3D printing is revolutionizing the medical field.
The market research firm IDTechEx says the medical and dental market for 3D printers will grow from $141 million today to $868 million by 2025. That's a 515% jump.
And we've found the perfect ETF to buy that will profit from this upcoming decade of growth.
First, a look at how 3D printing is changing the medical field as we know it...
Transforming Lives with 3D Printing
Earlier this year, a 12-year-old Chinese boy received an artificial vertebra made by a 3D printer.
Traditional surgery would have been complicated and risky. But with the artificial vertebra, the child is expecting a quicker recovery. He'll also experience fewer long-term side effects.
Money Morning's Tech Specialist Michael Robinson - a 34-year veteran of Silicon Valley - said this case is one of the most astounding accomplishments he's seen in his career.
"The operation underscores how 3D printing is already transforming medical care," Robinson said.
3D printers let doctors create custom implants that perfectly fit the patient's anatomy - and China's case isn't the only country using it.
Two years ago a 15-year-old girl in Sweden received a 3D printed artificial hip. Recently, a 22-year-old patient in the Netherlands had the entire top part of her skull replaced with pieces from a 3D printer.
"Given the diversity of examples, and these are just a few, the uses of 3D printing in science and healthcare appear virtually unlimited," Robinson said.
But picking an individual stock to capture this market's growth is tricky.
"This market presents investors with a profit opportunity and challenge," Robinson said. "The diversity of custom designs has slowed the rate at which one company can emerge as a clear 'pure play' on a major U.S. exchange."
That's why some of the most popular names in 3D printing are not good buys right now - like the biggest name on the 3D printing market, 3D Systems Corp. (NYSE: DDD).
DDD has been moving into the medical field by creating a Personalized Surgery and Medical Devices division. It now develops dental and anatomical models, surgical guides, implants, and prosthetics.
DDD has also been on the acquisition trail. It bought the patient-specific medical device company Medical Modeling Inc. in April. In July, it purchased Simbionix, which works with 3D virtual-reality surgical simulation.
While the company has a strong long-term outlook, its stock faces some headwinds.
"Despite these huge medical advances, DDD is under pressure, in part because of sector overvaluation based on perhaps a little too much industry optimism," Robinson said. "DDD fell recently after offering reduced guidance for its forthcoming third-quarter earnings. It's now off more than 62% year to date, yet still carries a 101.1 P/E ratio."
That's why Robinson recommends this ETF...
The Best Way to Play Medical 3D Printing Growth
The Robo-Stox Global Robotics & Automation ETF (Nasdaq: ROBO) is invested in the 3D market, but is diversified. It owns a position in the 3D printing player ExOne Co. (Nasdaq: XONE) but is not strictly focused on 3D printing.
"Consider that Investor's Business Daily ranked ROBO fourth on its list of the 'Five Most Intriguing Equity ETFs Launched in 2013' out of a pool of 140," Robinson said. "This novel fund holds a total of 85 stocks that give investors broad exposure to automation technology that will play an increasingly important role in the twenty-first century."
Here are some of the fund's more notable holdings:
- iRobot Corp. (Nasdaq: IRBT) is the fund's largest holding at 2.26%. iRobot is paving the way in robotic technology, and its stock is up 12% in the last month.
- Intuitive Surgical Inc. (Nasdaq: ISRG) is ROBO's second-largest holding at 2.21%. The company develops robotic surgical systems. Its "da Vinci Surgical System" has made the company a global leader in robotic, minimally invasive surgery.
- Accuray Inc. (Nasdaq: ARAY) is an award-winning radiation oncology company that offers treatment solutions for cancer patients.
"Trading at just $26, ROBO is a low-priced way for tech investors to position themselves for the 3D printing rebound," Robinson said. "The future of 3D printing is bright for improving lives... and producing profits."
ROBO stock has climbed 6.8% in the last three weeks, and has plenty of room to run from here. The stock has a 52-week range of $23.80 to $28.42.
More from Michael Robinson: When he read this statement from The Wall Street Journal, Robinson was floored. In fact, it may have been the worst piece of investing advice he'd ever seen...