November 07, 2014      

When money follows smiles Seems like forever that Wall Street had been regularly throwing kidney punches at Hewlett-Packard?s (NYSE: HPQ) business, technology, finances and CEO. Nothing analysts wrote about HP was exempt from dire forebodings. Times have changed. Now suddenly, the winds of HP?s anticipated good fortunes are swirling around 18 Broad Street, and all is happiness. HP springing into the race and maybe vaulting to the top of 3D printing has made all the difference. Just as importantly, but obscured by Multi-Jet Fusion and Sprout, HP split into two distinct entities. See related: HP Wades into 3D Printing: Is It Now Suddenly Harder for the Little Guy? It didn?t matter a whole helluva lot that HP shares closed at $34.49 on Wednesday (November 5th), a dividend-adjusted gain of 25 percent for the calendar-year-to-date. HP feels that the share price is too low, that it “does not reflect HP?s intrinsic value.? They?re correct. Nor did it matter much that HP resumed its share-buyback program, or that five of its executive vice presidents just sold 357,836 shares for $12,342,820.

sprout and co

As Seeking Alpha summed it all up: ?Hewlett-Packard is the leader in the 2D printer industry and is now becoming the leader in the 3D printer industry. It will succeed because it has a very successful salesforce marketing a very popular quality brand. ?Add to that the increasing cash flow and earnings, the solid dividend track record, excellent financial ratios, the share repurchasing program, and splitting into two companies, and you have an excellent combination of upside catalysts. Hewlett-Packard should be considered a buy for both the short term and long term.? Seems timing, once again, is everything for HP. “The main reason why HP is entering the 3D printer market now,” comments Forbes, “is because a host of core patents such as apparatus for producing parts by selective sintering have either expired or are expiring within a year. “As a result, HP won?t have to spend huge amount of time and money on developing new technology and processes for discovering how to model 3-D objects. Furthermore, the high cost of consumables in 3D printing has been a major barrier to innovation in the field. However, HP claims to have solved a number of technical problems such as low quality print output and long printing time that have hindered broader adoption of the high-tech manufacturing process.” By the close of 2014, Gartner projects spending on 3D printing will have grown by 62 percent, tallying up some $669 million, with a split between enterprise spending at $536 million and consumer spending at $133 million.

sprout and hp

SEEKING ALPHA: Hewlett-Packard is getting into 3D printing in a big way. Although the 3D printing market is currently relatively small, the potential market will be enormous in the next two to three years. HPQ said during its announcement on October 29 that its product can print many times faster and cheaper than the 3D printers of competitors. What a great vehicle for driving future sales for the company in the future, and therefore moving the share price higher. The Machines HP?s 3D printers use Multi-Jet Fusion Technology which puts it way ahead of the competition. What the technology does is allow the creation of a three dimensional object with varying parts having different levels of stiffness, elasticity, texture and strength. Different parts can also have varying thermal and electrical properties. In addition, HP?s machines offer:

  • Ability to print multi-color objects
  • Speed of up to ten times faster over competition
  • Lower cost of ownership than the competition
  • Reduction of energy and waste
  • Higher levels of accuracy
  • Potentially the mixing of different materials into the same object

The markets are enormous. Businesses will use 3D printers to develop prototypes and for product design. Architects can design small scale buildings. Jewelers can replicate jewelry or create their own 3D designs of rings and bracelets. And this will all be done much more quickly and efficiently than in the past. The fact that HPQ is making this move into the 3D printing business caused the shares of pure play competitors, such as 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS), to drop after the announcement. But HPQ won’t be just taking market share away from competitors, it will be creating its own new markets. This is the type of business that will continue to drive the price of HPQ stock higher. Sprout Just in time for the holiday shopping season, Hewlett-Packard recently announced the release of the HP Sprout. This product could really spike sales for the company. It is a touchscreen PC with a combination 3D scanner, camera, and projector. Designed for the consumer market, it is the company’s initial Blended Reality product. A 3D modeling application will be available for the Sprout next year. The Sprout will carry the stock higher in the short term and the future multi-jet fusion printer products will boost the stock over the long term. See more at Seeking Alpha’s Hewlett-Packard Should Be A Leader In 3D Printing