Head of Saxo Strats
Summary: The 3D Printing theme basket is one of the worst performing baskets over the past year, but this year 3D printing companies are feeling the love from investors with the basket up 2%. Based on our annual review of the theme basket we are expanding the basket from 16 to 21 companies which makes the basket more diversified and interesting. The industry is back into positive revenue growth but profitability is still lacking, but sell-side analysts are seeing through this remaining bullish on the industry.
Is the potential finally being released?
In July 2021, we launched our 3D Printing theme, or additive manufacturing as it is also called, and the key backdrop for the theme is the great potential for more efficient and lightweight manufacturing coupled with software simulations. But the industry has suffered from many false starts since it was commercialized back in the late 1980s.
This year’s performance is as of yesterday’s close +1-9% making our 3D Printing theme basket the fourth best performing basket. However, the past year has seen a 51.4% decline making it the third worst performing basket only surpassed by cannabis (-62.3%) and bubble stocks (-51.6%). The industry is optimistic on 2022, and the pandemic has probably a welcoming tailwind for the industry as global supply chain issues could accelerate more domestic production in the developed world which requires efficient and automated processes to be viable.
The smallest theme is growing up
It was our smallest theme when we launched containing only 16 companies. But in this year’s review we are adding six companies and removing one.
Added:
Removed:
The net expansion means that the basket now has 21 stocks with a combined market value of $26.1bn, the smallest theme measured on market value up from $22.6bn when we launched the 3D Printing basket. Since July 2021, the median sales growth has improved from -13.3% to 7.3% as industrial demand has improved, but the overall industry is still not profitable with a median ROIC of -7.7%. Sell-side analysts covering the stocks are generally very positive with a 41% spread (median) from current prices to price targets.
| Name | Mkt Cap (USD mn.) | Sales growth (%) | ROIC (%) | Diff to PT (%) | 5yr return |
| Renishaw PLC | 4,867 | 25.6 | 22.5 | 9.5 | 75.1 |
| Allegheny Technologies Inc | 3,036 | -6.1 | 4.7 | 9.5 | 13.5 |
| 3D Systems Corp | 2,435 | 16.4 | -3.8 | 24.6 | 11.2 |
| Xometry Inc | 2,241 | 76.3 | -48.9 | 42.0 | NA |
| Stratasys Ltd | 1,724 | 8.2 | -7.7 | 65.8 | 23.9 |
| Proto Labs Inc | 1,536 | 6.5 | 5.2 | 6.0 | -6.3 |
| Carpenter Technology Corp | 1,514 | -9.7 | -7.2 | 25.7 | -16.6 |
| Velo3D Inc | 1,376 | NA | NA | 55.3 | NA |
| Desktop Metal Inc | 1,313 | 1,121.2 | -38.2 | 129.4 | NA |
| Materialise NV | 1,174 | -13.3 | -1.7 | 53.8 | 131.9 |
| Fathom Digital Manufacturing C | 1,143 | NA | NA | 40.7 | NA |
| FARO Technologies Inc | 1,005 | 5.0 | -2.5 | 35.8 | 49.0 |
| Nano Dimension Ltd | 975 | 44.9 | -8.0 | 155.1 | -94.3 |
| SGL Carbon SE | 870 | 4.4 | -8.5 | 36.7 | -24.2 |
| SLM Solutions Group AG | 396 | 8.8 | -16.3 | 68.2 | -59.6 |
| Shapeways Holdings Inc | 179 | NA | -3.9 | 153.4 | NA |
| Prodways Group SA | 167 | 2.6 | -4.1 | 40.8 | NA |
| Meatech 3D Ltd | 74 | NA | -211.9 | NA | NA |
| voxeljet AG | 48 | NA | -19.5 | 113.2 | -56.4 |
| Titomic Ltd | 36 | -1.1 | -96.0 | NA | NA |
| Amaero International Ltd | 35 | 332.4 | -58.0 | NA | NA |
| Aggregate / median | 26,143 | 7.3 | -7.7 | 41.4 | 2.5 |
Source: Bloomberg and Saxo Group
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
