Booking 102.24% Gains — and Betting on the 3D Printing Revolution

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world.

It was another strong week for global stock markets, with the S&P 500 jumping 2.03% and powering through the 1,600 level for the first time ever. Global markets are joining the party as well, with the MCSI Emerging Markets Index soaring 3.03%.

All of your Bull Market Alert positions gained strongly, with your bets on Japan through Sony Corporation (SNE) and ProShares Ultra MSCI Japan (EZJ) gaining 4.13% and 3.87%, respectively. ProShares Ultra MSCI Japan (EZJ) is now up 24.63% since my initial recommendation.

Delphi Automotive (DLPH) also jumped 2.33% last week and hit a new 52-week high. With your August 2013 $42 call options up 102.24%, sell your remaining options here for your fifth triple-digit percentage gainer of 2013.

This week’s Bull Market Alert pick revisits Stratasys Inc. (SSYS), a Minneapolis-based market leader in the red hot “three-dimensional (3D) printing” space. You may recall that you’ve already made double- and triple-digit percentage gains in this sector through both Stratasys and 3D Systems Corp. (DDD) in Bull Market Alert in 2012.

As a quick reminder, “3D printing” involves designing an object on your computer using three-dimensional software like “Computer Aided Design.” The “printer” then actually manufactures the product right then and there.

3D printing produces new parts and designs in just a few hours, shaving weeks — sometimes months — from production. Last year, Stratasys’ own RedEyeOnDemand service “printed” a full-scale model of a fully operational Harley Davidson-style motorcycle. Forbes recently reported that a Stratasys Dimension SST 3D printer printed the world’s first fully functioning 3D-printed gun.

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Those skeptical of 3D printing stocks believe that they are all sizzle and no steak. Those bullish on the industry believe the sky is literally the limit in what the Economist magazine calls the “third industrial revolution.”

Stratasys and other 3D stocks pulled back sharply over the past few months, hurt by bad press from Citron Research, a short-seller, which called rival 3D Systems a “bubble stock” in an overhyped industry. But 3D printing stocks rebounded sharply after Stratasys reported fourth-quarter results on March 4 that beat estimates. And just last week, 3D Systems (DDD) reported earnings that sent the share prices of both Stratasys and ExOne (XONE) sharply higher.

Stratasys is announcing its latest round of earnings next Monday, May 13, before the market opens. The company is expected to report a 36% increase in earnings per share on a 118% rise in revenue.

This offers you the perfect opportunity to buy Stratasys, Inc. (SSYS) at market today ahead of earnings. Place your initial stop at $66.00. As the stock has had quite a run recently, the options are quite expensive. Nevertheless, if you want to bet on positive news before next Monday’s earnings announcement, I recommend the September $85 options (SSYS130921C00085000).

Portfolio Update

Bank of Ireland (IRE) gained 1.65% last week. Bank of Ireland recently announced that it was supplying funding for a large highway infrastructure project acting as “the leading financier of Irish infrastructure projects.” As Bank of Ireland begins to provide this type of high-dollar government-secured funding, it solidifies critical new profit streams for many years into the future. IRE is a BUY.

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ProShares Ultra MSCI Japan (EZJ) added 3.87%. Once again, EZJ gained handsomely last week and hit a new 52-week high. While many economies have struggled to reduce inflation, Japan’s challenge is to push its core consumer rate up to 1.9% by March 2016 to kick start its struggling economy. EZJ remains a BUY.

Sony Corporation (SNE) jumped 4.13% over the past five trading days. This morning’s Wall Street Journal Asia forecasts promising earnings reports for Japan’s large corporations, and cites the sharply weaker yen as the primary driver. A one yen decline against the euro adds a whopping six billion yen to Sony’s yearly profit. This alone caused Sony to double its profit forecast. Sony will report earnings on Thursday, before markets open. SNE is a BUY.

Melco Crown Entertainment Limited (MPEL) added another 1.98% last week. Traders will jockey their positions this week in expectation of MPEL’s earnings report, due out Wednesday before markets open. Aggregate gaming revenues in Macau — “Asia’s Las Vegas” — are expected to grow from 12% to 15% annually between now and 2018. MPEL is a BUY.

Delphi Automotive (DLPH) gained 2.33% last week, and hit a new 52-week high on the heels of its earnings report on Wednesday. Revenue was $4 billion and in line with consensus estimates. But the $1.07 earnings-per-share (EPS) number versus an analyst consensus of $0.95 EPS was much better than expected. DLPH also issued guidance for adjusted earnings of $1.05 – $1.15 in the second quarter and $4.15 – $4.41 for full-year 2013. Look for a $0.17 per share dividend on May 30 to shareholders of record as of May 15. DLPH is a BUY.

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