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Payne's Picks

Can Stratasys and Flamel Make You Money?

By Payne's Picks FOXBusiness

Stratasys shares a 'buy' despite volatility?

FBN's Charles Payne, founder Meagan Hooper, retail analyst Hitha Prabhakar, Penn Financial Group founder Matt McCall, Divine Capital CEO Dani Hughes and FBN's Tracy Byrnes on the outlook for Stratasys.

Let’s talk about Stratasys (SSYS).

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I was one of the first guys to talk about 3-D printing on television, as the first time I recommended Stratsys to my subscribers was July 18, 2003 at $41. This is the second time on this show that I mentioned it. There’s a whole lot of negativity out there, a lot of goofy ideas for 3-D printing.

Make no mistake, this technology is revolutionary. It’s going to revolutionize architecture, automotive, commercial production, defense, dental, educational, entertainment and the medical industry. These guys are really brilliant. They made a lot of smart acquisitions, including MakerBot, Solid Concepts and Harvest. The MakerBot CEO is often a guest on Varney - he's a thinker, he’s amazing. When you spend time with him you feel confident owning this stock.

In the most recent quarter, revenues were up 54%. Gross margins were almost 61%, operating margins almost 23%. On the retail side, the company has entered into a deal with Home Depot (HD) to sell units on its website and certain brick-and-mortar stores as a pilot. I think it’s going to be big.

But the big money comes from manufacturing, the Street has modeled for 25% annualized growth for the next several years, but I think it's too cautious. It can be volatile, although less volatile as of late. 13% of the float is short. I think they are going to get crushed. Last time I mentioned it was lower I was looking for a breakout at $116, it did that.  I’d like to see it hold the support, and the next leg up will take it to $160.

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Now let’s talk about Flamel (FLML).

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Back in the day there was so much hype over nanotechnology. Nano is little microscopic stuff. Once the poster child for Nano, I think this company is living up to the hype.

In July 2002 it was $1.24, and went to $33.70 by September of the next year, then it crashed. Then it rebounded again to $35 in January 2007, then it crashed again. So it goes without saying, this is a high-risk idea. The company uses nanotechology for its various drug delivery systems including: micro pump (an oral release platform), liquitime for oral liquids, trigger lock for abuse resistance and Medusa hydrogel.

The company has nine products in development. One has been approved and marketed. The other one has been approved and should be ready for the market soon. I’m looking for the stock to breakout through $15, go to $20, but could go even much higher.

What do you think?

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