Isn’t it fascinating to find investment potential in one of the world’s most booming businesses? Robotics has finally arrived, but there are still big questions about where it’s going, what effects it will have on society, and whether the boom will go bust.
Most experts say it’s quite difficult to even come up with an accurate estimate of how many robots exist! Best guesses put the number at about 2 million industrial robots, as a bare minimum.
For investors, exact numbers are not as important as the trend, and the trend is clearly upward. I set out to find the best ways to invest in robotics without acquiring my own factory or buying and selling actual robots. Those options are for the big-money venture capitalists, and they can have them. As an ordinary stock investor, I delved into the details of who makes what types of robots, what companies are profitable, and which ones are big and stable enough to have a bright future.
Fortunately, all the research data I needed was available online. There are some very interesting stocks out there, as well as a couple ETFs that specialize in robotic-related ventures.
Here’s the crux of my “robot investing” research, which might be of some help for those who want to take a look at this unique segment of the technology market:
How to Invest in Robotics
Whether you’re the type of person who gravitates toward ETFs or individual stocks, there’s something for you in the robotics sector.
Four Stocks
- Rockwell (ROK) is a $20 billion giant of a corporation that regularly beats its earnings estimates, has a reputation for efficiency and expert management, and is heavily invested in the robotics segment. Rockwell is one of the leading companies in the field, and for investors who want direct exposure to robotics, this single company is an excellent choice.
- Middleby (MIDD) is a diversified food service and procession company that offers robotics investors a safer exposure platform than companies that are all-in with robotics. In addition to checking all the boxes on management, growth, and earnings, Middleby is a mid-cap entity that has a thriving non-robotics division in commercial food-service operations.
- Siemens (SIEGY) is a $120 billion global force to be reckoned with in health care, power transmission, energy and other markets. For those who want limited exposure to robotics, Siemens is a wise choice; its “digital factory” component is the most profitable in the entire company. The German firm, formally called Siemens AG, has a global customer base and a history of smart growth and financial stability.
- Cognex (CGNX) is heavily invested in the robotic “visual scanning” market, making devices that scan inventory barcodes and similar tasks. A mid-cap choice, but as adept in its mission as the much bigger Rockwell is in its own, Cognex shares have increased by more than 110 percent in price during the past year, and expectations are that both revenue and earnings are set to grow by double digits for 2017 and 2018.
ETF Possibilities
ROBO is an ETF whose price has increased almost 50 percent in the past year. It regularly outperforms the market and its main robotics ETF competitor, BOTZ. With wide diversification and very low risk, ROBO is considered a good value due to its low market capitalization and lower P/E ratio compared to BOTZ. The ETF is sought out by investors who want low risk but targeted exposure to the robotics market.
BOTZ is the other primary ETF choice in robotics, boasting at least four stocks that are not held by its competitor, ROBO. Considered less diverse and more explicitly focused on robotics alone, BOTZ is the newer player on the robo-block, having come into existence in late 2016, compared to ROBO’s 2013 debut.
Look for many more robotics ETFs to come along in the next five years as this sector heats up and the technology becomes more familiar.
“That Does Not Compute”: Myths About Robots
Investors should educate themselves about the basic technology behind robotics. It always helps to dispel some of the common myths that arise with every new market niche. Here are some of the most common misconceptions people have about robots and the robotics industry:
Robots are expensive: At one time this was true, but industrial robots are becoming so price-competitive nowadays, that even small companies can afford them. Consumer robots for house-cleaning and similar chores cost less than $50.
Robots are a new invention: Not true. The concept has been around for hundreds of years, but since the advent of electricity in the late 1800s, rudimentary robot-like machines were commonplace.
Most robots make cars: As recently as 30 years ago that was a true statement, but today, auto manufacturing accounts for less than half of all industrial robots.
Robots have emotions: Only in films do robots have human emotions. Try insulting an industrial robot sometime and see whether or not it cries. It might accidentally crush you if you stand in its path, but don’t take it personally. The robot isn’t upset.
Valuable Videos and Robot Books for Intrepid Investors
Watch as industrial robots piece a car together in seconds. See a humanoid robot interact with her operator. Learn to build a robot in the privacy of your garage. Finally, read a complete treatment of all things robotic, and discover how to plan for a future of successful investing in this lucrative, booming market.
- The industrial robots building Kia cars in a Korean factory are state-of-the art pieces of machinery. Their speed and efficiency dazzles. Their noisy, spark-filled “conversation” would fit perfectly in any sci-fi film. Click here to see the magic of Kia’s car-making robots.
- Build Your Own Humanoid Robots : 6 Amazing and Affordable Projects (TAB Robotics): For less than $300, robot enthusiasts can try any of the six projects outlined in this clever how-to book. It explains everything in clear steps, including all you need to know about sensors, DC motor control, feedback, micro-controllers, control systems, analog-to-digital converters and more. You need not be an engineer to complete the projects, but being handy with basic tools and beginner-level electronics helps a lot.
- Robotics: Everything You Need to Know About Robotics from Beginner to Expert: This is the go-to reference for anyone who wants to learn about the robotics market, understand how quickly the technology is advancing, and get a grip on what it means to invest in this endlessly interesting new field.
- Humanoid robots are becoming more realistic every day, and the Japanese lead the way in this intriguing sub-category of the market. Watch as the researcher programs the robot woman in the chair. No longer the stuff of futuristic films, humanoid robots are already here, and they’re already part of the scenery in research labs all over the world. Click here to watch a very strange demonstration.
The Future is Now
Just how will the robot revolution play out? Most experts, particularly the team at tech site ZDNet, believe that the year 2020 will be a watershed for robotics, ushering in job titles at major corporations similar to “Chief Executive for Robotics,” (a CER?), new trends toward personal service robots, massive increases in the use of robots in ecommerce applications, and a surge of government regulations for the industry.
In fact, a few U.S. legislators have already floated the idea of taxing companies on a “per robot” basis to offset human jobs lost. (How about replacing human legislators with robot versions that don’t tax everything that moves?) Maybe the most interesting trend will be the creation of a robot-network in the cloud, a development which could lead to an entirely new kind of economy and workplace.
We welcome your input on this fascinating new topic, one which could literally change the way we all work and live. Let us know your thoughts and opinions in the section below, or visit our Facebook page and tell us your ideas about the future of robotics.