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Are Robotics Good Investments?

Automation has taken a toll on manufacturing in every corner of the globe. Light assembly jobs that took a hundred workers now require an automated assembly line working around the clock and now more than half a dozen workers. Investors are well aware of industries and economies hurt by automation. But, robotics has also created jobs and profitable companies. Are robotics good investments? Right now with the worldwide economy in the doldrums, this sector is lagging, but over the long term, robotics is, in fact, the wave of the future.

Investing in Robotics Stocks

Robotics Investing News writes about the seven top robotics stocks.

Spending in the USA on drones and robotics passed $100 billion a couple of years ago and is rising at close to 20% a year. These firms make two-thirds of their money selling robots or robotic equipment and the rest from software.

Here are the top seven (listed on exchanges in the USA) that they list alphabetically.

  • Cognex
  • FANUC
  • iRobot
  • KUKA
  • Medtronic
  • Rewalk Robotics
  • Rockwell Automation

Each of these companies has its own niche. For example, Medtronic makes medical devices and their automation is aimed at manufacturing in the core market. The listing gives a snapshot of each company and the article has financial info.

Are Robotics Good Investments?

There are three main themes to concern yourself with when investing in robotics. The first is the industry for which the robotics or automation are intended and the second is how well run the company is. The third has to do with how inventive they are and good at keeping up with or staying ahead of the completion.

Today the biggest markets for robotics are the auto and electronics industries. Today, with the trade war and now the Chinese coronavirus, trade has slowed, sales are down, and robotics sales are suffering. But, over the longer term, this technology will find more and more uses, and will be a true wave of the future. Thus, you need to consider are robotics good investments for the long term when picking investments.

Intrinsic Stock Value of Robotics Investments

Is it better to invest in companies that make the robots or those that design and upgrade the software? Large companies like Siemens do both but many smaller concerns focus on one or the other. The bottom line here is that, aside from paying the programmers, there is a low overhead to creating and upgrading software while making new machines requires more money than a smaller company may have access to.

And, you can certainly invest in Siemens via an ADR to take advantage of their robotics and automation prowess, but that aspect of their business is only a fraction of what they do so that the effects of growing automation sales are diluted. Three billion euro in sales would be huge for a standalone robotics company but is only a portion of the pie for Siemens.

The winning companies in this long term race will be those that keep ahead of the pack in regard to automation technology and run their businesses efficiently in order to maintain their customer base and produce steady profits.





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