3 Cool Tech Stocks That I’m Watching
Matthew is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Today’s products were yesterday’s innovations. Discovering who is innovating tomorrow’s products before anyone else does is a very profitable exercise. They key of course if deciphering what’s real innovation and what’s just a cool idea.
In in an effort to begin to separate the winners from the losers I like to start by adding companies to my watch list. While I might miss some upside during the company’s time on said list, true wealth building enterprises won’t be missed in totality. The following three companies are developing some really cool technologies that have caught my eye but I’m not ready to invest any capital from my “No Drip, No Mess” portfolio just yet.
3D Systems (NYSE: DDD)
One of the hottest concepts in technology today is 3D. Not only are we piling into theaters to watch movies in 3D but investor are piling into the stocks of both 3D Systems and their rival Stratasys (NASDAQ: SSYS) in order to profit from the 3D printing revolution. This technology is beginning to go mainstream and once it does early investors will reap a windfall.
The problem as I see it is that investors have already priced a lot of future growth into both of these stocks. 3D is trading at more than 60 times earnings and 40 times cash flow. Stratasys is even more expensive at 66 times earnings and 44 times cash flow.
Not only is 3D a bit cheaper but they’re making the bigger push into the home market with their Cube. It’s pretty pricey at $1299, but the ability to print your crying kids a new toy after it breaks could make it worth every penny. This could be a huge market or end up being a novelty. I’ll be watching until I begin to see which way the trend leans.
Google (NASDAQ: GOOG)
Wait a minute, wasn’t Google yesterday’s cool tech stock? The company that turned search into a multi-billion dollar business isn’t done innovating just yet. Whether it’s Project Glass or a self-driving car, Google is investing millions into more than 100 projects under development in their Google X Lab.
The fast money is long gone from this $243 billion enterprise, but that doesn’t mean that there isn’t a lot of growth still ahead. They have a lot of irons in the fire but only need a few to pan out in order to drive the company to new heights. I’m especially interested in their self-driving car as I think that it’s about time we start revolutionizing our transportation sector.
Tesla Motors (NASDAQ: TSLA)
One of the companies working diligently to revolutionize that sector is Tesla. Their Model S electric car is a spectacular luxury sedan with a spectacularly high price. They have several issues still to overcome from the slow production schedule to the range of the car to the lack of Electric Vehicle recharging infrastructure. Still, it’s hard not to be intrigued by the technology.
Tesla has set its sights on the luxury market but the majority of car buyers tilt toward the lower end of the spectrum. The big unknown is if they’ll start to work their way into that market and compete with the likes of a General Motor’s (NYSE: GM) Chevy Volt among others or not. The Volt has a starting price point of $39,145 versus the $57,400 that the Model S starts at.
Other than price there are a few other things to note. The Volt is a Plug-in hybrid while the Model S is a Battery Electric Vehicle and the Volt only has a 35 mile electric range against the 160 mile range of the Tesla. Consumers will make the final choice as to which if any electric vehicles become a game changer. I'll be watching to see if Tesla has the capabilities to become a household name.
Each of these three companies falls on different places of the risk spectrum but doesn’t mean their rewards are proportionate to their risks. Google has as much of a chance of doubling as Tesla but they don’t have the same worry of dropping to zero. All three companies will be fun to watch to see which cool technology really does go mainstream.
latimerburned owns shares of ddd (covered call). The Motley Fool owns shares of 3D Systems, Google, and Tesla Motors and has the following options: short NOV 2012 $35.00 calls on 3D Systems. Motley Fool newsletter services recommend 3D Systems, General Motors Company, Google, Stratasys, and Tesla Motors . 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.If you have questions about this post or the Fool’s blog network, click here for information.