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Founder of Tom Renna began his professional career on Wall Street 25 years ago after graduating Rutgers University. In 2005 Tom founded Equities Research LLC, a small boutique investment research firm where he provides market research analysis and consulting services to both... More
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  • Stratasys: Hyped Back Up Again!  0 comments
    May 10, 2013 8:26 AM | about stocks: SSYS, WMT, AAPL, DDD

    Stratasys Ltd (NASDAQ: SSYS) closed today at $82.20 and is now up $22 (36%) in a ten week span.
    On Monday the Company will report earnings before the opening bell and all of Wall Street is bidding up the stock in anticipation of a stellar report. This afternoon Janney Montgomery initiated coverage with a buy recommendation.

    Readers of my work know that I warned SSYS was the most over priced stock in the market back in January and saw shares fall from an all time high at $94 to $60 within 5 weeks.
    Well with shares bouncing back up over $86 this week, I am writing to alert readers again that there is a GREAT STOCK to short in the market again. right. Stratasys (SSYS)

    Earnings Preview :
    Janney initiated coverage with a price target of $101 today.
    With 38 million shares outstanding that's a projected $3.8 billion market cap.

    For this company to trade at $101, they would need to earn $126 million net for the year at a PE multiple of 30.

    TO put this in perspective, they earned less than $9 million in 2012 as a combined entity. (a 14 fold increase???)

    I can't believe Wall Street Firms can get away with these RECKLESS Price Targets.

    On April 13, 2012, the day prior to announcing the merger, shares of SSYS were under $35.00, with 21 million shares outstanding (for a $735 million market capitalization.)
    So this is more than a stock going from $35 to $82 per share, this is about a company market capitalization going from $735 million to $3.2 billion in 1 year...when all they did was merge with another company to have the combined entity report $1.4 million Operating cash flow for 2012!

    the new Stratasys (post merger) already reported financials as a combined company in the last SEC filing.
    Together the new entity reported $1.4 Million in operating cash flow for the full year 2012. (Stock is trading nearly 2300 times Cash Flow.)

    Carrying $822 million of GOODWILL is another great line item. (or how about the HALF BILLION DOLLAR increase in INTANGIBLE assets?)

    All the hype and fluff every where you turn, but at the end of the day its the financials that matter. It may see $94 again with all the bulls out there, but eventually it won't live up to the hype at these levels.
    It will one day be a "dime a dozen" product that you can buy at Walmart from some little competitor. THe company makes it sound like the NEXT APPLE on the NEEDHAM Conference during the 1st quarter.
    I doubt everyone will "have to have" a 3D printer any time soon.

    These 2 companies really needed one another. SSYS probably told OBJET, we'll value you at $1 billion if you don't mind us valuing ourselves at $1.2 billion. (we get a premium because we're a public company).

    Only problem now is OBJET shareholders will need to get liquid. 6 month period is over (December 3rd 2012 was close of deal).
    I would guess SSYS will do an underwriting (like DDD just announced)) soon. (I mean that's how wall street keeps their lights on, raising money for hot hyped up sectors). Janney Montgomery initiating a buy this afternoon shows they are probably jockeying for position to get a slice of a deal.
    Brokerage Firms aren't focusing (highlighting) on the statement of cash flow because it will make it harder to float a deal (raise capital) at these lofty levels.

    SSYS NEEDS an underwriting because the EARNINGS QUALITY is so poor.

    Past Posts on this ticker from earlier this year:

    Citron Research Raises Red Flag on 3-D Printing Stratasys down $24 in 3 what?

    Here's Another Short Pick that is DESPERATE for Cash:
    click link below:

    Most OverPriced Stock Titan Machinery Files Proxy Statement

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