The "Once in a Lifetime" Investment Opportunity
Yasir is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
A lot of investors like to invest in some of the hottest companies on the stock market. Stocks like Apple and Google are always making headlines, and a lot of investors believe that these stocks are revolutionary or giants in the tech industry. However, not many investors know that these companies are way over their "revolutionary" stages and are brands, rather than technological revolutions.
Remember the first microprocessor? Or the first personal computer? Those were technological advancements. The thing is that such technological advancements don't come every day, and they are more like "once in a lifetime" advancements.
3D printing is that "once in a generation" industry which, after reaching its peak after several years, will become the future Apple or Google. A lot of people do know about 3D Printing and what it's able to do; however, a lot of people still think that its a fad and that 3D printing will never be successful at a commercial level.
The same thing was previously said about Personal Computers and Printers. Previously, lot of people believed that PCs and printers would never be used in houses as personal devices, but they were proved wrong after every other individual started owning a PC.
3D Printing is just too big a technology to fail, and there are endless possibilities to what consumers and companies can achieve with 3D Printers. Here are some of the best stocks that you should definitely consider investing in for the long-term.
3D Systems (NYSE: DDD) is one of the biggest companies in the 3D printing space. It specializes in 3D Printing solutions, 3D Printers, and 3D printing materials. The company has a market cap of nearly $3 billion and is currently trading between $30 to $33.
As you can see in the graph above (source: nasdaq.com), 3D Systems' share price has been extremely volatile in the last 12 months, which is why not many investors have been able to capitalize on this opportunity. The volatility and the dropping share prices are only for the short-term, and I'm almost certain that the company's shares won't go anywhere but upwards in the long-term.
3D Systems showed nearly 50% revenue growth in its latest quarter; however, it just fell short of Wall Street estimates, which is why the company's share price dropped nearly 8%. What investors need to know is that there will be ups and downs in the short run, but the real returns will come after 3D Printing is fully adapted in the world.
Stratasys (NASDAQ: SSYS) is another "soon to be" tech industry giant as it manufactures 3D Printers, primarily for businesses. From the medical space to the aerospace industry, Stratasys caters to nearly all major industries. Stratasys, like other companies in the 3D printing industry, will continue to grow as the 3D Printing industry, as a whole, grows.
With a market cap of over $2.8 billion, Stratasys is currently trading between $72 to $75. As you can see in the graph (source: nasdaq.com), the share price has been rising after it fell in February due to negative commentary on the company by some analysts.
Overall, Stratasys has been strong financially and its latest earnings report showed a revenue growth of around 23% year-over-year. Also, the company expects a further 30% revenue growth by the end of 2013.
Stratasys still manufactures printers for different industries rather than ordinary customers; however, the company will be able to expand as soon as 3D printing is adapted by small firms and individuals. Again, I won't be surprised if the company is not able to perform as well as expected in the short run, as it is a company in the "next" big industry
Dassault Systemes (NASDAQOTH: DASTY) is another hot company in the 3D printing industry. It doesn't manufacture 3D printers, but it is a 3D printing design and software company, which is absolutely crucial for the 3D printing industry. Basically, in this "razor and blades" model, the company fits in to the razors part, along with the printing materials. Without the software and the 3D modeling, the printing is of no use.
Dassault Systemes' latest earnings report showed strong performance. as the company's revenue grew 7% and EPS jumped 14%. Bernard Charles, Dassault Systemes' CEO, recently stated that the recent performance of the company was in line with its objectives as it acquired 20,000 new customers and reached a base of 10 million users.
The company is not only optimistic about the long-term growth in the industry, but is also optimistic about its near-term performance. As more and more companies are coming towards 3D printing as a mode of manufacturing, Dassault Systemes, with its new 3DEXPERIENCE platform, looks set to grow further in the near future.
The company, again, depends on how fast the 3D printing industry grows and even though its not a 3D printer manufacturer, it will be a crucial player in the next big technological advancement.
3D Printing is not new; however it still needs some time before it can be used at a mass level. Some people are calling it another tech bubble; however, the uses and possibilities of 3D printing are just too many to ignore. Opportunities like these don't come often, and this is probably the best time to invest in the industry as it looks set to become the next big technological industry in less than 5 years.
This soon to be trillion dollar industry is perfect for patient investors looking for massive gains in the future. If you missed out on investing in PCs or smartphones earlier, then this is that one more "once in a lifetime" opportunity to invest in.
Yasir Idrees has no position in any stocks mentioned. The Motley Fool recommends 3D Systems, Dassault Systemes S.A. (ADR), and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys 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!