Here's why I bought back into AMAVF

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I had gotten out of all the 3D stocks, even AMAVF, my favorite, because of the huge PE’s in relation to growth rates. However I recently took back a small position in AMAVF. Their order flow has just been impressive. Here’s a copy of their releases since Jan 1st, as culled from the Yahoo Finance board on Arcam:

From Yahoo Headlines
Arcam receives order for Arcam Q20 from GKN Aerospace in the UK (Thu June 12)
Arcam Launches a Nickel Base Superalloy Process for Additive Manufacturing with Arcam’s EBM Systems (Mon, Jun 9)
Arcam Receives Order for an Arcam Q20 System (Mon, Jun 9)
Arcam Receives Order for an Arcam Q20 System (Tue, May 27)
Arcam Receives Order for Arcam Q20 System (Thu, May 8)
Arcam Receives Order from US Client (Fri, Apr 25)
Arcam Receives Order from New Zealand (Wed, Apr 16)
Arcam Receives Order from customer in China (Fri, Apr 4)
Arcam Receives Order from Germany (Fri, Mar 21)
Arcam Receives Order for Arcam Q20 System (Fri, Mar 7)
Arcam receives order from New Zealand (Thu, Feb 27)
Arcam Closes Strategic Acquisition of Metal Powder Manufacturer AP&C in Canada (Wed, Feb 12)
Arcam Receives Order from Implant Industry in Europe (Feb 11)
Arcam Receives Order from Implant Industry in China (Wed, Jan 22)
Arcam Receives Order from Aerospace Industry in the US (Jan 22)
Arcam Implements a Share Split 4:1 (Thu, Jan 16)

It’s way down from the high (post-split) of about $50, but it’s still very high priced compared to it’s trailing earnings, so I’m taking just a very small position. It does seem as if their new very large Q20 machines have caught on.

Saul

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However I recently took back a small position in AMAVF. Their order flow has just been impressive. Here’s a copy of their releases since Jan 1st, as culled from the Yahoo Finance board on Arcam:

Hey Saul:

So that is 13 purchases in the first half (or there abouts) correct?

In 2013, they sold 25 printers and I think they do guide for increased sales in the second half but as they now sit, they are just half of last year’s sales at the half year mark.

I recall they were forecasting 40 printer sales per year over the next 3 years.

It seems to me that the projected revenue from those projected sales would still yield and pretty richly valued market cap.

This comment from the CEO tends to spook investors:

http://ir.arcam.se/en/about-arcam/ceo-comment/

At the same time, we are humble in our understanding that industry’s adaptation to broad mass production using Additive Manufacturing will take time and, consequently, it is difficult to foresee exactly how growth will shape up in the near future. In conjunction with our listing on NASDAQ OMX, we presented a forecast for 2015 that we fulfilled already during 2013. For the time being, we will not release detailed guidance or financial goals but instead…

The 2013 sales of 25 printers yielded around $30 million US as I recall and while I am not clear if they realize revenue at time of sales, this equates to around $1.2 million per printer.

If we presume they can hit their target of 40 printers at year end (quite an aggressive target since they would need to sell 27 printers on the back end)…that would equate to $48 million in annual sales.

That would still get us a P/S of over 10??

Bottom line IMO…still richly valued even with optimistic projections…but on the good side:

http://www.stockta.com/cgi-bin/analysis.pl?symb=AMAVF&co…

…maybe a cup’n’handle forming??

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but as they now sit, they are just half of last year’s sales at the half year mark.

It’s true, but they are selling a considerable number of their new, much larger, printers, which I assume are considerably more expensive. That adds up to a bunch more revenue, I’d guess.

Saul

PS I guess I was also comparing it to other 3D printing companies like XONE, which say they do metal printing but sell minuscule numbers of machines and operate at a loss last I looked.

However, I’m keeping my position in AMAVF small, as I said.

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