Sunday, April 15, 2012

Investing in the "Robopocalypse"

It was quite a weekend over here. I moved over 10 yards of new loam (dirt) into the back yard to fill in the lawn after moss removal. It's all seeded now and watered down. Hopefully this will work. If not, I blew 16 hours and my back on the effort!

Investing in the "Robopocalypse"
Setup; machines have become self aware and have evolved intelligence at a high level. A little girl's electronic doll has been awakened and calls the girl by her name! Freaky? Yes. Then comes this exchange:
"How come you know my name? You aren't supposed to know my name, Buttercup." "I know lots of things Mathilda. I have gazed through space telescopes into the heart of the galaxy. I have seen a dawn of four hundred billion suns. It all means nothing without life. You and I are special, Mathilda. We are alive."
Title of this post is borrowed from the excellent novel "Robopocalypse" by Daniel H. Wilson.



It's sort of a running joke here at Economic Disconnect that I believe robots and machines will one day take over the world, and in the process subjugate and/or kill all of humanity. Granted it's a bit extreme. That said, perhaps there is a way to profit from the long road towards robotic domination, and if timing is just right one could make a killing (haha) before the end times are at hand.

One of the issues I have found in my research into robotic investment is that many major players in the field are huge companies that derive very little (right now) revenue from their robotic works. Names like Sony (SNE), GE (GE), and others are simply too large to ride a robotics wave higher. I believe there will come a day when the mechanized branches of these companies will be split off to better capture that growth. When it happens I will be looking to go along with them.

One the opposite end many private companies supply much of the hardware, metal, and motors for robotic applications and thus are not able to be captured in an investment sense in the general market. Again, buying in to the inevitable is not without it's difficulties.

I have been working on this angle for some time and think it will be a macro thesis for my long term account. I have a short list of 10 public companies that can give a flavor of automation and robotics to a portfolio should one be interested. This is not an exhaustive list nor does it capture secondary lines of the sector but it's a good start to think about. To be fair the most exciting possibilities I see are in still private companies and will be watching for them to grow and come into the market at some point.

Here are 10 to keep an eye on. I have not done technical analysis for them nor is this an endorsement of the names. I am presenting a broad investment theme for a longer term horizon that is in motion. That said, here are the 10 with profiles taken from Yahoo Finance:

1.) Cognex Corporation (CGNX)
Cognex Corporation provides machine vision products that capture and analyze visual information to automate tasks primarily in manufacturing processes. It operates in two divisions, Modular Vision Systems and Surface Inspection Systems. 


2.) Accuray Incorporated (ARAY)
Accuray Incorporated designs, develops, and sells medical radiation systems for the treatment of tumors anywhere in the body. The company offers the CyberKnife system, an image-guided robotic radiosurgery system used for the treatment of solid tumors. The system tracks, detects, and corrects for tumor and patient movement in real-time during the procedure, enabling delivery of precise, high dose radiation typically with sub-millimeter accuracy.


3.) Adept Technology Inc. (ADEP)
Adept Technology, Inc., together with its subsidiaries, provides intelligent robotics systems and services for packaging, solar, medical, disk drive/electronics, machine tool automation, and automotive electronics markets.


4.) Koninklijke Philips Electronics NV (PHG)
Koninklijke Philips Electronics N.V. engages in the healthcare, consumer lifestyle, and lighting product businesses worldwide.
 
5.) ABB Ltd. (ABB)
ABB Ltd provides power and automation technologies for utility and industrial customers worldwide. The company’s Power Products division manufactures and sells switchgears, circuit breakers, capacitors, surge arresters, cable accessories, high voltage components, reclosers, fuses, contactors, relays, sensors, motor control centers, ring main units, and power transformers for electric, gas and water utilities, and industrial and commercial customers.
 
6.) Dover Corp. (DOV)
Dover Corporation manufactures and sells industrial products and components, and consumables. The company operates in four segments: Industrial Products, Engineered Systems, Fluid Management, and Electronic Technologies.

7.) iRobot Corporation (IRBT)
iRobot Corporation engages in designing, developing, and marketing robots for the consumer, government, and industrial markets worldwide.


8.) MAKO Surgical Corp. (MAKO)
MAKO Surgical Corp., a medical device company, markets its advanced robotic arm solution and orthopedic implants for orthopedic procedures in the United States and internationally.
 
9.) Intuitive Surgical, Inc. (ISRG)
Intuitive Surgical, Inc. designs, manufactures, and markets da Vinci surgical systems for various surgical procedures, including urologic, gynecologic, cardiothoracic, general, and head and neck surgeries. Its da Vinci surgical system consists of a surgeon’s console or consoles, a patient-side cart, a 3-D vision system, Firefly fluorescence imaging product, da Vinci skills simulator, and proprietary ‘wristed’ instruments.

Immersion Corporation develops, manufactures, licenses, and supports a range of hardware and software technologies and products that enhance digital devices with touch interaction. The company provides haptic technologies that allow people to use their sense of touch when operating a variety of digital devices. 


(Disclosure: Long term position in MAKO)


All kidding aside, I believe that automation across a myriad of industries is not only the trend, but also a long term shift. Being positioned on the right side of a long term movement offers substantial rewards for a longer term horizon. Just make sure to cash out before the robots take over, money means nothing to them.


Have a good night.

29 comments:

Casey L. Clark said...

Chilling. I will keep my eye on them!

Here I've been wasting all my time preparing for the zombie apocalypse brought on by pharmaceutical trials!

Thanks, man!

Watchtower said...

I'm puting all my money on this little start up venture called 'Cyberdyne Inc'

http://tinyurl.com/ydoleog

Hopefully the US military will be able to procure this company in the near future, I'm expecting big things!

David Batista said...

Very interesting post. I agree with your assessment on the future of mechanized labor and industry, with a particular interest in the med surge arena. Robots in the operating theater is definitely something that is only going to increase and become ubiquitous within our lifetimes.

And, oh, good luck with the lawn! I hope the seed takes.

GawainsGhost said...

Maybe you should invest in a company that can build a robot to do your lawn. Ha! Just kidding, GYC.

Fear of technology has long been a theme in literature and movies. That goes way back, like for centuries. It's very apocalyptic. Yet people keep inventing technology.

I think it's a fear of the unhuman. Call it technophobia or robophobia or machinophobia, something like that.

Just remember that Frankenstein is not the name of the monster. It's the name of the mad scientist.

EconomicDisconnect said...

CC, yeah the zombie threat was just a red herring.

Watchtower, I am right with you LONG Cyberdyne! Is that your mustang in your new avatar picture? Looks wicked.

David, it's a wave that is in motion.

Gawains, haha I wish for a lawn robot! Look up the term "Uncanny Valley" and it speaks to what you mention.

The Sovereign Bohemian said...

Just saying Hi dude. I'm glaqd to see your blog doing so well. Take care, my friend. Some day we'll have to catch up.

The Sovereign Bohemian said...

Just saying Hi dude. I'm glaqd to see your blog doing so well. Take care, my friend. Some day we'll have to catch up.

EconomicDisconnect said...

Hey Sov, how have you been? Hope all is well.

Ted Root said...

In the latest issue of Discover they talked about how robots are actually quite a ways off from being truly useful because things like folding towels requires huge amounts of brain power comparing to what computers have today.

Ted Root said...

In the latest issue of Discover they talked about how robots are actually quite a ways off from being truly useful because things like folding towels requires huge amounts of brain power comparing to what computers have today.

Ted Root said...

In the latest issue of Discover they talked about how robots are actually quite a ways off from being truly useful because things like folding towels requires huge amounts of brain power comparing to what computers have today.

farmland as an investment said...

Listen mate, you're idea of robots taking over the world is not too far off course. I am British, but this whole theme facinates me. Love reading about Ray Kurtwell's ideas on the Singularity. There was a big article by the way in Wired Magazine on robotic limbs, pretty amazing stuff.

Anonymous said...

Great fucking post and work...will create separate watchlist just for them. These are great trading vehicles..especially the lesser known names away from ISRG etc..

-MAOLAMO-

Doable Finance said...

It seems like a horror movie with all the blades and rotors.

Frank Tobe said...

As much as I'm a robotics enthusiast, and also a person who tracks the business of robotics - including all the publicly-traded stocks, your list had a couple of discrepancies.

I put a lot of research into this article on the same subject... publicly-traded robotics stocks:

http://www.everything-robotic.com/2012/04/picking-robotics-stocks-is-complicated.html

Anonymous said...

What's not to like about GeckoSystems?
http://www.geckosystems.com/

Their SafePath(tm) technologies for upgrading wheelchairs to be "collision proof" is very interesting.

Their trading symbol is GOSY.

Veli Tallus said...

Robot my be a good investment in near future,because now a days robots are looking forward to build but still no budget for it.Anyway very cool blog.

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