Shares of 3D printing R&D company Sigma Labs Inc. (SGLB) have vastly outperformed the well-known 3D printer manufacturers over the last 3 months as the chart below indicates.
I believe the positive trend for shares in Sigma Labs will intensify over the next 3-6 months for reasons I’ll explain in this article.
Company Overview
Sigma Labs Inc. was founded in 2010 by high-level scientists from the world-renowned Los Alamos National Lab. The company develops advanced, real-time, non-destructive quality inspection systems for 3D metal printing and other advanced manufacturing technologies.
Headquartered in Santa Fe, New Mexico, Sigma Labs is a micro-cap development stage corporation with approximately 560 million shares issued & outstanding with a current market capitalization of just $76 million.
Key Product Launch To Meet Critical Industry Need
The rapidly evolving technology utilized in additive manufacturing is now moving the industry towards true manufacturing capabilities in what many are calling “The Next Industrial Revolution.”
However, 3D printing of high value, complex metal components used in the aerospace, automotive, medical, and defense industries requires assurance that quality parts are being produced. This critical need is directly addressed by PrintRite3D®, Sigma Labs’ proprietary and patented hardware/software solution that quickly assesses the quality of a part during 3D printing by using real-time data as opposed to waiting for costly post-process inspection (see PDF presentation).
Part inspection and qualification is a key focus for America Makes, (the National Additive Manufacturing Innovation Institute), with Sigma Labs now playing an influential role. In January, Sigma Labs was chosen by America Makes as part of a team established “For the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components, which technology is currently lacking within the industry.”
The America Makes project will generate up to $750,000 in revenue for Sigma Labs, and CEO of Sigma Labs, Mark Cola, stated in a press release:
“We are quite pleased to have been chosen along with our partners by the premier AM and 3DP association to participate in accelerating commercialization of our quality assurance technology.”
Sigma Labs Announces Partnership With Materialise Today
This is in addition to sales previously announced by Sigma Labs to a leading aerospace company.
Cash In Hand For Full-Scale Commercialization
In their 2013 10-K filing, Sigma Labs’ balance sheet shows strong improvement with $1.3 million in current assets and only $141,000 in current liabilities for a current ratio of 9.4. This is the strongest current ration in any 3D printing stock and Sigma Labs has no long term debt.
More significantly, Sigma Labs recently completed a private placement bringing in an additional $3.3 million in cash to the company, paving the road for full scale commercialization of PrintRite3D® to begin. CEO Mark Cola commented that the placement:
“Has now set the stage for Sigma Labs to enter a period of accelerated growth. This funding enables us to add key scientific and engineering personnel, and provides the ability to service our customers on a large scale and execute our overall plans for increased expansion in 2014 and beyond.”
Conclusion
It’s been a turbulent ride so far this year in 3D printing stocks, but shares of Sigma Labs have been outperforming the much larger, well-known companies in the last few weeks. I believe investors in the company see positive recent developments in Sigma Labs combined with their first mover advantage in addressing a critical industry need. I believe Sigma Labs’ partnerships and recent announcements with companies like GE, Materialise, Honeywell, Metronic Systems, and their work with America Makes “for the development of a commercially available, platform-independent Quality Assurance technology for high-volume AM production of aerospace components” are reasons why this little company has been outperforming. Moreover, I believe this trend will continue and is likely to accelerate as full scale commercialization of PrintRite3D® begins.
Disclosure: I own shares of Sigma Labs (SGLB). I have not been paid by Sigma Labs or any third-party for this article.