In this Market Fooleryvideo, Chris Hill tasks Motley Fool analysts Jason Moser and Taylor Muckerman with answering a listener question on 3D printing and the state of the industry. Their answer may surprise you, but it explains where they expect the industry to really gain momentum.
A full transcript follows the video.
10 stocks we like better than Proto LabsWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Proto Labs wasn't one of them! That's right -- they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of May 1, 2017
This video was recorded on May 15, 2017.
Chris Hill:FromMatt Riley, "Haven't heardyou guys talk much about 3D printing in a while.I was wondering if you had any thoughts on companies, or the state of that industry."
Taylor Muckerman:Personally,I'm not investing in any of the 3D printing companies. If I'mgoing to benefit from it,GE(NYSE: GE) might be the first place I would look. They made a couple 3D printing acquisitions last year, up to about $1.5 billion. So they're using it in-house, and I'm surethey're going to work their way intoproviding additive manufacturing opportunities to some of their customers. Butfirst and foremost, they're trying to get in there and reduce their cost by using it to their advantage, rather than trying to compete in the 3D printing market. I think that's where I would bet thatit's really going to make a difference, internally for some of these giant manufacturing companies. I think 3D printingeliminated their consumer base business last year,because they just didn't see the future,and it was competitive, andthere wasn't a huge market for it.Stratasys(NASDAQ: SSYS)isstill trying to achieve some relevance in the consumer space. But I'm going to bet on thatin the giant manufacturing space,rather than trying to pick the winners who are trying to sell these machines to folksindividually.
Hill:Yeah,it's like the old adage in politics thatI think was born out of theWatergate era andAll The President's Men,"Follow the money." I think if you look at,maybe related to what we're seeing inartificial intelligence and home assistance and that sort of thing, where you seeIBMand thenAmazon, Google,Microsoftreallystarting to pour money into those homeassistants, that sort of thing. I think Taylor is right, to see the next move or wave of 3D printing, keep an eye on where GE is spending andwhere the other big manufacturers are spending.
Jason Moser:Yeah. Thetechnology is super cool, but theconsumer implications are not directly tied to us. We benefit fromAppleandFordand GE allusing that technology.
Hill:Butyou don't want one in your garage?
Muckerman:I mean,it requires some technical skill. There's a high hurdle for people,I can't imagine you can just go out and buy a 3D printer andplug it in and reading an instruction manual and then becranking out a bicycle in the next two weeks.
Moser:And let's think about the level of frustration inhaving a regular printer. How often do you hit print, and it won't connect, or it's out of ink, or out of paper. So consumer-wise, the applications aren't there. So it's neat technology. I'm thinking that you'll see some consolidation,like you were saying, Stratasys 3D Printing was the other company that isvery well-known. A company that doesn't get enough credit for the space isProto Labs (NYSE: PRLB),because Proto Labs was focused more on the design software andprototype production forsmaller businesses, individuals and whatnotmaking it very easy to get those types of3D printed products without having to actually invest in that infrastructure. And they'rebuying some more 3D printing capabilities, as well.
Muckerman:Themanufacturers turn to them,rather than trying to sell a product, they're selling a service.
Moser:Yeah. Andjust like we talked about before, I'llgo back to that Jeff Bezos quote wherehe talked about the toaster, you can just click and buy a toaster on Amazon and in less than a day, have a toaster at your doorstep, oryou could go buy a 3D printer, buyall of the things thatcomprise the toaster and then you print off the toaster, andthat's going to be pretty cool, it's probably going to take a while,it probably won't work as well --
Muckerman:And you'llburn your house down.
Moser:Yeah,maybe. There won't be a warranty on that toaster. So there's just no reasonto go through all of that other than to say, that'spretty cool technology. Like most things,like you said, follow the money. If this company isgoing to have the big money and the resources and the wherewithal to use those resources,they're going to.
Hill:In between the GEs and thosetypes of companiesspending and investing in this space, and using 3D printers, andpresumably at some point in the far future, whena lot of people have these in their homes, whenI think about an in-between step,I think about contractors. I think about people whose business is building homes. I thinkthat could be an intermediate step, whereyou see, whether it's through aHome Depotor on their own, if you see contractors saying, you know what? This isactually worth it to me,for the supplies that I'm using,I don't have to order and keep an inventory oflots of different sizes of screws and nails and whatever --
Muckerman:Pipe fittings, whatever, yeah.
Hill:Yeah. I can justcustomize what I need on the spot.
Moser:Themedical profession,I think that's another one where we'regoing to see more. Consumers aregoing to be the beneficiaries here, it'snot going to be something where you're going to go print off your hipreplacement. But there will be a company that's going to be able to do that infar less time for far less money. And so, yeah, again, youlook at the industries that are going to reallybenefit from this disruptive technology. It'snot quite like the internet, in thatthe internet has given us all of these opportunities in the public marketsbecause of the way it's disruptedvirtually everything we do. 3D printing technology iscertainly disruptive, but it'sjust not as disruptiveon the consumer front.
Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. the_motley_fool has no position in any stocks mentioned. Chris Hill owns shares of Amazon. Jason Moser owns shares of Apple. Taylor Muckerman owns shares of Amazon, General Electric, and Home Depot. The Motley Fool owns shares of and recommends Amazon, Apple, Ford, and Proto Labs. The Motley Fool owns shares of General Electric. The Motley Fool recommends Home Depot and Stratasys. The Motley Fool has a disclosure policy.