LONDON, January 28, 2013 /PRNewswire/ --
EmergingGrowth.com, a leading digital financial media company,
Reports on the Next Hot Technology and 3D Systems, Proto Labs, and Stratasys.
One of the highlights of the 2013 Consumer Electronics Show
(CES) was an array of 3-D printing systems. While the concept is
not new, dating to the 1980s, it has become increasingly powerful
in recent years. Some now feel that it has the ability to
fundamentally redefine many aspects of the global economy, changing
the way people obtain many of the basic (and not-so-basic)
household and personal goods that they need.
So what is it exactly? Put simply, a 3-D printer (the term comes
courtesy of two MIT graduate students
who in 1995 modified an inkjet printer to create a crude prototype)
is capable of rendering virtually any object from a set of digital
schematics. At first this might seem like the same work machine
shops have been churning out for decades, but there is a
fundamental and very important difference: existing machining
processes create an object by removing material, such as turning a
steel bar to create a piston rod. In contrast, 3-D printing
adds material layer by layer to build-in effect sculpt-the
finished product.
Think about that for a moment, and it becomes clear that 3-D
printing is far more powerful than machining in many respects.
Machining cannot produce interior spaces; 3-D printing can do so
easily. Something as simple as a hollow sphere would be child's
play for a 3-D printer but impossible to machine using traditional
methods, to say nothing of something as complex as, for example, a
model of the human skull. Several specific technologies exist, with
the main differences lying in what method they use in the
"printing" process. Various forms of plastics are most commonly
used, but certain technologies-direct metal laser sintering
foremost among them-can be used with metals.
This technology has already proved a boon to design and
prototyping, and at sufficiently low price points-which are
coming-a 3-D printer in the home could easily be reality. Imagine
ending the need to buy so many basic products, instead
manufacturing what's needed from a supply of stock material.
So where are the investment opportunities? Three major public
companies in the 3-D printing space-3D Systems (NYSE: DDD),
Proto Labs (NYSE: PRLB), and
Stratasys (NASDAQ: SSYS)-already have market caps north of
$1 billion thanks to rising share
prices and stratospheric P/E ratios. (3D Systems is trading at a
P/E of 100.37, Proto Labs at 51.50,
and Stratasys at 101.90.) Despite the promise of the technology,
current pricing is certainly not inviting.
Fortunately for those who favor emerging companies, an IPO is
coming. Pennsylvania-based ExOne
(projected NASDAQ: XONE), in business since 2003, announced on
January 9 its intent to raise as much
as $75 million in this offering. With
its most recent revenue at $19
million, it seems likely that ExOne will start out in the
small-cap neck of the woods, though at present its S-1 (which you
can view on the SEC website) does not state how many shares will be
issued.
There is an even smaller candidate already in the public
marketplace, but it is listed on the OTC (though its share price in
the upper 20s hardly qualifies it as a penny stock). Arcam AB
(PINK: AMAVF) has a market cap that currently hovers around
$100 million. Based in Sweden, it has a U.S. subsidiary and boasts a
client list that includes Boeing, Airbus, and NASA. Though it lost
money in 2008 and 2009, with diluted normalized EPS of -7.13 and
-2.65 respectively, earnings climbed to 0.50 in 2010 and 1.50 in
2011. (Results for 2012 are not yet available.)
Expect to see more companies in this sector come to market as
the technology's potential builds. Even
Proto Labs, with a $1.03
billion market cap, just went public in late February 2012. There are naysayers, of course,
with criticism typically aimed at the cost of the raw material used
by these machines and the requirement for detailed schematics to
actually generate an object. But the raw material would be expected
to come down in price with wide adoption of this technology, and
the "blueprints" for any number of objects could be sold just as
computer software is. And just as has happened with computer
software, the community would likely soon step in with both
freeware and an Etsy-style "cottage industry" marketplace.
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