Investing in Nanotechnology: FEI Co. (Nasdaq: FEIC) is the Top "Picks and Shovels" Play

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The word "nanotechnology" gets thrown around a lot but it still remains a fuzzy concept for most people.

From a self-aware, self-assembling grey goo that takes over the world in a Michael Crichton book, to Apple's (Nasdaq: AAPL) Nano music player or Tata Motor's (NYSE ADR: TTM) Nano car, it's hard to get a clear picture of what nanotech really is.

But as global World Economic Forum member and emerging tech guru Dr. Tim Harper explains, "Nanotechnology is to the 21st Century what chemistry was to the 20th Century."

Like plastics, computers, and the Internet before it, nanotechnology will change the world in ways that we can't even imagine now. That's how powerful the nano-world will become.

That's why every long-term growth investor needs to consider investing in nanotechnology. In terms of scale, the potential for investors is simply enormous.

That's why one company, FEI Co. (Nasdaq: FEIC) is on my list of "buys" as the top "picks and shovels" play.

The Miracle of Nanotechnology

So what exactly is nanotech?

It's a way of working with objects and materials at the atomic level, one molecule at time.

That means that in the near future, we will be able to custom design structures literally from the ground up, molecule by molecule, creating a quantum leap forward in medicine, materials, electronics, food, and fuels - practically everything we know of.

In fact, one of the biggest sectors where nanotech continues to have a huge impact is in drug development and drug delivery.

Recent nanotech developments include: cancer treatments without chemotherapy or radiation, long-dose treatment of diabetes with a single monthly injection, long-release or on-demand blood pressure medications, and textiles to build skin, bone or organs from you own cells.

Developments like these will invariably lead to big money

A recent report by Cientifica, a leading global emerging technology consulting firm predicts:

  • Nanotech-enabled drug delivery therapeutics is set to grow from a current value of $2.3 billion to $136 billion by the year 2021.
  • Global growth in the drug delivery market will be led by Asia with a compound annual growth rate (CAGR) of 32.5% between now and 2021.
  • And the total addressable market for nanotech enabled diagnostics will reach $53.6 billion in 2021 from $2.4 billion in 2011.
But drug delivery is just a small piece of the sector. The truth is nanotech is going to impact every facet of your life someday.

Because if you look into every industrial sector from textiles to materials to electronics to energy to defense to computing to telecommunications to packaging, nanotech is the fulcrum that is moving the world.

Investing in Nanotechnology: The Leading Player in the Game

For investors that opens up a whole new set of opportunities.

And if there is one thing this new field requires, it's the ability to see what's happening to these materials at these elemental levels.

That means high-powered microscopes and scanning equipment are the picks and shovels of today's (and tomorrow's) innovators.

And when it comes to these devices, FEI Co. is one of the leading players in the game.

A five-year price chart of FEIC is a simple story of how integral modern day microscopy is to the new economy. Since cratering around 11 in early 2009, the stock has had a steady rise to around $50 today.

As you can see, even as the world financial system crumbled, the world entered the Great Recession, FEIC kept chugging along.

Part of the reason was healthcare was a pretty stable base for the company as companies poured money into new R&D projects.

But FEIC also has a Natural Resources Business Unit that does imaging for energy companies around the world, including spotting shale reserves.

As cheap oil dwindles and unconventional oil and gas become the norm, FEIC's QEMSCAN imaging system will become even more in demand. In fact, earlier this month the company announced a fee-based agreement with a major oil service company to provide on-site automated surface logging using the QEMSCAN WellSite analysis solution for a U.S. customer.

So there's little doubt this unit will be pumping a lot more revenue into the company as the years progress. It has contracts in every major oil developing country in the world already.

As for business in general, revenue is up, margins are up and net bookings are up-- all in a terrible global economy.

New electronics, new textiles, new materials, new drugs, new energy -- FEIC will be in the middle of it all.

FEIC is a "Buy" up to $50.

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