Top Gun was the highest grossing film of the year, Rock Me Amadeus by Falco was the #1 single of the year, Cosby Show was the top television show, and the Chicago Bears won the Superbowl. It was 1986, the same year a much lesser known event took place. An American engineer named Eric Drexler published a book titled Engines of Creation: The Coming Era of Nanotechnology. It was because of that book that we began researching how to invest in nanotechnology stocks way back in 2003.

(Disclaimer: A lot of articles well be linking to in this piece are very old. Back then, many of us were writing and producing research while attending full-time MBA programs. Consequently, some of it is riddled with typos, poor grammar, and the occasional cuss word. Nowadays, we employ professional writers to ensure that our research team writes prose as well as they can research. That was the idea anyways.)

The textbook description of nanotechnology is simply the study of anything that measures less than 100 nanometers. When you start to examine objects at a molecular scale, everything starts to change as quantum effects create unique properties in materials. For example, silver nanoparticles can act as antimicrobial agents that are effective in killing multi-drug resistant bacteria.

When you consider that the majority of biological processes occur at the nanoscale, its easy to see how broadly the term can be used:

Nanotechnology as defined by size is naturally very broad, including fields of science as diverse as surface science, organic chemistry, molecular biology, semiconductor physics, energy storage, microfabrication, molecular engineering, etc.

The term molecular engineering falls under nanotechnology, and under that you have things like synthetic biology and gene editing, the later of which is perhaps the most exciting emerging technology weve ever covered. Before we tell you why that is, were going to talk a bit about the evolution of nanotechnology over time.

Scientists from around the world successfully finished sequencing about 99% of the human genome, and Murica tried to piss off The Frogs by renaming french fries to freedom fries. It was 2003, the same year that George Dubyah Bush signed the Nanotechnology Research and Development Act. We had just started Nanalyze as a forum to discuss investing in nanotechnology, and within months we were being read by analysts from every investment bank out there. Exciting startups like Nanosys and Molecular Imprints were expected to transform the electronics industry. There seemed to be many stocks for investing in nano Flamel and Skyepharma were doing nano drug delivery, NVE Corporation was bringing us carbon nanotube RAM, and Altair Technologies was supposed to provide us all with the nanomaterials we needed to change the world. FEI Corporation and Veeco Instruments were supposed to be pick-and-shovel investments for microscopes that let us view things at the nano level. My, how things have changed.

Through the years that followed, we saw a proliferation of over-the-counter stocks trying to take advantage of naive retail investors, some of whom had never made an investment before in their lives. What followed was a series of battles with some of the more popular OTC companies. We would publish content debunking whatever bullisht they were selling, and they would fire back at us with cease-and-desists and sometimes even physical threats. We were invited to participate in a real boiler room in hopes we could be bribed. We wrote about that too.

Its difficult to describe just how badly investors were duped, even accredited investors who were sophisticated enough to see through scams. Countless penny stocks started to go under as the pump-and-dumps finished their last leg. Some tried to paint a picture of a technology that didnt live up to its promises, or a management team that couldnt quite get investors to believe in their grand visions. For the investors who lost all their money in nanotechnology penny stocks, did the real reason even matter?

In reading about companies that have failed, we can better understand how to find those that will succeed. Here are just a few examples of nanotechnology companies that never quite followed through on their promises:

When we moved to a publishing format in 2013, we again found the need to continue warning investors about the dangers of investing in OTC stocks or penny stocks. (Just dont do it, no matter what promises youre being told.) We also found that the same companies that were promising us nanomaterial breakthroughs in 2004 were still making those same promises nine years later. Anyone remember Startpharma and Vivagel?

Meaningful revenues are commercial validation for your technology, not grants. With the exception of some biotech firms, we just cant take companies seriously that continue to promise revenues and never deliver on them. Over the years, many promising nanomaterials have been on the cusp of commercialization but never seem to really quite get there. Remember carbon nanotubes?

Carbon nanotubes are tiny cylindrical structures made from carbon with superior properties found in no other material like strength and conductivity. They were expected to bring us space elevators and carbon nanotube random access memory (RAM) what Nanteros labeled NRAM. What we got were some specialty products and carbon nanotube materials but nothing to write home about. The worlds biggest nanotechnology company at least is was back in 2014 is a Russian firm that sells their TUBALL line of carbon nanotube additives.

People quickly forgot about how the carbon nanotube was expected to change the world when it was replaced by another promising nanostructure called graphene.

Graphene is a sheet of atoms that you can pick up. Thats how strong it is. Take a sheet of cellophane made out of graphene and spread it out. Under the sheet, stick a pencil pointing upward (pencils BTW are made with graphite, not graphene). You can place the weight of an elaphant on that sheet and the pencil wont poke through it.

In addition to strength, graphene has numerous magical properties that made investors line up with open checkbooks. The story of graphene disappointing as it is requires a lot more than just a few paragraphs. For the sake of brevity, well say that there are plenty of graphene stocks out there but few that are showing any meaningful revenues from successfully commercializing graphene. As for private companies, there are also some success stories like Skeleton Technologies which uses a proprietary material they refer to as curved graphene which is the basis for the competitive advantage their ultracapacitor cells possess primarily on price and power density.

In addition to carbon nanotubes and graphene, a number of other carbon-based nanomaterials cropped up like fullerenes which also had superior properties that were supposed to generate exponential value for investors. One such class of nanomaterials were quantum dots.

According to MiliporeSigma (used to be Sigma-Aldrich before being acquired by Merck) quantum dots are tiny particles or nanocrystals of a semiconducting material with diameters in the range of 2-10 nanometers. Applications that were initially targeted included displays like television. A startup called QD-Vision was selling quantum dots that where used in Sony televisions (they were later acquired by Samsung). Another quantum dot startup called QD Light was targeting the LED market. Israeli startup StoreDot is developing quantum dots which are organic and metal free for use in batteries and displays (theyve since sold their battery tech to BP). Researchers keep talking about all the great things they can do with quantum dots but commercialized applications seem far and few between.

There is no shortage of interesting nanomaterials out there including nanowires, nanofibers, nanocellulose, metal mesh, nano inks, nano films, nanocomposites, and aerogels, one of the worlds most exotic nanomaterials. Most of the opportunity appears to suround nanotechnology startups that are still taking in funding from venture capital firms. Landa Group is reinventing digital printing with nano ink. Nanotronics is rethinking what a microscope should look like. Vaxxas is working on needle-free vaccinations.

At least seven startups are applying nanotechnology to clothing. Companies like Modumetal and Nanosteel are working on nano-enabled metals. A handful of startups are trying to commercialize metamaterials. Europlasma, HZO, andP2iare all developing methods to waterproof electronics using nanotechnology. NanoTouch is working on self-cleaning surfaces.

There are also applications for nano that can help heal the planet. NanoH2O is desalinating sea water while Diamond Foundryis manufacturing synthetic diamonds. Startup 24M Technologies uses nanoparticles to create a black goo-powered battery for grid energy storage. Nexeon is using silicon nanowires to create a better anode, and so is Amprius. There are a lot of exciting things happening in the world of nanotechnology, so lets see how retail investors might be able to get some exposure to nano stocks.

Youll be disappointed to hear that there are no nanotechnology ETFs right now, but that hasnt always been the case. When nanotechnology was popular among investors, there was actually an index of nano companies called the Merrill Lynch Nanotech Index. That index was discontinued, probably because it under-performed and interest in nanotechnology dried up. Below is a list of stocks that used to be in that index.

There was also the Lux Nanotech Index which didnt perform very well and was also discontinued, though a handful of constituents did manage to beat the broader market, nanotechnology or not.

Weve talked about how prolific nano penny stocks were, but we havent talked about more legitimate companies with revenues that havent been able to quite take off yet. Weve been watching Nanophase for over half a decade now and the $17 million company still hasnt been able to do much. Who wants to park their money in some company thats supposed to be seeing disruptive growth but instead has falling revenues and rising costs?

Then theres Nanosphere. We first wrote about their gold nanoparticle technology back in 2013 noting that the companys shares had fallen over 90% since their 2007 IPO giving them a market cap of $110 million. They were apparently still over-priced. Three years later, Nanosphere was acquired by Luminex for $83 million. If youd been in it for the long haul, you would have lost a lot of money.

Then you have companies not in the Merrill Lynch list like quantum dot developer Nanoco which finally has the numbers going in the right direction after punishing investors for years with the promise of quantum dots and quantum dot televisions, and little to show for it.

Another popular nanotechnology company among investors was Altair Nanotechnologies which nano pundit Josh Wolfe characterized as a nano pretender stating that Altair had changed names more often than Oprahs clothes. When we last checked, the companys flagship product was the Altairnano Energy Storage Systemwhich was expected to target the renewable energy industry. After their CEO resigned and the company appeared to be having financial difficulties, the company continued to air their dirty laundry until finally they voluntarily delisted their stock.

Another popular stock in the nano hype days was Harris & Harris Group which was a publicly traded venture capital firm which dabbled in nano. Theyve since changed their name to 180 Degree Capital and pivoted into other investment areas as their share price continues to languish.

Going forward, we can break down the nanotechnology opportunity into three major themes: nanomaterials including graphene, nano drug delivery, and synthetic biology including gene editing.

What investors need to remember is that companies which use nanomaterials for a competitive advantage wont neccesarily be telling the world about it. Many large-cap companies use nanotechnology in their products. One of our favorite dividend growth investing stocks, 3M, has been using nanotechnology in their products for decades. In the late 1990s, 3M revolutionized dental care with a superior filling based on nanotechnology. Were not saying 3M is a nanomaterials stock theyre actually a conglomerate but were simply saying that much of the progress being made with nanomaterials will be outsude of public eyes.

Then you have nanomaterials that people cant stop talking about, like graphene. In fact, there are quite a few publicly traded graphene stocks out there, any number of which should probably be avoided. Thats why we put together a A Guide to Investing in Graphene Stocks. Once youve read that or not lets move onto the really exciting stuff.

If we had to pick the single most exciting disruptive technology there is, that would have to be synthetic biology. The most efficient manufacturing known to man would have to be nature. Just think about the process of growing food using nothing but sunlight, water, and soil. Many futurist-minded people are thinking that soon well just grow everything we need using tools like gene editing. From what weve seen lately from companies like Ginkgo Bioworks, were off to a very good start.

Theres so much exciting stuff to talk about here that we put together a separate Guide to Investing in Synthetic Biology and A Guide to Investing in Gene Editing Stocks which looks at some areas of disruptive technology which we think will transform society more than even computing did.

The applications for nanotechnology in the healthcare sector are many. Its not progressed to biobots in your bloodstream yet, but its getting closer with many nano drug delivery mechanisms being commercialized.

Today, many companies are using nano drug delivery technologies. Some, like Bind Therapeutics, showed great potential, yet failed spectacularly. Nowadays, companies dont make a big deal about mentioning the use of nanotechnology, and many drug companies actively use nanoparticles to deliver drugs more efficiently. Here are some nano drug delivery companies weve looked at over the years, all of which happen to be publicly traded companies.

Other nano drug delivery companies like Cerulean Pharma didnt fare too well as they had to wind down their business after their lead drug a nanoparticle formulation that targeted cancer tumors failed in Phase 2 clinical trials. Ology Bioservices (previously known as Nanotherapeutics) was developing nanoparticles to make existing drugs more effective but has since pivoted into biomanufacturing.

From rejuvenating your skin to helping you quit smoking, nanotechnology has many uses in healthcare aside from just drug delivery. Venture capitalists continue to fund nanotechnology healthcare startups in all areas of healthcare. A recent example would be Nanox, a startup that is reinventing medical imaging with a new x-ray machine powered by a chip of nano-scale structures created using proprietary nanofabrication techniques. Another exciting startup to watch is Berkeley Lights and their nanofluidics platform that lets researchers quickly manipulate and measure cells at scale.

While the term nanotechnology has changed over the years, the promises it holds havent. Many companies are using nanotechnology, theyre just not shouting it from the rooftops. If you want to stay on top of what stocks to invest in based on the new definition of nanotechnology, we can help.

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Investing in Nanotechnology Stocks and Companies - Nanalyze