The jump in productivity amid a slump in wages and a slow grind of hiring is nothing new for anyone reading the business pages. However, it’s worth considering the winners in this mess … even if a lot of folks who depended on low-skilled but decent-paying jobs have been losing out.
After all, if the manufacturing jobs are going away but the manufacturing work isn’t, somebody in charge of the technological means of productions is bound to make a pretty penny.
If you want to play this trend, here’s how you can invest in the rise of automation via five robot stocks:
IBM: Blue-chip stock IBM (IBM) is the godfather of the earliest forms of workplace automation, finding its roots in companies that made timecard-punching machines in the 1880s. The march toward automation has continued with its Watson supercomputer. In healthcare, Watson is working on diagnosing patients and helping with clinical research. In education, Watson can help create custom-learning plans for students and help teachers assess performance. In finance, Watson can help judge investment and credit risks.
Google: Tech giant Google (GOOG) has been in the news lately with its self-driving car. But while this is admittedly a form of automation, more robots are at work behind the scenes at Google after recent acquisitions. There’s DeepMind, an artificial-intelligence firm. There’s robotics company Schaft, which won a recent Department of Defense competition that required humanoid robots to navigate disaster areas and carry out a series of relief tasks. Then there’s Redwood Robotics, a company that focuses on robotic arms for manufacturing and other repetitive uses. With roughly $60 billion in cash and investments on the books, and a history of ambitious acquisitions for both technology and talent, Google is agile enough to be seen as a serious competitor in almost any field of technology.
Amazon.com: Innovator Amazon (AMZN) bought robots company Kiva for $775 million in 2012, and the company has been investing heavily in cutting-edge fulfillment centers to expedite shipping. And, of course, there was that whole 60 Minutes episode that unveiled CEO Jeff Bezos’ plan for shipping via drones. It’s not unrealistic to imagine a future where a customer clicks “order” on Amazon.com, and automated systems package it and put it on the back of a mail truck.
Siemens: Germany-based Siemens (SIEGY) might not have the Silicon Valley real estate or the famous branding that others on this list do. However, with billions in automation sales worldwide each year, there could be no better way to play the robot revolution than via this established leader in the field. Siemens automation technologies help Coca-Cola Enterprises (CCE) and help General Motors (GM) design and manufacture cars, among other things. With over $5 billion a year in R&D spending on the next generation of automation technology, Siemens is doing everything it can to ensure it remains the leader in the field.
Robotics ETF: There’s no way to know for sure where the future is headed and which single company will be the leader in 21st-century robotics. So one diversified way to play the rise of robots is via broad-based investment in automation leaders, such as the Robo-Stox Global Robotics and Automation Index ETF (ROBO), an ETF heavy in robot stocks. This specialized fund is small, with about $100 million in assets under management. However, its flavor is unique in that the fund tracks companies mostly focused on automation.
For more information, check out my recent appearance on Fox Business Network above talking about these five investment opportunities.
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. As of this writing, he did not hold a position in any of the aforementioned securities. Write him at editor@investorplace.com or follow him on Twitter via @JeffReevesIP.
