The world of innovative tech stocks has borne the brunt of a lot of this year’s uncertainty, as interest rate hikes have taken their toll. While a lot of tech firms across a variety of subsectors have fallen from heady valuations at the heights of the pandemic, some more niche companies like FARO Technologies (FARO) are still receiving bullish ratings, with FARO accessible in the 3D Printing ETF (PRNT).
The innovative tech ETF focuses on firms involved in 3D printing, from hardware and printing centers to software, scanners, and materials. PRNT is one of Ark Invest’s few passive products, tracking the Total 3D-Printing Index, including firms from the U.S., developed markets, and Taiwan.
PRNT holds FARO as its second-largest exposure, weighted at 4.3%. FARO, which recently received a bullish rating to buy from InvestorsObserver, is a notable firm within the world of imaging technologies, pushing the 3D, 4D, and 5D imaging markets forward.
The firm has relatively little debt and cash on hand, and having beat earnings expectations recently, it could be an interesting play in its tech subsector. FARO even recently acquired UK-based GeoSLAM, growing its mobile scanning capabilities and its scope in that part of the market.
With the last year having highlighted what happens when increasingly interconnected, globalized supply chains struggle, 3D printing can add some resilience. Firms that rely on significant outsourcing can adapt their processes to use 3D printing and prevent their work from being interrupted, which in a world threatened by geopolitical risks can be an important tool in a firm’s arsenal.
PRNT currently charges 66 basis points for its exposures, having outperformed the ETF Database Category Average with returns of 5.2% over one month compared to the category average of 2%. PRNT also outperformed the category average by 5% over three months.
Finding the right tech stock is challenging in such an uncertain environment, with the Fed still planning a number of rate hikes. For those investors excited about the investment potential of tech like 3D printing, PRNT can be the right innovative tech ETF for them.
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