How To Profit From 'The Next Trillion-Dollar Industry'
What do a small manufacturing company, a major Internet powerhouse and a West-Coast robotics firm have in common?
According to Andy Obermueller, they're all sitting on some of the biggest ground-breaking technologies of the next 10 years.
As Chief Investment Strategist for Game-Changing Stocks , Andy's job at StreetAuthority is to hunt down companies with the potential to produce the next life-changing investing idea. By finding and investing in these stocks before they become the "next big thing," Andy (and his subscribers) has been able to lock in enormous gains from some of the market's biggest game-changing trends.
Take one of Andy's most recent "game-changers" -- Gogo Inc. (Nasdaq: GOGO ) , for example.
Andy originally brought the $2 billion tech stock to his subscribers' attention in August of this year . At the time, Andy thought the company's in-flight Internet connectivity technology would take the airline industry by storm.
Turns out he was right... Just two months after his recommendation, Gogo shocked the market by reporting third quarter revenue of $85.4 million -- smashing analyst estimates of $76.8 million.
The announcement sent Gogo on a triple-digit rally...
Simply put, in his most recent essay -- " The 5 Unstoppable Game-Changers of the Next Decade " -- Andy identified five investing trends (and the companies behind them) that could revolutionize the way we live our lives...
'The Second Industrial Revolution'
Take one of Andy's "game-changing" trends, an anomaly we refer to around the office as "The Second Industrial Revolution."
In short, "The Second Industrial Revolution" refers to the emergence of a "science fiction" like machine that allows people to create literally whatever object they want -- almost entirely out of thin air.
While it might sound like something out of a Star-Trek movie, this feat is entirely possible thanks to a developing technology called 3-D printing. Andy explains the logistics in his recent report:
Here's how it works...All you do is pull up an image on your computer... and hit print.Almost like magic, the 3-D printer creates a replica of whatever you want. Whether it's a wrench, croquet mallet, or guitar, the machine will create one that's accurate within a tenth of a millimeter.
As it stands, many automobile and aerospace manufacturers currently use 3D printing to generate prototypes for parts and other pieces that may be used in the construction process.
But considering this technology is still in its infancy, think of possibilities...
Some experts predict that soon we'll be able to create working firearms... customized prosthetic limbs... and even edible goods like food simply by downloading an image onto a computer then printing it using a 3D printer.
The secret is a highly specialized process called stereolithography. In using this patented technique, 3D printers can utilize computer programs to build three-dimensional objects by attaching slivers of thin material together in a pre-designed shape.
To be fair, this technology is nothing new -- people have been using computers to create objects since the first 3D printer was invented in 1984. However, due to their costs in the past, they were so expensive you would only find them in research labs.
But that's starting to change... and quickly.
The Next Trillion Dollar Industry
As technology improves, companies working in the industry have undergone a massive endeavor to make 3D printers an affordable household good. Today you can buy a brand-new 3D printing kit for as little as $299 on Amazon.com.
Those efforts have helped boost sales of 3D printers over ten-fold in the past five years. According to recent figures, in 2007 there were only 66 3D printers sold in the U.S. By 2011, that number reached 23,265 -- a 35,000% increase.
The rapid surge in popularity has led The Economist to call 3D printing the next technology to "change the world..." comparing it to developments like the steam engine and the printing press. Businessweek also commented, declaring that 3D printing could potentially create "The Next Trillion Dollar Industry."
Andy agrees... In fact, he has been bullish on 3D printing companies since he recommended 3D Systems (NYSE: DDD ) to his Game-Changing Stocks subscribers in January 2011. As he told his readers at the time:
[3-D Systems] is a serious player in 3D and exists outside the entertainment realm, bringing this technology to manufacturers looking to visualize their products. Its client list reads like a Who's Who of top manufacturers, from Porsche, Mercedes-Benz and Rover to Johnson Controls and Texas Instruments.
As pioneers in the industry and creator of the first 3D printer ever, 3D Systems has without a doubt been one of the biggest beneficiaries from the surge of popularity in this space. Since Andy made his recommendation nearly three years ago, the stock has surged over 450%.
Of the three companies listed above, Andy thinks 3D systems and Stratasys (Nasdaq: SSYS ) have the most potential to outperform in the coming months. While 3D systems has first-mover advantage, Andy likes Stratasys for its stronghold on the retail consumer market (Andy's full write-up on both of these companies is available in his report).
Of course, with investing nothing is 100% certain. Like most "game-changers" in their infancy, right now both of these companies are trading at heavy valuations relative to earnings. As of today's close, 3D systems was trading at a price-to-earnings (P/E) ratio of 160. Stratasys is still operating in the operating red, so it doesn't even have a P/E ratio.
But considering the potential of this technology, Andy thinks that will change as 3D printing becomes a mainstream affair. After all, the purpose of investing in game-changers is to get in on the ground floor. If what Andy forecasts is true, then right now investors have the chance to beat the crowd to what could be one of the biggest manufacturing revolutions of the next decade.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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