Stratasys Tries To Rally After Nearing 10-Week Line

The automated machinery industry group has kept its grip on a top ranking this week, and one group member could be providing a buying opportunity.

The group, whose full name is Machinery-Metal Handling/Automation, ranked No. 5 out of IBD’s 197 groups as of Thursday.

The two best-rated stocks in the 10-member group are a couple of 3D printing names, 3D Systems (DDD) and Stratasys (SSYS).

While 3D Systems is well extended past its last proper buying range, Stratasys is a different story. During this past week, Stratasys came close to touching its 10-week moving average, then rallied in strong volume.

A rebound off the 10-week line can serve as a buying opportunity, but in Stratasys’ case, the stock didn’t actually slip to that level.

Still, aggressive investors could argue that it came close enough and still view the recent action as a chance to purchase shares.

Eden Prairie, Minn.-based Stratasys has earned a best-possible IBD Composite Rating of 99, helped by its long streak of double-digit percentage gains in quarterly EPS and revenue.

Stratasys and 3D Systems are part of a fast-growing sector. The companies’ 3D printing machines mostly have been used for modeling and prototyping. But now they increasingly produce final products such as dental fittings or aviation parts, as noted in an Industry Snapshot story in IBD’s July 23 edition.

Overall spending on 3D printing, also called additive manufacturing, is forecast to reach $1.5 billion this year, up 15% from 2011, according to Piper Jaffray. The firm expects the market to grow 16% a year, hitting about $5 billion by 2020.

Both Stratasys and 3D Systems have launched less-expensive 3D printers, making the technology available to a new group of users.

Stratasys sells its Mojo printer for $9,900, calling it “the market’s lowest-priced professional-grade” system, while 3D targets consumers with its Cube printer priced at $1,299. The Cube can make toys, bracelets or chess pieces.

On the downside, some analysts worry recent media hype over the technology may be getting ahead of the actual growth prospects.

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