Wherever there is talk of the digitization of the economy and Industry 4.0, one technology has been unavoidable for some time now, namely 3D printing. The manufacturers of the new generation of printers are stumbling over ever new potential applications, promising the segment high growth. Yet the shares of these firms have had a real rollercoaster ride in recent years. Precisely because of this, with a view to risks and opportunities now is an auspicious time to enter the market.

Almost all of us have a regular computer printer at home. But how about having a 3D printer, which you can use to print nails, screws, plates, cutlery or that missing Lego brick and the other little things in everyday life quick as a flash? No wasted time standing around in lines at the DIY store to pick up spare parts; even auto and airplane parts can be made with 3D printers. The private 3D factory for the living room has now become affordable and is as easy to use as a conventional ink-jet printer. Only a 3D printer doesn’t use ink, but plastic, which is heated to several hundred degrees and formed into an object in various layers. Today, they can even produce 3D items made of glass, metal or ceramic.

Diverse application options

Years ago making such products was the domain of scientists and inventors, who researched 3D-printing production processes in so-called fab labs. Numerous universities experimented with the method. The result is diverse potential applications today, and the success story is surely not over yet. “The new technology will first gain market relevance in the field of medical technology,” comments economic analyst Terry Wohlers with confidence, who has followed the technology’s development since 1988. Companies such as Arcam AB from the Netherlands use 3D printing to produce artificial hips that are precisely adjusted to the recipient’s body and more than two kilos lighter than conventional prostheses. Yet in other sectors too, such as the aerospace and automotive industries, 3D printing is frequently employed to manufacture prototypes.

Demand primarily from Asia

The next step however is now industrial pre-series and series production, which is expected to lead to high growth in the segment. “Ever more companies are now also using 3D technology to manufacture end products,” according to Andreas Müller, Partner at the professional services firm EY (formerly Ernst & Young), which recently compiled a study on the prospects of the sector. Recently, for example, a component from a 3D printer was fitted in the engine of a passenger aircraft. EY expects rapidly growing demand for the new technology particularly from China and South Korea. The firm anticipates average annual growth of 25% for the next five years.

3D printers for home use

Alongside industrial applications, 3D-printer business for private households is an important growth driver. Some machines cost less than 1,000 dollars and are enjoying strongly rising demand. According to Wohlers’ 2016 report – the standard industry reference – last year global sales shot up by more than 70% to approx. 280,000 printers. No doubt private users want to not only replace that missing Lego brick or screw, but also benefit from the numerous applications of 3D printers.

Rollercoaster ride in the stock markets

After the ups and downs on the stock markets, the topic is now once again attracting investor attention, among other things because of late several manufacturers of 3D printers have been bought out and others are currently being considered targeted for takeovers. For example, US corporation General Electric has been engaging strongly in this future market and has acquired majority stakes in both Germany’s Concept Laser and in Sweden’s Arcam. At present, sector heavyweights 3D Systems, Stratasys and EOS together still hold some 70 percent of the market and are themselves repeatedly focusing on smaller, specialized service providers. After valuations tripled in the 2011-2014 period, prices have since fallen sharply, meaning that in terms of risk/return profiles there are now interesting entry opportunities.

As soon as the technology has become established, all the dog and Christmas lovers can look forward to immediately recreating that one missing Lego brick at the press of a button. The 3D printer will of course not be able to do anything about the dog’s tummy trauma, but in the medium term, who knows?

Giles Keating
Giles Keating

“Perfect position in Hype Cycle! Share prices of 3D companies seem to follow almost perfect “hype cycle” with a bubble about 2 years ago that burst. We are now way below peak and if the hype cycle is followed, we would now move into a long period of years of secular uptrend.”

Valerie Plagnol
Valerie Plagnol

“They even built a house on 3D printing in China! I’m sure, 3D printing is a great tech for medicine and distant production which need to be instantanous, reliable and flexible production and for remote places.”

Zeitgeist allocation

Published on 23.12.2016

Description Instrument ISIN TER Allocation
Ansys Inc Stock US03662Q1058 0% 9,00%
Autodesk Inc Stock US0527691069 0% 8,00%
Arkema Stock FR0010313833 0% 8,00%
Materlialise NV Stock US57667T1007 0% 8,00%
Proto Labs Inc Stock US7437131094 0% 7,00%
Praxair Inc Stock US74005P1049 0% 7,00%
Stryker Corp Stock US8636671013 0% 7,00%
SLM Solutions Group AG Stock DE000A111338 0% 6,00%
Organovo Holdings Inc Stock US68620A1043 0% 6,00%
Faro Technologies Inc Stock US3116421021 0% 5,00%
Groupe Gorge Stock FR0000062671 0% 5,00%
Nano Dimension Ltd Stock US63008G1040 0% 5,00%
Stratasys Ltd Stock IL0011267213 0% 5,00%
Voxeljet AG Stock US92912L1070 0% 5,00%
ExOne Corp Stock US3021041047 0% 5,00%
Conformis Inc Stock US20717E1010 0% 4,00%

Index performance last 12 months: 

+4,76%
Start now with Werthstein Invest
START INVESTING NOW
Do you have questions?Talk to us in person.

More Zeitgeists

MORE
Northern Lights

Ignored and undercooled

Europe, for many investors, is Germany, France or the Netherlands. But Finland or Denmark? These are just blank spaces on the map for many investors. This is a mistake, as shown by a quick glance at the core data of the countries, because most of them have found a lucrative niche in the global economic structure via an unusual combination of state and economy. It pays off.

eHealth

By iPhone to iDoctor

The next time you consult your physician may be by e-mail or Skype? This is a long way off for patients in Germany: First the phone call, then the diary entry, then the waiting room. And only then the consultation. Many countries are technologically so far advanced that things could be quite different. And investors are fighting for those companies that will enable medical care 2.0.

Green Yield

Supporting investors and the environment

Floods, drought, tsunamis, the Munich Re study lists them all and carefully tots the natural disasters up. And concludes that the number of “damage events” between 1980 and 2015 has almost quadrupled. These statistics are by no means about surprising exceptions for the figures are steadily climbing, or so the re-insurers noted in March 2016. At first sight it the politicians who must to act, for example by introducing international treaties and agreements in order to brake the global warming underlying this process. That said, corporations must also act as their production processes contribute to the warming. And the more the companies rethink things, the better for their investors, too. A linkage that is becoming ever more important.

Want to stay updated? 

 

Subscribe to the free Werthstein newsletter