3D Systems, Sanchez Energy Have Room to Run, Says Villere Fund Manager - TheStreet

NEW YORK (TheStreet) -- Even as the S&P 500 (SPY) - Get Report continues to make new all-time highs, there are still great investment opportunities in the market. Sandy Villere, portfolio manager for the Villere Equity Fund, told TheStreet TV that one of his top picks is 3D Systems (DDD) - Get Report

Although the stock is down 62% on the year, Villere explained to TheStreet's Gregg Greenberg that his fund has been long the position for over 10 years. The company is still "misunderstood by Wall Street," he said, as too many analysts focus on the consumer business. 


3D Systems DDD and Sanchez Energy SN data by YCharts

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However, 3D Systems' consumer business only represents 7% of revenues, with the remainder coming from the industrial side. Specifically, the company is focused on revolutionizing the manufacturing process and is working with companies like General Electric (GE) - Get Report , he said. 

He also likes Sanchez Energy (SN) - Get Report . Despite the recent downturn in oil prices and the subsequent decline in energy stocks, Sanchez is an energy stock that investors should have on their radar. Shares are down 31.5% on the year.

In this type of situation, it's important to focus on the long-term and "buy the very, very best," he said. Sanchez Energy has $500 million in cash and $1 billion in total liquidity. This will ensure the company's long-term prospects. 

Villere's third pick is DST Systems (DST) . The company has too many non-core assets that it doesn't get credit for. Therefore, investors need to use a sum-of-the-parts valuation, he said. 

Based on the company's projected pretax cash proceeds, it should trade at 8 to 12 times EBITDA, in line with its peers, rather than the current 5 times EBITDA, he reasoned. 

"There's a lot of value here," he concluded.

-- Written by Bret Kenwell

Follow @BretKenwell

TheStreet Ratings team rates 3D SYSTEMS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate 3D SYSTEMS CORP (DDD) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. 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 and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and disappointing return on equity."

You can view the full analysis from the report here: DDD Ratings Report