fell amid a broader market correction in software valuations after a robust 2020. We retain conviction as ANSYS presented strong growth with large accounts and resiliency in its core business throughout 2020, supported by its diversified customer base and focus on secular growth initiatives.”
1. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Funds: 54
Autodesk, Inc. (NASDAQ:ADSK) is an American multi-national software, media & entertainment, manufacturing & industrial bioscience. Furthermore, the company also provides 3D imaging and printing tools around the globe.
At the end of the third quarter of 2021, the hedge funds that hold the most valuable stake in the company have been making additional purchases in Autodesk, Inc. (NASDAQ:ADSK) stock. Impax Asset Management, Citadel Investment Group, and Echo Street Capital Management have all made additional purchases in the company’s stock in the third quarter. The most valuable stakes in the company are held by Cantillon Capital Management with 1.2 million shares worth $341.67 million.
Polen Capital mentioned Autodesk, Inc. (NASDAQ:ADSK) in their third-quarter investor letter. Here are the contents of that letter:
“Shares of Autodesk have lagged recently due to expectations of short-term headwinds to free cash flow as the company transitions its billing structure to annual payments from multi-year up-front subscription payments. We view this as a transient issue and believe Autodesk’s attractive long-term growth profile remains in place.”
You can also take a look at 10 Penny Stocks to Buy in December and 10 Best Stocks to Buy for the Next 10 Years.
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Disclosure: None. 9 3D Printing Stocks Hedge Funds Like is originally published on Insider Monkey.
