I said at the Moneyweek Workshop on Saturday that I would pop up a list of all the robotics stocks that Jim Mellon suggests we look at in his new book, Fast Forward (you can order the book here).
I want to be clear that I am not recommending these stocks as immediate buys (and Jim isn’t necessarily doing so either) just pointing out that they are ways into interesting companies doing interesting things in extraordinary areas, and as such are worth looking at.
So here we go.
There is Kuka (Germany: KU2) which is one of the world leaders in automotive robots. It is huge – 7,800 employees and a market capitalisation of €1.6bn – and makes a robot so precise that it can “perform repeated tasks to an accuracy of 0.05mm”, something I gather is very impressive. It is not cheap, but it is solid and growing.
Next, Fanuc Corp (Tokyo: 6954). This isn’t exactly a new company – it has been around since 1956, and I remember talking about it as a broker in the 1990s. But it is a good one. It has low debt, piles of cash and good profit margins, and is a clear leader in the business of industrial automation.
Anyone in any doubt about the future for this industry need only look at the chart below – sent to me by Carmignac Gestion.
It shows the huge rise in demand for Fanuc’s robots, something the second chart explains nicely: if robots don’t cost much more than people, why have people?
Intuitive Surgical (Nasdaq: ISRG) is also interesting. It makes the da Vinci Surgical System. One day, this could turn into a genuinely robotic surgeon, but for the moment it has mechanical probes controlled by a human surgeon with a console and a high resolution screen.
Also in surgery is Hansen Medical (Nasdaq: HNSN). This one is a pioneer in intravascular robotics. It has seen weak earnings and a collapsing share price over that last few years, but, says Jim, “its technology is sound.”
Other possibilities are Krones (Germany: KRN), another German firm that makes packing robots; iRobot Corporation (Nasdaq: IRBT), which sells robots into consumer and security markets; and HIWIN Technologies Corp (Taiwan: 2049), which makes precision machinery.
Then there is Google. This is one of the most highly valued companies in the world, but given its huge R&D efforts in automation and robotics, it would be “unwise” for a robotics investor to ignore it.
One more company to watch is Kawada Industries (Tokyo: 3443). This is a huge firm with a nice robotics division – its robot is designed to work alongside humans, and can be taught new tasks without the need for programming expertise. You don’t want to buy Kawada industries, but it is worth keeping an eye on it in case it decides to spin off its robotics division.
If you want to investigate more robotics companies a good place to start would be at www.robostoxetfs.com where you can see a list of the 80-odd companies held by the only ETF operating in the sector.