SPECIAL REPORT The Top 7 Stocks for 2024

The 7 Best Robotics Stocks to Buy Now: September 2023

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  • Rockwell Automation (ROK): This leading automation company is trading at a compelling discount after its recent correction.
  • Littelfuse (LFUS): Provides a modest dividend yield for those willing to ride out this recovery story.
  • Hyundai Motor (HYMTF): Although Hyundai is mostly an auto company, it owns a thriving robotics subsidiary.
  • Continue reading for the complete list of robotics stocks to buy!
Robotics Stocks - The 7 Best Robotics Stocks to Buy Now: September 2023

Source: shutterstock.com/sdecoret

While artificial intelligence stocks have seen a meteoric rise in recent months, there are still some underappreciated opportunities in the broader technology sector. Specifically, robotics stocks remain overlooked by many investors, even as the need for automation and robotics solutions continues to accelerate. Labor shortages and cost pressures are driving more companies to seek ways to automate repetitive or dangerous jobs traditionally done by human workers.

Blue-collar industries stand to be massively impacted by advancements in robotics, perhaps even more so than white-collar industries. For this reason, now may be an opportune time for forward-looking investors to start building positions in leading robotics companies. In this article, I’ll highlight seven of the most promising robotics stocks that are poised to benefit from the increasing adoption of automation and robotics. Although some of the leading tech giants have seen their share prices balloon thanks to the recent AI rally, many specialized robotics players still offer significant upside potential.

Here are three for investors to add to their watch lists right now.

Rockwell Automation (ROK)

Rockwell Automation sign is seen in Cambridge, On, Canada. ROK stock.
Source: JHVEPhoto / Shutterstock

Industrial stalwart Rockwell Automation (NYSE:ROK) has seen its shares dip around 12% from its July peak, creating an attractive chance to grab shares of this robotics leader.

With automation demand still red hot, Rockwell Automation looks poised to continue delivering healthy growth. Consensus analyst estimates call for around 15% sales growth this year. That’s not shabby at all for an industrial firm.

Beyond the company’s headline financials, Rockwell saw some moderation in customer orders last quarter as supply chain constraints eased and lead times normalized. However, management reiterated that underlying demand remains robust. The company’s diverse end-market exposure and innovative new offerings increase my confidence that temporary order swings won’t derail its long-term prospects.

With unemployment still at record lows, workforce shortages will compel companies to boost investment in automation for years to come. Rockwell’s expanded software capabilities, including cloud-native options, provide plenty of growth potential.

In my opinion, ROK stock looks like a smart bet for investors seeking robotics exposure without the heartburn of some pricier, fast-moving tech names.

Littelfuse (LFUS)

a robot built in the essence of a human raising its hand to its chin implying deep thought
Source: Phonlamai Photo / Shutterstock.com

Meanwhile, electronic components maker Littelfuse (NASDAQ:LFUS) offers investors a lower-risk way to gain robotics exposure. This is another under-the-radar stock, but one that won’t generate some wild price swings like some pure-play robotics innovators. Indeed, that’s precisely why I think many investors should take a look at this company.

Littelfuse brings a track record of consistent execution and financial performance. Despite some recent red ink, the future looks bright for LFUS stock. Consensus forecasts call for 5.7% sales growth in 2024 after its 5.24% decline this year. This revenue growth should drive a nice recovery in earnings per share, which are projected to climb 13% after a 28.5% fall this year. The following year, in 2025, analysts see an acceleration on both metrics, with sales growth rebounding to 10.6% and earnings per share expected to surge 24% higher. Thus, I see a lot of appreciation ahead.

Plus, LFUS is trading at a forward price-earnings ratio below 20-times for that growth, and serving up a 1% dividend yield as a sweetener. As supply chain constraints continue to ease over the next year, I believe this is a stock that will see more positive price action.

Hyundai Motor Company (HYMTF)

Hyundai (HYMTF) sign for car dealership with blue sky in background, symbolizing HYMTF stock
Source: shutterstock.com/AntonovVitalii

South Korean auto titan Hyundai Motor (OTCMKTS:HYMTF) isn’t the first name that pops to mind when considering robotics stocks. Hyundai spreads its bets across vehicles, construction equipment, and financial services, but it also boasts a thriving robotics subsidiary in Boston Dynamics. Boston Dynamics’ remarkable four-legged Spot robot has certainly fascinated many investors.

Accordingly, with HYMTF stock hovering below $50 apiece, I believe investors are getting the firm’s budding robotics capabilities at a bargain. Not to mention, its bread-and-butter auto business still looks relatively healthy.

Hyundai has provided stellar growth numbers this year, with Q1 sales up 13% and operating profit margin more than doubling. The key drivers? Strong SUV and luxury Genesis vehicle sales, along with rising EV volumes. Again, this not really a direct robotics play, but as EVs become more autonomous, I feel like Hyundai deserves a spot in this article. Plus, the stock provides some appealing exposure to both EV and AI macro trends.

IPG Photonics (IPGP)

a worker with a tablet remotely operates a standalone robot arm. Get Rich with Robotics. Best Robotics Stocks to Buy
Source: Shutterstock

While I don’t dispute the challenging operating environment, laser maker IPG Photonics’ (NASDAQ:IPGP) massive underperformance this summer may have created a bottom fishing opportunity for value investors.

The stock is down around 24% since its July peak as sales declined across several key geographies and applications. But with shares beaten down 30% from where the stock traded five years ago, I believe the negativity around IPGP looks overdone.

Make no mistake, IPGP faces headwinds from weakening manufacturing activity, especially in Europe and China. However, management emphasized that key demand drivers like EVs and renewables remain resilient.

Looking ahead, the company’s growth outlook appears brighter. Analysts expect the current downtrend to prove temporary, forecasting a 6.4% sales decline for 2023 but a return to 11% growth in 2023 and a further 13% pop in 2024. Earnings per share tell a similar recovery story, with the company’s EPS figure anticipated to rebound from $4.80 this year to $6.50 in 2025.

Despite divergent opinions on Wall Street, most analysts see upside from the current price level. I believe the latest pullback makes IPG’s valuation much more reasonable for investors seeking rock-bottom value picks. For those with a higher risk appetite, I think starting a position at current levels makes sense.

Teledyne Technologies (TDY)

robotic arms over medical bed symbolizing medical robotics
Source: shutterstock.com/MAD.vertise

Teledyne Technologies (NYSE:TDY) has been rangebound over the past couple of years, trading just 6% above pre-pandemic levels. This is despite stellar sales growth of over 85% from pre-COVID levels, proving the industrial conglomerate’s resilience amidst economic uncertainty.

The company continues to deliver consistent top-line expansion, with revenues expected to grow around 5% annually over the next two years. This has led to a relatively higher valuation, with the company’s forward price-to-earnings multiple on the pricier side. I believe paying the premium for TDY stock is worth it, considering its historical performance, as well as its hand in the drone industry.

The average Wall Street analyst has a $500 price target with this stock, implying almost 20% upside. As I’ve mentioned before with companies like Ammo Inc., a higher share price is likely since Teledyne inked some deals to send counter UAS systems to Ukraine for $31 million. That money is going to keep flowing in, and investors will be rewarded.

Fanuc (FANUY)

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Source: Shutterstock

Fanuc (OTCMKTS:FANUY) has plunged over 30% since its June peak, recently finding support around $13. That’s the same level that marked a bottom back in October, before a 30%+ rally ensued. The Japanese robotics and automation leader faces macro uncertainty. However, double-digit sales growth is still expected over the next two years.

Demand trends should normalize in 2023, and despite the company’s near-term headwinds, Fanuc maintains dominant market share in its niche areas like factory automation and CNC machines. Its current valuation reflects an excessively bearish outlook.

For long-term investors, this likely represents another golden buying opportunity. Some volatility may persist given the demand environment, but the risk-reward skews positively at current levels. Patient accumulators stand to be rewarded handsomely if Fanuc’s growth returns as expected.

Hexagon (HXGBY)

Sweden’s Hexagon (OTCMKTS:HXGBY) has plunged back toward 2018 lows, revisiting levels last seen before its pandemic surge. The company holds leadership positions in secular growth areas like metrology and geospatial imaging. Analysts expect the company’s sales growth to creep up to 14% in 2026 from just 4% this year, reflecting these strong market positions. At current levels, HXGBY stock trades at just 24-times forward earnings.

Drilling down further, Hexagon’s manufacturing and infrastructure arms both faced particular weakness recently pressuring results. However, management expects positive inflections in these cyclical end-markets moving forward. The company also continues investing in growth initiatives like autonomous technology, and many expect this investment to bear fruit down the road. Margin expansion remains a key priority, with a new efficiency program aimed at boosting profitability.

The average analyst puts the one-year upside potential at 28%. I like this stock, given its upside potential and positioning in key markets.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/09/the-7-best-robotics-stocks-to-buy-now-september-2023/.

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