3D Printing Investment Opportunities
3D Printed Guns Have Arrived!
Last week, a privately owned California-based "additive manufacturing" firm called Solid Concepts built the world's first useable, commercial-grade firearm using a process called Direct Metal Laser Sintering (DMLS).
To us laymen, DMLS is the holy grail of 3D printing.
The process sounds like something out of a science fiction novel: It involves a 200-watt laser melting grains of microscopic metallic powder into 20 micrometer-thick (.02mm) layers, one after another, allowing for extremely precise, fully automated-manufacturing of complex components from stainless steel, titanium, and a variety of alloys.
Since fabricating the world's first Colt 1911 clone entirely using DMLS, Solid Concepts has fired more than 500 rounds through in an ongoing durability test, using both mechanical shooting rigs as well as live human shooters.
All along the way, they've been making headlines — both for the controversial choice of object for this demonstration and for the amazing milestone the fabrication represents to the rapidly growing industry.
With all but the main spring and magazine built inside the DMLS device, Solid Concepts has proved it's possible to create a metallic component capable of withstanding more than 40,000 pounds per square inch of pressure — common to the breaches and barrels of semi-automatic pistols like the 1911.
3D Printed Gun Parts Withstand 20 Tons Per Square Inch
The fact that it was a pistol, according to Solid Concepts, was intended only as a proof of concept, as few other commonly recognizable devices are required to withstand pressures exceeding 20 tons per square inch as part of their normal function.
Test-shooters reported the pistol performed as well if not better than factory-made variants of the legendary 100-year-old design by famed American firearms designer John Browning.
Now, while all this might get some of the gun enthusiasts excited — or perhaps nervous at the prospect of a free-wheeling underground handgun-manufacturing industry sprouting up in North America...
Let me bring you back down to earth by adding that the equipment required to fabricate this pistol has a price tag of about $750,000. So it's not exactly cost-effective enough to become a serious concern for the nation's police departments.
The important takeaway in this story is that 3D printing has taken another major step in revolutionizing not just the nature of manufacturing, but also the nature of prototype fabrication — a process integral to the design of new products.
As a firm that specializes in this service, Solid Concepts couldn't have chosen a better way to demonstrate their prowess in the precision component fabrication niche.
The bigger message behind this milestone, however, is that 3D printing is maintaining a path to mainstream commercial acceptance.
3D Printing for Your Home: What's Out There Now
While Solid Concepts demonstrated the limitless versatility of 3D printing, another company by the name of 3D Systems Corp. (NYSE: DDD) is demonstrating the potential of the equipment as a product on a consumer-grade level.
Right now, 3D Systems offers three 3D printer models intended for the home-user market.
The models are priced from $1,300 for the entry-level Cube... to $2,400 for the larger, more advanced CubeX Duo... to $4,000 for the three color-capable CubeX Trio model.
While the entry-level model can only generate single-color objects no larger than several inches across, both of the more advanced CubeX models (shown above) are large enough to print out objects the size of a regulation basketball.
Granted, at those prices, these expensive toys aren't exactly going to be flying off the shelves come the holiday shopping rush...
But in a big way, these early consumer-targeted products are showing that 3D printing will have a place in the home electronics market as well.
Perhaps they will follow in the footsteps of the original dot-matrix printers, whose emergence on the market three decades ago changed forever the way home computer owners created written documents.
A wider market acceptance will follow, as the machines inevitably grow cheaper, user-friendlier, and more versatile.
3D Systems is one of the big names in the 3D printing market, with an $8 billion market cap and trading at $78 per share. The company is showing some astute foresight in engaging the consumer market this early in the game.
Brand-building when the industry is still in its infancy will undoubtedly help 3D Systems keep up its growth as it achieves popular acceptance with the highest volume consumers there are — amateur hobbyists, DIYers, and wannabe future Steve Wozniaks.
Eventually, when big players like HP enter the field (which they're planning to do in 2014), they will likely be playing catch-up to gain the trust of prospective retail buyers.
I should also mention that I find some of the smaller firms — like the relative newcomer to the field of publicly traded 3D printing firms, The ExOne Company (NASDAQ GM: XONE) — exciting, due to the growth potential and drive for innovation.
The bottom line is the potential for the 3D printing sector in terms of manufacturing, technological innovation, and profit is massive.
Yours in Wealth,
Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily and Energy & Capital. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.