The nanotechnology market is currently experiencing a promising stage of growth, making it an attractive space for first time and sophisticated investors.
From nanotechnology-based solar panels that increase energy efficiency to therapeutics which make use of nano tech in the biomedical field, nanotechnology investing has far reaching effects which are quickly transforming the world.
With that in mind, here the Investing News Network provides a brief overview of what nantoech is, a market overview, and the industry’s future outlook to help investors decide if investing in a nanotech stock fits their portfolio needs.
Nanotech stock: what is nanotech?
Lauded as the new industrial revolution, research and development into nanotechnology has significant implications for almost every industry. Nanotechnology is the manipulation of matter on a nanoscale. A nanometer is one-billionth of a meter, or approximately 1/90,000th the width of a single human hair. With the market expected to reach a staggering $75.8 billion by 2020, this microscale is producing macro returns for savvy investors.
Nanotech stock: market overview and outlook
In 2006, Lux Research estimated that revenues from products using nanotechnology would reach $2.6 trillion by 2014 (a staggering increase from the $14 billion that nanotech produced in 2004). These optimistic market predictions spurred a flurry of nano investing, including the launch of PowerShares Lux Nanotech Portfolio (NYSEARCA:PXN), an exchange-traded $89-million fund launched by Lux Research and PowerShares Capital Management.
Ultimately the PowerShares Lux Nanotech Portfolio didn’t live up to its initial promise. Despite predictions at the peak of the mid-2000s nanotechnology investing bubble, nanotech stock didn’t achieve the rate of growth that investors had hoped and, after primarily incurring losses since its inception, the fund liquidated in February 2014.
However, this news isn’t all bad. What has emerged out of a boom and bust market is an industry founded upon strategic long-term business plans, and in-demand innovative products. Many industrial firms receive steady revenue from nanotechnology products, which they re-invest in the market to drive innovation forward.
For example, nanotech giant 3M (NYSE:MMM) uses nanotechnology in its products destined for the dental, electronics, architecture and energy markets. Used in dental restoratives (like fillings, crowns, and orthopedic brackets) and brightness enhancing optical films (which make LCD displays bright and clear), nanotech has a diverse range of uses. Some of 3M’s core nanotech products include 3M™ Optical Films, Prestige™, Filtek™.
With an anticipated compound annual growth rate of around 16.9 percent to reach $12.83 billion by 2021–according to an Industry ARC report– the nanotech market appears to be a promising investment. Although the dramatic anticipated growth rates of the mid-2000s are a thing of the past, what remains is a solid market which consistently produces exciting, far-reaching, and potentially transformative innovation.
Nanotech stock: smaller market cap companies
With the nanotech market poised for significant growth over the next several years, smaller market cap companies are sure to benefit from this flourishing industry–including the ones listed here.
- Nano Dimension (TASE:NNDM,NASDAQ:NNDM): Founded in 2012, Nano Dimension is a research and development company with a focus on advanced 3D printing and nanotechnology based ink products. The company’s lead products include the DragonFly 2020 3D printer, as well as advanced nanotechnology based conductive and dielectric inks.
- Nanotech Security (TSXV:NTS): Nanotech Security has been around since 2009 and, since then, has created and put forth technology solutions in a number of areas that range from criminal justice, infrared, night-viewing, tracking security, and forensics. Its latest product is the KolourOptik, which is a nanotechnology platform for markets such as authentication, brand protection and anti-counterfeiting.
- Nanophase Technologies (OTCMKTS:NANX): Unlike the other companies listed above, Nanophase Technologies has been around for over two decades–since 1989, in fact–and provides engineered nanomaterial solutions to a variety of different markets, including surface finishing, exterior coatings, personal care, plastics, scratch resistance coatings and textiles.
- NanoViricides (NYSE:NNVC): NanoViricides was founded in 2000 and is a development stage company in nanomedicine technology. It is currently developing a nanotechnology-based biomimetic anti-viral medicine called “nanoviricides.”
Taking all of the above into consideration, perhaps investors can now better determine whether investing in a nanostock fits portfolio needs.
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This is an updated version of an article originally published on the Investing News Network in 2015.
Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.