How You Can Benefit From a 3D Printing Boom
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Hobbyists, engineers, and even NASA are all talking about 3D printing. This new technology could enable rapid prototyping, custom sculpting, and even 3D-printed French fries, chocolate, or possibly pizza. A 3D printer might be an expensive toy for some, but the number of groundbreaking uses of 3D printing technology seems to grow weekly. Still, investors wanting to get in on the ground floor of this potentially revolutionary technology need to realize that each company involved in 3D printing has its own advantages and disadvantages.
Analyzing the major players
If you're interested in 3D printing, then you're probably at least somewhat familiar already with some of the major players in the industry. Three of the biggest are Stratasys (NASDAQ: SSYS), ExOne (NASDAQ: XONE) and 3D Systems (NYSE: DDD).
Stratasys produces 3D printers largely for industrial use, while 3D Systems focuses primarily on consumer-aimed models that can be used with home computers. ExOne produces printers primarily for industry, boasting some very impressive clientele for a company with its experience.
Stratasys has made several strategic acquisitions recently to add to its pool of technology patents, including the purchase of Objet in 2012 for $1.4 billion. These acquisitions gives the company more leverage in developing new 3D printing technologies which can then be developed into industrial-level printing solutions for companies and engineering firms.
The company was recently awarded a Gold Medal at the recent Concours Lépine International Inventions Exhibition for a patent it filed recently for a breakthrough prototype development material. The new material makes it possible to print a wide range of components, including mechanical, electrical and even optical parts, without having to switch materials for each piece. It could significantly reduce the time and cost associated with prototyping, since engineers could print multiple components from a single material instead of having to create each piece separately.
3D Systems has also made several strategic acquisitions as well, adding to its diverse portfolio of printing technologies through the purchase of companies such as Rapid Product Development Group. Currently the largest 3D printing company in the United States, 3D Systems enjoys a rather diverse product line based on a large number of patents that it holds.
While it is most commonly associated with the "Cube" 3D printer line, which is targeted at the consumer market, the company also produces printers and materials for industry and even medical use. The company's printers have been used to create dental applications, hearing aid components, implantable devices and even medical and surgical models using 3D Systems' Acura ClearVue ultra-clear plastic.
ExOne differs a bit from much of its competition, in that it doesn't work with plastic printing as a primary medium. The majority of ExOne's clients hail from places that require more durable printed parts such as the automotive industry and aeronautics manufacturers. Though it has sold a much lower number of printers than its peers, the company boasts major names in the industry as clients including Boeing, Caterpillar and Tesla Motors.
One reason for this is the fact that ExOne's printers typically use metals as their primary media, giving manufacturers the ability to create precision parts out of materials such as titanium without the waste that would normally be associated with the manufacturing process. The company also boasts one of the fastest print times with its industrial printers, making them fit for not only prototyping but also for full-out production of 3D-printed parts and injection molds.
These aren't the only companies in the 3D printing space, of course. They aren't necessarily even the most well-known. Makerbot is a smaller company with major brand recognition which has helped to not only make 3D printing more well-known but has also inspired the creation of 3D printing options in the hobbyist sector. According to a report by The Wall Street Journal, it may even be the next acquisition target for Stratasys.
LayerWise has also garnered a significant amount of media attention in recent years. The company created the jawbone replacement that garnered a significant amount of media attention in 2011, using a laser fusing method known as selective laser sintering to create the prosthetic from titanium powder. This printing method was initially developed by a company known as DTM, which was purchased by 3D Systems in 2001.
Choosing your investments
If you want to choose a 3D printer manufacturer to invest in, any of the three companies featured here could be good options.
3D Systems may be a slightly better option than Stratasys since it has the advantage of having a larger infrastructure and more diverse patent portfolio. 3D Systems is also poised to tap directly into the consumer market through a partnership with Staples, allowing it to take advantage of the "cool" factor as consumers see printers in stores and become more aware of 3D printing technologies.
If the MakerBot rumors prove true, however, then 3D Systems may lose that advantage to Stratasys. Of course, ExOne may have greater growth potential than either of these companies. It offers a wider range of printing options for industry and is positioned to take advantage of an increase in 3D printing use in manufacturing.
3D Systems is at the leading edge of a disruptive technological revolution, with the broadest portfolio of 3-D printers in the industry. However, despite years of earnings growth, 3D Systems' share price has risen even faster, and today the company sports a dizzying valuation. To help investors decide whether the future of additive manufacturing is bright enough to justify the lofty price tag on the company's shares, The Motley Fool has compiled a premium research report on whether 3D Systems is a buy right now. In our report, we take a close look at 3D Systems' opportunities, risks, and critical factors for growth. You'll also find reasons to buy or sell the stock today. To start reading, simply click here now for instant access.
John Casteele has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Stratasys, Tesla Motors , and The ExOne Company. The Motley Fool owns shares of 3D Systems, Stratasys, and Tesla Motors and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. 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!