It was difficult to find a hotter corner of the tech sector last year than 3-D printing. Shares of 3D Systems (DDD), Stratasys (SSYS), ExOne (XONE) and Voxeljet (VJET) all exploded in 2013. 3D Systems nearly tripled and Stratasys was up 72%.
Then, as momentum stocks crumbled this spring, the 3-D printers came crashing to earth. Year to date, 3D Systems is down 38% and Stratasys is down 19%. The smaller names have been hit even worse. ExOne is down 47% in 2014 and Voxeljet is down a whopping 56% year to date. Even while many tech stocks rallied since mid-May, the 3-D printers stayed on the sidelines.
That seems to be changing. Today, 3D Systems rose 7% and Voxeljet added more than 10%.
Of these names, I like 3D Systems the most because it is a market leader while still being highly levered to the continued adoption of 3-D printing. The smaller names will be whipsawed much more (see Voxeljet's year-to-date performance).
When you look at 3D Systems' chart, you can see that this company was clearly taken to the woodshed by investors and had to remain in the corner for several weeks. After a two-month period of consolidating at current levels, it appears that 3D Systems' stock is finally ready to move higher. And while 3D Systems' stock has been in the penalty box for most of the year, demand for and interest in 3-D printing continues to move much higher.
3-D Systems has already had a nice run since it put in lows in late April below $45 and the stock is up 28% since then. Yet, even at current levels, the stock is trading around where it was last October. Its 52-week high, $97.28, was reached in January -- that's a 70% above current levels. The stock is officially out of the penalty box and it should be watched closely. It could continue to climb out of its year-to-date losses in coming weeks.