Printing Great Returns
Callum is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Imagine if you had invested in Apple right before the smartphone boom, or Facebook back when it was just an idea in Mark's head. You would have made millions (or even billions) if you had enough cash. Many investors are spending all their time trying to figure out how to trade the fiscal cliff. While the fiscal cliff is important, what's even more important is how to invest in trends in our society. There is a big emerging trend right now that only some investors are aware of, but this trend could allow you to "print" out great returns.
I'm talking about 3D printing. 3D printing is where you use layers of metal, glass, plastic, ceramics, or even bio-ink, to construct objects from a digital design. Companies like 3D Systems Corp (NYSE: DDD) and Stratasys (NASDAQ: SSYS) are some of the forerunners in this new technology, which is used by companies like GE and Boeing to manufacture parts. 3D System's stock is up over 225% this year and Stratasys is up almost 140% this year. Those are some enormous gains, and the good times may keep on rolling. Staples recently announced it was going to offer 3D printing services inside its stores. The Netherlands and Belgium would be the first countries to see these services offered sometime in late 2013. 3D printers are expensive so most ordinary consumers won't go out and buy one for themselves (at least not yet), but large companies can buy them in bulk and offer their services (for a fee of course) to ordinary consumers. These services include making plastic models. In the new James Bond film Skyfall, they used a model of an Aston Martin that came from a 3D printer to do the stunts so they wouldn't have to ruin a real Aston Martin.
The Future (according to some) of 3D Printing
The thesis for why 3D Printing could be the future is this: Imagine you break an antique glass in a set of 6 and you need another. You don't want to look silly with only a set of 5, so you go over to your 3D printer and scan one of the other glasses. The printer reads the data and prints you another glass. Whew, crisis adverted. Or you lose a screw and you need another. Well, instead of having to go all the way to the store to go buy one you can print one inside your home at your convenience.
This is what the futurists are saying will become reality as the technology improves. You could either scan an object and print it out or you could go online and download the schematics for an object and print it out. Even bras have been made with 3D printing. A start up called Shapeways printed out a bra designed by Continuum Fashion made out of nylon 12. Maybe in the future you won't have to go to the store and pick out clothes; you can just look at them online and print them out in the comfort of your own home. While there will still be many who would want to go to the store to check out the clothing, even more would like the convenience of buying and making those clothes at home. On a more serious note 3D printers are also being used to revolutionize the healthcare industry.
3D printing has been successful at making prosthetic limbs and orthopedic products, and now visionaries are trying to see if you can "print" human tissue. Using a substance called bio-ink (which is made up of "living cell mixtures"), you can print out layers of tissue. While living organs are still decades away, one day we may be able to print out a new lung or heart to save lives and end the shortage of organs. This way victims of car accidents or terrible burns don't have to lay around all day waiting for someone to find them a transplant, hospitals will always be stocked. Plus, because you are inputting a digital design into a printer, you can modify it to fit anyone.
Household 3D Printers
3D Systems released The Cube, a 3D printer that costs $1,299. The Cube can print anything from plastic models (which are very detailed, that's why Skyfall used one) to gloves to shoes to belts to harmonicas. It does take several days to make some of these products, but in time that will be brought down. Here is a video from cnet that shows you what The Cube can do. Another thing 3D Systems offers is Cubify, which allows you to upload your own designs to the rests of the 3D printing community and The Cube comes with 50 free designs.
The future for 3D printing is very bright, and even though companies like 3D Systems and Stratasys are trading at lofty PE ratios they are still worth looking at. Numerous companies are investing millions in innovating this new printing technology on both the industrial and individual consumer level. While no one can be certain if things like organs will be able to be printed, there should continue to be significant innovations in the near future.
callumturcan has no positions in the stocks mentioned above. The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: short JAN 2014 $55.00 calls on 3D Systems and short JAN 2014 $30.00 puts on 3D Systems. Motley Fool newsletter services recommend 3D Systems and Stratasys. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!