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Hawk’s Nest

Materialse (MTLS) Bull Spreads

by | Oct 22, 2020

Materialise NV (MTLS) name that doesn’t see very much activity at all in the options market but spread yesterday sold 1,000 November $40 puts to buy the $50/$60 call spread 1500X to open. MTLS has less than 300 options in open interest total, so a trade that stands out by volume. Materialise is a Belgium-based provider of 3-D printing services with exposure to aerospace, automotive, CAD, consumer goods, healthcare, industrial and more. MTLS mostly focuses on software for manufacturing 3D goods but they also do full-service production for companies looking to execute specific builds and manage their files for printing. The latter includes manufacturing for prototypes, design and execution. They’ve leaned heavily into areas like medical processes where their Mimics software is being used to design and plan surgeries like Transcatheder Mitral Valve Replacement, a procedure that is expected to grow significantly in the coming years. Their business is also highly tied to electives surgeries like craniomaxillofacial and orthopedic applications which have rebounded sharply since June. The did warn that Q3 could be weak as spending on new tech within hospitals and clinics slows considerably due to COVID uncertainty but if these electives came back strong, MTLS would also likely remain strong. MTLS does expect COVID to be a big driver for continued adoption of 3-D printing services in hospital as Point-of-Care becomes more important. They noted in August, “Many hospitals have used the 3D printing facilities during the pandemic in order to support their internal supply. Materialise Medical is well placed to take advantage of this increased interest in the following years.” The $2.74B company trades 18.5X cash and 12.7X EV/sales with mid-teens growth.