Expert tips for investing in specialist manufacturers like Titomic
Link copied to
3D printer Titomic last week enjoyed a spectacular ASX debut. Here are some top tips from PacPartners Senior Analyst Andrew Shearer for investing in specialist manufacturers.
Titomic is described as an additive manufacturing specialist. What does that mean?
Additive manufacturing has been taking off and is forecast to continue to growth. It allows the manufacturing sector to produce new shapes and concepts where traditional forging and machining of metals might not work.
The result is a more adaptable product that is designed specifically for purpose for example an aeroplane bracket that holds the floor to the fuselage.
The best way to describe it is 3D printing for metals — the machine lays down a fine level of metal and punches it with a laser to essential weld the materials together.
How has the market grown?
The global market has quickly gone from zero to $6 billion and with it there has been an evolution of new methods that can be applied.
Five years ago you were lucky to have one stand on additive manufacturing at industry expos and now they make up a big part of the pavilion.
When the big players like Hewlett-Packard started moving into 3D printing we saw it really pick up.
What listed companies are in the space?
Titomic (ASX:TTT) was listed last week to join Robo3d (ASX:RBO), Aurora Labs (ASX:A3D) and Mach7 Technologies (ASX:M7T).
Each company does things a little differently and as the technology evolves we will see more stocks entering the market.
When you look at the chart for A3D they were a 20c stock that came up to $4. TTT stocks were floated at 20c and in less than a week have doubled.
There is a lot of interest in how the technology is developing. They were able to leverage research from the CSIRO to take on some of the bigger players in the market.
Are specialist manufacturers a good investment? What is your view of the broader tech sector at the moment?
I think retail investors can see this as a disruptive technology and a new emerging area with massive growth potential.
The global forecast is that will continue to be a growing sector. A lot of the research is coming from the larger end of town that can afford it but it’s mostly built on companies wanting to adapt.
More broadly in tech, there is still a lot of interest despite resources coming back.
It has dropped down in the past 12 to 18 months but I think people are now becoming more discerning. They are looking for more established ideas and are more selective on the ideas that they are investing in.
Whether tangible or not, I think people are happy to invest in apps or technology that might be cloud based or emerging. But they are looking to see potential revenue.
Andrew Shearer is a Senior Resource Analyst at PacPartners and has been involved in the mining and finance industries for 20 years. Coupled with geoscience and finance qualifications he has experience in the resources industry, from exploration through to production. He has been exposed to the global resources sector covering micro to mid cap resources stocks; from exploration through to producing companies, across a broad suite of commodities. Prior to moving into the finance sector Andrew spent over a decade working in the minerals exploration industry in technical and senior management roles and has developed a deep network of industry contacts across the resources sector.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.