There are some people that say 3D printing is the stuff of science fiction. Others say limited applications and prohibitive costs make it a dream of the far reaching speculator. Lately, there has been signs of interest mega capitalization companies that not only give credibility to these stocks, it might make it less of a speculative play.
About a year ago a video on YouTube went viral. It was the first 3D Printed Metal Gun. We have seen the plastic guns and replicas of an AK-47, but the metal gun was the first of its kind. This more or less took the sector from being a 'toy maker' to a 'supply chain component.'
A simple search of '3d printed' on YouTube delivers more than 500,000 results, so its fair to say that this craze might just be getting started.
Interest From Big Parties
There have been several recent reports about multi billion dollar companies partnering / buying / utilizing the 3D printing technologies to stay ahead of the curve in their own industry.
At the Code Conference in Rancho Palos Verdes, the CEO of Wal-Mart (WMT) noted that he was interested in the space. The obvious use for WMT would be to print replacement parts for broken or damaged items to lower return costs. Installing a printer in each WMT would allow customers to print their own parts as well, and that would end up driving foot traffic into the stores.
A Circulated Story
A radical story broke a few weeks and a great video was published by the University of Pennsylvania. The headline of 3D printed blood vessels sent shares of Organovo Holdings (ONVO) up by more than 4.4% on July 1.
Today there was further confirmation that this story is not just pie in the sky. Janssen Research and Development LCC (a division of Johnson and Johnson (JNJ)) entered into an agreement with Organovo to evaluate the use of 3D bio=-printed tissue in a drug discovery setting, outside of the Company's work in 3D liver tissue for toxicity testing.
This sent shares of ONVO soaring more than 20% before the market opened, but my mid-day shares have fallen back to a mere 8% gain.
The partnership with a JNJ gives credibility to a part of the 3D printing segment that was seemed probably the most outrageous by the naysayers. Given that there haven't been any results released, just the fact that JNJ is taking it very seriously shows that there is more here than just a good story.
The Next Bubble Jet?
Maybe that headline should annotated with some 'tongue in cheek' indicator. 3D printers at a cost of nearly $500,000 will take a long time before they are as ubiquitous as the Bubble Jet printer was in the 90's, but it will be one day.
Hewlett Packard (HPQ) is often discussed as the next company to get into the 3D printing game. As a leader in the printing space, it only seems logical that they address the high end of the market.
Predictions have been made that the company will enter the market this year or next, but it appears as thought that sort of move is inevitable. When a major tech firm throws its hat in the ring, the naysayers of this technology will likely change their tune.
Recent Research Note
Finally, earlier this week Piper Jaffray had a note out about the 3D printing stocks, suggesting that given the recent pull back, now would be a good time to get into the space. Here is a short list of stocks in that space along with current prices:
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Brian Bolan is a Stock Strategist for Zacks.com. He is the Editor in charge of the Zacks Home Run Investor service, a Buy and Hold service where he recommends the stocks in the portfolio.
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
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