The best advances in technology are the ones that disrupt societies and change industries. Ideas like cloud computing, the Internet and even tablet PCs have changed the modern tech landscape. Early investors in these “game-changing” ideas can profit handsomely as this technology becomes more commonplace. And with the advent of ETFs like First Trust NASDAQ CEA Smartphone (NASDAQ:FONE) betting on future winners is easy.

One revolutionary idea that is still in early stages of growth is 3-D printing.

The technology promises to break ground across a variety of sectors and is quickly advancing. For investors, betting on the 3-D printing firms could be a huge long term portfolio winner.

Staggering Growth

While it may seem like something out of a Star Trek or Jetsons’ episode, the concept of pressing a button and getting an object out a machine is quickly becoming science fact. 3-D printing is here and it’s getting quite popular with manufacturing firms and soon it will be in our homes.

Essentially, these machines use a process where they "print" a three-dimensional object by depositing layers of material- usually ABS plastic- on top of each other. While the basic technology has been around for roughly 25 years, costs for the machines have dwindled. That’s resulted in torrid sales growth has manufacturers have begun using the machines.

According to tech researcher Gartner, worldwide shipments of 3-D printers priced under $100,000 will grow by 49% in 2013- with consumer spending on 3-D printing hitting $87 million this year. Meanwhile, enterprise and industrial users will spend $325 million on 3-D printers. However, as costs continue to plunge on the devices, Gartner expects that amount to double by 2015.

Already, both GE (NYSE:GE) and Rolls-Royce have begun using 3-D printing applications for their jet engines. While, retailers such as Best Buy (NYSE: BBY) and Staples (Nasdaq:SPLS) now carry home versions of popular 3-D printing models. Overall, the projected average annual growth rate for 3-D printing devices through 2017 will be an impressive 14%.

Yet, investors may finally have a good chance to participate in that growth. A recent negative analyst report on 3-D printer Voxeljet AG (NASDAQ:VJET) threw cold water on the entire sector. That caused share prices for all 3-D printing stocks- including those who are profitable and realizing sales growth- to plunge. Now could be the time to add the sector to a long term portfolio.

Printing Big Gains

Given that the growth in 3-D printing is just beginning, investors may want to give the sector a go. The brand new Robo-Stox Global Robotics & Automation ETF (NASDAQ:ROBO) does include some exposure to 3-D printing stocks like ExOne (NASDAQ:XONE). However, it’s a small percentage. That means betting on 3-D printing will require more individual stock selection.

And really the only two major players are 3D Systems (NYSE:DDD) and Stratasys (NASDAQ:SSYS). Both represent the leaders in terms of sales and product development. DDD has the largest patent portfolio as well as the largest operating margins in the sector. Not to mention, the widest selection of 3-D printer models.

On the flip side, SSYS has the largest market share in 3-D- controlling about 57% of the market. Stratasys also is the leading seller of smaller desktop 3-D printers that run for $500 to $4,000 each. That fact could make it the go to play as 3-D printing enters our homes. Either way, both stocks have surged 116% and 49% year to date, respectively. But more giants could in store as analysts price targets are still well ahead of current selling share prices.

The biggest wild-card in the 3-D printing industry could be Hewlett-Packard (NYSE:HPQ). According to CEO Meg Whitman, the traditional document printing firm is working on its own series of 3-D printers for both home and industrial use. That printer should cost less than $500 when launched. More importantly, HP’s huge distribution network and name recognition could give it leg up on the completion over the longer term. It will be interesting to see if Lexmark (NYSE: LXK) and Canon (NYSE:CAJ) follow suit.

The Bottom Line

3-D printing could be one of the most game changing technological advanced in a long time. For early investors, that could mean big profits in their portfolios. Both Stratasys and 3D Systems along with smaller rival Proto Labs (NYSE:PRLB) make ideal picks to play the growth.

Disclosure - At the time of writing, the author did not own shares of any company mentioned in this article.

Related Articles
  1. Investing

    5 Up and Coming Social Media Startups

    Although the days of Facebook's dominance aren't close to being over, here are some new creative platforms gaining traction on the worldwide web.
  2. Investing News

    Public Vs. Private Tech Valuations: What's Driving the Divide?

    The gross valuations over the past five years are more indicative of the market than the true value of the company itself.
  3. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  4. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  5. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  6. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
  7. Investing News

    Is Buffett's Bet on Oil Right for You? (XOM, PSX)

    Oil stocks are getting trounced, but Warren Buffett still likes one of them. Should you follow the leader?
  8. Investing

    3 Things About International Investing and Currency

    As world monetary policy continues to diverge rocking bottom on interest rates while the Fed raises them, expect currencies to continue their bumpy ride.
  9. Investing

    How Digital Payments Will Change Commerce in 2016

    The way we transfer and spend money is constantly evolving, and 2016 is poised to expand digital payments like we've never seen before.
  10. Entrepreneurship

    Digital Nomads in the Modern Economy

    Digital nomads compose a growing portion of the modern economy.
RELATED FAQS
  1. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reduce the number of times shoppers and buyers have to pay for goods ... Read Full Answer >>
  2. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  3. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  4. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  5. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  6. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center