Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: Utekai One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 207  
Subject: Expensive or Great Value Buy Date: 3/19/2006 10:40 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 2
SSYS has had great continual growth for 3 years. One or two very minor hiccups along the path where they are now generating revenue at the rate of $100 mln per year and keeping up an excellent net margin.

Though we may never know why John Chambers touted SSYS during CSCO shareholders' meeting, we do know SSYS is instrumental in opening this market.

Not only is SSYS leading the low-cost printing market, they're leading the overall RPM market and are competing against strong competition. You can't overlook Dassault Systemes, this French company, though I hate frenchies as much as the next courageous person, is still a viable and strong competitor.

But anyway, SSYS has recovered from a drop to near $18 and is back over $28. The large short position seems to be holding but when fundamentals keep coming through like SSYS's management is providing, the short will have no choice but to be reduced now, or be reduced at much greater prices in the future. Can't help but feel naked shorting is the cause behind the drop to $18.

I look at SSYS as one of the best long-term plays out there. The current management is reasonably compensated and Crump gets and takes advice from his more experienced father, Crump Senior. They are taking low-risk steps to growing, and doing so. They could be riskier, but why, at this point the market leader 5 and 10 years from now might not have emerged, or might be still SSYS. The technology, while disruptive already, is still in it's infancy.

Speaking of infancy, SSYS continues to put in place the infrastructure, the teams, the capacity to ramp up and produce many more machines and raw product materials and do so in a stabile fashion. Have to wonder if their competitors are so astute.

I think Crump has a 5 year plan rather than a quarterly plan, and do I want to see the 5 year plan succeed? Yes.

SSYS is my number one long-term hold, and this post only touches on surface of just a few issues, but so many other important and defining issues aren't here in this post.

What about weaknesses?

Some of the European competitors are a little more nimble at productizing new technologies, they've had to be in the past and it's in their culture. The Swedes and Finns in particular, but now SSYS licensed the technology and will at least have the opportunity to defend the US market, though at lower margins.

SSYS is not strong yet in rapid manufacturing. But their recently announced project could get them there, and funded for them rather than purely out of free cash flow (which remains strong by the way).

This sector could be itself disrupted if new technology swept in. The possibility for this exists, but it lessens with each passing year as the current participants search out the remaining ways to rapidly prototype. But genetic engineers and chemists might disagree. Why? Imagine I have a large drum of carbon that hooks up to a machine and gets a program via the Internet. The program and machine use the carbon to modify molecular structure or even gene sequences to create anything I order to be built right there right then. It's not just rapid manufacturing, but just-in-time manufacturing right in the home. Who's doing this? Just wait and see ...

There should be no doubt in anyone's mind this market sector will continue to see good growth, even if the US and/or world economy suffers a depression. This is because these machines take out cost from nearly every process. Now as new processes are brought on line or re-engineering, 3d printers are playing key roles is cost reduction through speeding up the development process.

Ok, all for now.
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement