U.S. markets performed solidly last week, with the S&P 500 rising four straight days and advancing 1.8%. You booked a quick 50% gain last Wednesday in your Digital Realty Trust Inc. (DLR) call options in just eight days. Your June $48 call options in Dick’s Sporting Goods (DKS) also soared, and today I’m recommending that you sell half of your options to lock in your 52.73% gains.
This week’s Bull Market Alert recommendation, 3D Systems Corp. (DDD), revisits a revolutionary new investment theme — “3D printing.”
As I wrote in last week’s
The Global Guru, I believe that “3D printing” is at the heart of the “Third Industrial Revolution.” And much like with the potential of the Internet before the initial public offering of web browser pioneer Netscape in August of 1995, Wall Street doesn’t quite “get it.”
3D printing is pretty much what it sounds like. Design a product on your computer and the "printer" actually manufactures it for you right then and there. Imagine a world where instead of ordering a product on Amazon, your order could be “printed” or manufactured right before your eyes.
And lest you think this is science fiction, I bet your last highly customized dental crown was manufactured using this technology while you read a magazine in your dental chair. So, it’s only a matter of time before that same process trickles to everyday objects, as well.
In addition to allowing for customization on an unprecedented level, new 3D technologies are helping carbon fiber replace steel; breeding viruses to make batteries; and aiding researchers at Cornell University to "print" cupcakes. Companies soon will be making customized drugs based on your own DNA sequence. I have no doubt that other 3D printers will one day be manufacturing customized hearts and livers from your body’s own cells.
Now, here are two quick investment-related points I didn’t make in
The Global Guru last week.
First, stocks in the 3D sector could easily could become subject to the kind of investor mania that Internet stocks did in the late 1990s. At one point, 3D stocks will hit absurd valuations. The good news is that, while valulations are high today, we are far from those manic levels.
Second, it’s hard to pick a winner this early in the 3D game. Much like there were thousands of entrants into the Internet space in the late 1990s, only a few big winners emerged. Yet those that did — Amazon, Google, Yahoo — now impact the lives of all of us on a daily basis. Bet on the right horse, though, and you’re set for life.
Today, the two best ways to play the exploding 3D sector are former Bull Market Alert recommendation Stratasys Inc. (SSYS) and this week’s Bull Market Alert recommendation, 3D Systems Corp. (DDD), a leading provider of 3D content-to-print solutions, including 3D printers, print materials and on-demand custom parts services.
So buy
3D Systems Corp. (DDD) and place your stop at $22.00. For a shot a quicker triple-digit percentage gains, buy the November $30 call options (
DDD121117C00030000).
Portfolio Update
Bank of Ireland (IRE) rose 2.67% last week. Bank of Ireland announced that it expects loan impairment charges to decrease in 2012 from 2011 levels, confirming that the bank is heading in the right direction. Asset quality remained broadly in line with expectations. IRE is a HOLD.
National Bank of Greece SA (NBG) lost 4.64%. The Greek cabinet approved a plan Friday that gave Greek banks a temporary injection of cash. The final recapitalization of banks will arrive several months later than expected. NBG is a HOLD.
Intuitive Surgical, Inc. (ISRG) gained 1.60% recently. ISRG’s share price spiked right after it reported a stellar Q1 earnings report. The stock now is on track to hit its previous 52-week high from two weeks ago. Analyst firm Raymond James also initiated coverage on ISRG with an “outperform” rating. ISRG is a BUY.
Altisource Portfolio Solutions (ASPS) rose 2.75% over the past five trading days. ASPS released positive Q1 results with a net income of $25.2 million, nearly double that of Q1 2011. First quarter service revenue came in at $108.5 million, a whopping 51% jump compared to last year’s result. ASPS also bought back 300,000 shares of its stock at an average price of $63.25. Trading just below its 50-day moving average, ASPS still is technically a HOLD. But there are good reasons to expect further upside in this stock.
Monster Beverage Corp. (MNST) added 3.18% last week. Speculation continued last Thursday that Coca-Cola might be acquiring MNST — a deal that would be the largest ever in Coca-Cola’s history. With prospects being hotter than ever on the future of MNST, expect a significant premium on the current share price if Coca-Cola makes a bid. MNST is scheduled to report earnings on May 9 and is a BUY.
Dick’s Sporting Goods (DKS) gained 1.47% over the previous week. Dick’s Sporting Goods currently holds third place on a listing of sporting goods stores with the highest operating margin. A high operating margin means less financial risk. DKS is a BUY.
Novo Nordisk A/S (NVO) gave back last week’s gain and fell 4.83%. Novo Nordisk reported a good Q1 last Friday. Net profit increased by 15%, and NVO raised guidance for 2012. Sales of its flagship Victoza diabetes type-II drug also jumped 81% year-over-year. However, this figure missed analysts’ expectations by 9%, causing a dip in NVO’s stock price. NVO’s chief executive officer countered by stating sales were in line with company expectations and the disappointment was largely due to technical issues related to how the company accounted for sales. NVO remains a BUY.
Digital Realty Trust Inc. (DLR) rose 1.82%, hitting a 52-week high. DLR reported a respectable first quarter 2012 — making $1.06 per share vs. a $1.05 per share estimate. Revenues were $283.1 million vs. an expected $281.18 million. DLR is a BUY.
Alexion Pharmaceuticals (ALXN) fell 1.31% last week. ALXN reported a good quarter with Q1 earnings per share coming in at $0.45 vs. a $0.39 analysts’ estimate. Revenues were $244.7 million as opposed to an estimated $239.36 million. ALXN held its 50-day moving average and remains a BUY.
Companhia de Bebidas Das Americas (ABV) gave back 1.79% over the past five trading days. ABV reported earnings this morning and news was generally positive. ABV reported a 9.8% net sales increase for Q1, with sales volume increasing 4.3%. ABV also reported pricing increases and market share gains across the company’s sales territories. ABV is a BUY.
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