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Trade-Ideas: 3D Systems Corporation (DDD) Is Today's "Water-Logged And Getting Wetter" Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified 3D Systems Corporation ( DDD) as a "water-logged and getting wetter" (weak stocks crossing below support with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified 3D Systems Corporation as such a stock due to the following factors:

  • DDD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $123.8 million.
  • DDD has traded 1.9 million shares today.
  • DDD traded in a range 232.8% of the normal price range with a price range of $4.56.
  • DDD traded below its daily resistance level (quality: 48 days, meaning that the stock is crossing a resistance level set by the last 48 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Water-Logged and Getting Wetter' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying negative price action. In this case, the stock crossed an important inflection point; namely, "support" while at the same time the range of the stock's movement in price is twice its normal size. This large range foreshadows a possible continuation as the stock moves lower.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in DDD with the Ticky from Trade-Ideas. See the FREE profile for DDD NOW at Trade-Ideas

More details on DDD:

3D Systems Corporation, through its subsidiaries, develops, manufactures and markets 3D printers, print materials, on-demand custom parts services, and 3D authoring solutions for professionals and consumers. DDD has a PE ratio of 125.3. Currently there are 5 analysts that rate 3D Systems Corporation a buy, 1 analyst rates it a sell, and 2 rate it a hold.

The average volume for 3D Systems Corporation has been 3.6 million shares per day over the past 30 days. 3D Systems has a market cap of $5.6 billion and is part of the technology sector and computer hardware industry. The stock has a beta of 1.86 and a short float of 33.5% with 10.76 days to cover. Shares are up 55.1% year to date as of the close of trading on Friday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates 3D Systems Corporation as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, increase in net income, expanding profit margins and solid stock price performance. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 0.7%. Since the same quarter one year prior, revenues rose by 44.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • DDD's debt-to-equity ratio is very low at 0.04 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 5.11, which clearly demonstrates the ability to cover short-term cash needs.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Computers & Peripherals industry average. The net income increased by 12.2% when compared to the same quarter one year prior, going from $8.32 million to $9.34 million.
  • The gross profit margin for 3D SYSTEMS CORP is rather high; currently it is at 57.89%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, DDD's net profit margin of 7.73% significantly trails the industry average.
  • Compared to its closing price of one year ago, DDD's share price has jumped by 124.14%, exceeding the performance of the broader market during that same time frame. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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