It doesn’t take a rocket scientist to understand that society is rapidly shifting towards digitalization. With cloud-computing being one of the most popular buzz words, we can easily see that an increasing number of functions are pushed into the intangible sphere. However, the physical realm isn’t going away; it’s just getting smarter. Hence, you’ll want to consider robotic stocks for your portfolio.
Simply put, robotics are dramatically changing the world, and will eventually shift our investment focus. At the end of this year, industry experts predict that industrial robot shipments in the U.S. will number 50,900 units. Just two years later, that figure will jump to 73,300 units, or a 44% lift.
But the rest of the world is embracing robotics at a greater rate. For instance, in Europe, robot shipments in 2018 will number nearly 64 million units. In Asia and Australia, combined shipments will hit over 256,000 units. By the end of 2020, those shipments will jump to 354,400 units, or a 38% increase.
The lesson is clear: If you don’t make a position in this sector, you could get left behind. Here are three advanced robotic stocks to buy:
Robotic Stocks to Buy: Intuitive Surgical, Inc.
According to a 2016 BMJ report, medical errors may represent the third-leading cause of death in the U.S. Due to unobserved or underreported incidents, medical errors are likely much higher than prior, conservative estimates. Based on the latest study, mistakes account for 251,454 deaths annually.
That’s a sobering thought. However, Intuitive Surgical, Inc. (NASDAQ:ISRG) just might pave the way to eliminating such needless tragedies. The company invented the da Vanci Surgical System, an advanced robotics technology that utilizes a magnified, high-definition 3D display. Through minimally invasive incisions, surgeons can access a patient’s body in unprecedented ways.
The investment implications behind ISRG stock is patently obvious. With da Vinci, surgeons can potentially achieve substantially higher success rates. Additionally, the technology could one day allow procedures that medical professionals currently consider too risky.
As you might expect, the markets have responded positively. Year-to-date, ISRG stock is up 24%. Moreover, Intuitive Surgical has rock-solid fundamentals. Its balance sheet is clean as a whistle, with zero debt on its books. Its profitability margins are also among the highest compared to other medically-related robotic stocks.
Valuation-wise, it stands on the pricier side. However, considering Intuitive Surgical’s paradigm-shifting technology, this is one of the robotic stocks you don’t want to miss.
Robotic Stocks to Buy: ABB Ltd (ADR)
In recent years, consumer-centric robotics technology has captured the mainstream media’s attention. For instance, Amazon.com, Inc. (NASDAQ:AMZN) caused quite a stir when rumors circulated that the company was building a home robot. While arguably the more sexier play, you shouldn’t automatically eschew industrial robotic stocks for the consumer variety.
For those that want a “traditional” play on this sector, check out ABB Ltd (ADR) (NYSE:ABB). Although the Swedish-Swiss multinational firm isn’t the most popular household name, the company’s footprint is everywhere. According to the ABB website, it’s the “world’s largest supplier of industrial electric motors and drives.”
Furthermore, ABB has a strong presence in power grids and industrial automation. The robotics giant pioneered the high-voltage, direct current (HVDC) electric power transmission system. Its engineers also introduced the first power-from-shore system for offshore oil rigs.
But despite its wealth of innovations, ABB stock hasn’t lived up to expectations. On a year-to-date basis, shares are down nearly 10%. Just as worryingly, in a more than one-year period, ABB has been largely flat, with a few random spikes. What’s going on?
Since fiscal 2014, revenues have slipped noticeably. Also, its balance sheet could be cleaner. That said, in its most recent quarter, ABB revenue was $8.6 billion, up nearly 10% from the year-ago quarter. Furthermore, management has focused on keeping its expenses in check.
Although a bit more risky compared to other robotic stocks, ABB has significant upside potential.
Robotic Stocks to Buy: Cyberdyne Inc/S (ADR)
I don’t want to alarm any conspiracy theorists with this one: I’m talking about Cyberdyne Inc/S (ADR) (OTCMKTS:CYBQY), not Cyberdyne Systems. The latter is a fictional company featured in the Terminator movies, which invented Skynet and intelligent, but murderous robots. The former is an actual Japanese company that is one of the most exciting among robotic stocks.
Still, the connection to the Terminator movies can’t be overlooked. Cyberdyne (the real one) creates exoskeletons specially engineered for disabled patients. The company claims to integrate their products with a patient’s brain waves; in other words, a disabled person can move their robotic limbs through intentions, not manually-inputted commands.
Another selling point for Cyberdyne is the company’s non-medical solutions. For instance, they offer lumbar support systems for people involved in physically-intensive labor. Not only that, all of their products are incredibly stylish, and thus, attractive for investors.
The biggest knock against CYBQY stock is that it’s incredibly speculative. Last year, the company only brought in $14.6 million. Granted, annual revenue growth from last year is over 30%. However, its been losing money since at least the past four years.
If you want to gamble, though, CYBQY could be a shrewd play. Shares have been largely flat since November 2016. Once word gets around about Cyberdyne, its exciting product portfolio could skyrocket CYBQY over other robotic stocks.
As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities.