How 3D Printing Will Change Manufacturing

Steve McDonald
by Steve McDonald, Bond Strategist, The Oxford Club

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In focus this week: how 3D printing will change manufacturing, a quiet tech company with a huge new market and the SITFA

3D printing will change how almost all manufacturing is done and alter the supply chain for many industries. Industries that make things as big as airplanes will be able to make parts as big as wings without cutting or bending any metal.

According to the Journal, the car parts business will make parts from their digital library and have no inventory. It will store all of its parts in digital form and make them as they are needed on site. Star Trek in our lifetime.

The CEO of 3D Systems Corp., a manufacturer of 3D printers, said in the article that printers cost as little as $500 and up to $1.5 million, can be placed anywhere and will eliminate the need for shipping and warehousing in most industries. That will reshape business as we know it and will create too many cost savings for this to not be a massive industry.

Military applications will allow replacement parts to be made in the field and will drive this market in its early years.

It will be a huge advantage for entrepreneurs who can manufacture ideas without the cost of a facility or distant manufacturing firms.

According to the Journal, EU companies, Arcam (STO: ARCM) and SK, are leading the business in printers for small metal objects, and Asian companies are in on the game, as well.

GE is using 3D printers for ultra sound applications, Pratt and Whitney for compressor blades and Honeywell for heat exchangers.

Boeing is using it to make 300 parts for its aircraft.

This industry is in its infancy, there are still issues about affordable raw materials, but it will drive almost all manufacturing in the future and it must be a part of every portfolio.

 A Quiet Tech Giant

NCR is the world’s leading supplier of ATMs. I don’t know about you, but I don’t know how we lived before them.

This isn’t a leading edge technology play, but it’s in virtually every bank, mall, hotel and street corner, and according to the Barron’s they pay for themselves quickly.

According to Barron’s, NCR is the play because of their ability to deliver real cost savings in a number of markets and they’re the technological leader in the business. NCR currently derives half of its profits in North America and the rest in Asia, the EU and Latin America.

They’re looking at compounded annual growth going forward of 15% to 20% and recently upped their EPS forecast.

According to the Barron’s article, NCR has 50,000 ATMs in banks in just the U.S. and has a new market of another 175,000 more in smaller regional and local banks, and ATM growth in Asia and South America is expected to be explosive

RBC has a $28 target on the stock and projections put the price at $59 per share from its current $23.

The company also has big growth opportunities in self-check out applications in food markets and in the emerging market of travel for self-check out at airports and rental cars kiosks.

Most of the areas NCR has dominance in are in their infancy and NCR will, as it always has, work its way into all of them and stay on top.

This is hardly a state-of-the-art play, but it’s one with a huge market that’s constantly growing.

Finally, the SITFA

This week it goes to all those engineers out there who have been killing themselves trying to beat car thieves with new gadgets that are supposed to make it harder to steal cars.

The problem, thieves adapt.

Despite advances with coding access, touch starts, break away gear shifts and steering columns to prevent forcing a car into gear, thieves are doing a good job of keeping up with any technological advances.

Manufacturers have made headway with some of the newer designs; on-board GPS to track thieves, electronic keys that know their owners, electromechanical steering columns. But thieves still got $4.5 billion worth of cars last year.

Car thieves’ answer to all these devices designed to stop them. Forget about it, now they just use a tow truck and take your car where they can dismantle all the prevention devices.

Stranger yet, the most-stolen car, 1994 Honda Accord. Nobody ever said car thieves were discerning. Slick, but not discerning.

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