3D printing was once one of the hottest sectors for investors looking for the next stocks to buy. While the technology was impressive for what 3d printing could do, it was still in its early stages. With the inflated prices of 3D printing stocks, many investors sold off or decided to wait to enter the hot market.
After several years, 3D printing stocks appear poised for a comeback as they enter new areas and show the world what they are capable of. Stories pop up every day showing investors that companies are using it to make shoes, automobile parts and even create whole houses.
Years ago, the thought of using a printer to make parts for cars, create houses, or a pair of shoes would seem ridiculous. Technology has bought these ideas to life and there are stocks to buy to take advantage of these new developments.
Depending on who you ask, the 3D printing market is gearing up to be worth more than $12 billion by the year 2020. Some analysts call for the 3D printing market hitting more than $20 billion in the next five years.
With 3D printing stocks down from their peaks of the last five years, now may be the perfect time to put a little risk in your portfolio. There are multiple pure play 3D printing stocks and also several technology companies with ties to the 3D printing market. Here is a look at three stocks to buy to capitalize on the growth coming in the 3D printing sector.
3D Printing Stocks to Buy: Stratasys, Ltd. (SSYS)
One of the largest 3D printing stocks is Stratasys, Ltd. (NASDAQ:SSYS) with a market capitalization of around $1 billion. The company is my top pick in the sector thanks to some recent deals with large corporations and a possible technological advancement that sets it apart from the field.
Stratasys counts Boeing Co (NYSE:BA), Airbus SE (OTCMKTS:EADSF), Ford Motor Company (NYSE:F) and others as customers of its technology and products. It is the relationship between SSYS and Ford that make this one of the best stocks to buy. The new Stratasys Infinite-Build 3D printer will be used by Ford in a test to see if it can create parts for automobiles in an affordable manner and still hit production goals.
The Infinite-Build could help Stratasys distance itself from competitors in the manufacturing market that has attracted 3D printing companies. Unlike conventional 3D printers that build layer by layer in an upward fashion, this printer works sideways, allowing larger objects to be created up to any size. The printers use a proprietary micro pellet powder, similar to sand, which could also be a good revenue stream for SSYS.
This is a huge deal for Stratasys as it has the potential to show off the new large scale printer. Ford will be able to make parts that weigh less than metal and also can help customers create their cars in a quicker, more affordable manner. While this is the first automobile company to run a trial on the new Infinite Build printer, it could bring in a steady stream of revenue opportunities by signing up more clients.
Fourth-quarter revenue of $175.3 million was up only 1.1% for Stratasys. Operating profit did rise 2.5% in the quarter and earnings-per-share also came in well ahead of the prior year. The company gave full-year revenue guidance as a range of $645 to $680 million and EPS in a range of $0.19 to $0.37.
3D Printing Stocks to Buy: Materialise NV (ADR) (MTLS)
Materialise NV (ADR) (NASDAQ:MTLS), a Belgian company, went public in 2014 to take advantage of a hot public market for the trend. Shares of Materialise priced at $12 and have since fallen to their current levels of $9 a share. The company has a market capitalization of $426 million and remains a good way to invest in the upcoming return of growth to the 3D printing.
MTLS covers several areas of 3D printing, making it one of several prime 3D printing stocks to buy. The company is a leader in additive manufacturing and a major partner of large corporations like Siemens AG (ADR) (OTCMKTS:SIEGY) trying to improve their operations through 3D printing.
The recent fiscal year saw strong growth for Materialise, which makes this 3D printing stock a strong consideration for those who need exposure in their portfolio to the sector. Fourth-quarter revenue increased 12.3%, with all three major business segments seeing increases. Manufacturing led the way with a gain of 19.4%, followed by software (+10.6%) and medial (+5.1%). For fiscal 2016, industrial revenue was up 41%, while medical (+33%) and software (+26%) also saw strong gains.
MTLS has been a player in the market for years and now operates as one of the top software innovation companies in the sector. Materialise has 95 patents, with an additional 165 currently pending. Revenue continues to increase for MTLS and investors should continue to be rewarded as the company’s sectors all see strong growth.
3D Printing Stocks to Buy: 3D Printing (The) ETF (PRNT)
In July 2016, a 3D printing exchange-traded fund was launched to give investors access to a basket of publicly traded 3D printing stocks. The 3D Printing (The) ETF (BATS:PRNT) from Ark Funds gives investors an easy way to invest in several publicly traded 3D printing stocks and also expose their portfolio to several international plays on the market as well.
So while this isn’t necessarily a stock, an ETF trades just like one and gives investors access to the growing market.
PRNT holds a basket of 42 different stocks, with hardware representing 50% of holdings. Investors will recognize U.S. stocks like HP Inc (NYSE:HPQ), Stratasys, 3D Systems Corporation (NYSE:DDD) and Organovo Holdings Inc (NASDAQ:ONVO), which are all in the top ten holdings. Other popular names like Microsoft Corporation (NASDAQ:MSFT), General Electric Company (NYSE:GE) and United Parcel Service, Inc. (NYSE:UPS) are also part of the fund’s holdings. Investors also get exposure to international names and smaller lesser known 3D printing plays.
PRNT is a good option for investors looking to capitalize on the growth of 3D printing, but are unsure where to put their money. The fund offers diversification among the 3D printing stocks selected and also among the size of the stocks. Small-cap stocks make up 44% of the fund and micro-cap stocks represent 13% of the fund, putting a heavy emphasis on small growing stocks.
As of this writing, Chris Katje did not hold a position in any of the aforementioned securities.