NEW BEARISH Plays
Voxeljet AG - VJET - close: 17.67 change: -0.81
Stop Loss: 19.05
Target(s): To Be Determined
Current Option Gain/Loss: Unopened
Entry on July -- at $---.--
Listed on July 28, 2014
Time Frame: 2 to 3 weeks
Average Daily Volume = 1.0 million
New Positions: Yes, see below
Why We Like It:
Supporters of 3-D printing believe the technology will revolutionize the manufacturing industry. The technology is spreading. Normally 3D printers work with plastics and metals. Now there are companies trying to use 3D printers to make food. One company even hopes to 3D print human organs.
VJET is a German technology company that makes 3D printers on an industrial scale. A normal 3D printer can sit on your desk. VJET's largest printer has a workspace of 4x2x1 meters and is about the size of a garage.
This stock went public in 2013 during the initial 3D printing craze. Unfortunately the euphoria has worn off. VJET has tumbled from $70.00 in late 2013 to $13.00 just a couple of months ago. This industry saw a significant rally in June but it peaked in early August. Now VJET is retreating lower again.
VJET's latest earnings report in May was a disappointment. Wall Street was hoping for a loss of 6 cents with revenues of $3.79 million for the March quarter. VJET reported a loss of 22 cents and revenues only hit $2.7 million.
The 3D printing stocks stumbled again today after Amazon.com (AMZN) announced their 3D printing online store. This could spell trouble for 3D companies. AMZN is a tough competitor. Now it looks like AMZN's initial foray into 3D printing is small nicknacks for consumers. They're selling the end product and not printers. This is unlikely to affect VJET's business.
The bigger threat might be Hewlett-Packard (HPQ), which announced earlier this year that they were entering the 3D printing market and planned to build printers for businesses, not the consumer. That's not good news for VJET.
Today shares of VJET are breaking support near $18.00. We think the decline continues. I do want to point out that investors should consider this a more aggressive, higher-risk trade. That is because the short interest in VJET is up to 44% of the very small 9.6 million share float. That does pose a risk of a short squeeze (just like the rally VJET saw in June).
Tonight we're suggesting a trigger to open bearish positions at $17.45. We are not setting a target yet but the point & figure chart is bearish with a $14.00 target.
Considering buying the put option instead of shorting the stock. Buying a put will limit your risk to the cost of the put.
Traders should also keep in mind our time frame. This trade may only last two or three weeks. The company reports earnings in mid August but there is no confirmed announcement date yet.
Trigger @ $17.45
- Suggested Positions -
Short VJET stock @ $17.45
- (or for more adventurous traders, try this option) -
Buy the Sep $17 PUT (VJET140920P17) current ask $1.95
Option Format: symbol-year-month-day-call-strike