Isn't it nice how PRLB chooses to break out of a stage 2 base-on-base (also highlighted in today's webinar on the new Growth 250 features) right as DDD and SSYS are wavering in their late-stage purgatory?

 

PRLB shuns 3D printing, which uses an additive process by layering materials into a three dimensional objects with resolution on the micron scale.

 

Instead they stick to the tried and true subtractive processes of yore, like an artist chipping away at a block of marble to get to the statue that lies within. The advantage they claim is the 'rapid' in rapid prototyping, offering as low as a one business day turnaround for CAD designs uploaded to their site.

 

I'm pretty sure if 3d printing can speed up enough to guarantee their dates, they will invest heavily, only adding to their appeal. There are key differences between additive and subtractive manufacturing processes that may be advantageous depending on the customer's needs. If PRLB wants to expand, they'll eventually invest in the tech, maybe buying up a 3d startup.

 

They continue to contend that growth of gross sales will be +25% for at least the next two years. Pretax profit margin is currently 30%. Annual EPS growth looks very healthy but not explosive.

 

The only ugly thing here is the group rating which is less than mediocre at 47. Although if you look at the group list, I'm not sure they're really relevant? They're into rapid prototyping as a web service, Electronic-Parts is probably not the best fit, and I see it piggy backing on the 3d rush, while competing with it using the alternate business model and tech. In that case we can group PRLB as Machinery-Mtl Hdlg/Autmn which is a very healthy group and has more entries where they serve the general public rather than as suppliers to big OEMs.

 

As an engineer, I would definitely love a service like this, even if it's to make a small box to fit a new guitar pedal design, a wing for a micro-drone, a gearbox... Upload your CAD design and presto! Prototype. No 3d printing cartridges to refill or maintenance.

 

Finally for the technical analysis, I couldn't find much wrong in the base besides a lack of accumulation. In any case the base dried up very quickly after the initial sell-off on mostly below avg volume and found 10-week SMA support all along and up-week volume is rising on the right side. The base also looks more mature than the prior base in the base on base pattern, and definitely more mature than the post-IPO sideways action.

 

Note the rising volume as buying picks up, as well as the RS line hitting a new high today.

 

I've been wanting to play the 3d market but came in too late from spending time on my greatest weakness: slacking off from my routine. Therefore might as well bite into the alternate play as it makes it move while they are weak. Also the rally is still young, this is the only real leader I've seen break out today, so even though I bought at the upper edge of the pivot range (I know Scott is advocating precision...), at least I didn't buy a breakout reversal. That's would be even worse for me.

 

If I had to compare this to an old winner, I'd say Stratacom in June 94, before being sucked into Cisco. Recent IPO, the flat base was as loose as allowable, base-on-base action and a strong breakout. Here's hoping for 893%! 

 

Cheers!