Robots become investment opportunity
Robots are an increasingly important and widespread segment of the workforce. The auto industry remains the largest market for robots. But they can also be found neutralizing land mines for the military, fulfilling orders in warehouses, and assisting in surgical procedures in hospitals.
The International Federation of Robotics estimates that 1.3 to 1.6 million industrial robots are in use. In 2013 (the latest year for which figures are available), nearly 180,000 robots were sold — the most ever in a single year. Spending on robots worldwide is expected to jump from an estimated $27 billion in 2015 to $67 billion by 2025, says the Boston Consulting Group.
Here are two companies to watch (or possibly buy):
The key to building a better robot is imbuing it with humanoid senses — only better. While the human eye can see 30 frames per second, for example, robots today can see thousands of frames per second. Cognex (symbol CGNX; recent price, $51) is a leading developer of machine-vision technologies used to monitor production lines, guide assembly robots, detect manufacturing defects and track parts.
Factory automation should account for more than 80 percent of the company’s revenues in 2015, and that segment is growing by 20 percent a year, according to Canaccord Genuity, a Canadian financial-services firm.
The Cognex share price has risen 59 percent over the last year.
On the home front, the robotics federation expects 31 million robots to be sold for personal use from 2014 through 2017, most tasked with domestic chores.
You may be familiar with the Roomba vacuum cleaner, made by iRobot (IRBT; $34). The company claims roughly 75 percent of the robot vacuum market. That’s less than 20 percent of the U.S. market for higher-end vacuums, leaving plenty of room for growth, even with vacuum leader Dyson scheduled to enter the robotics market later this year.
IRobot also makes bomb-disarming robots for the military. That segment is struggling as U.S. defense spending declines and troops are pulled from harm’s way.
But the company’s disciplined research and development in that area are driving innovation in broader product lines focused on three key robotic capabilities: the ability to navigate, perceive the surrounding environment, and interact with it.
For example, IRobot’s “telepresence” bots (they look like a mobile stand with a screen on top) allow doctors to consult from afar, or business people to meet or manage remotely. After mapping out your office (or factory floor or medical center), the bots can show up automatically for scheduled events, or simply enable you to virtually roam distant halls at will, interacting with those you meet.
Anne Kates Smith is a senior editor at Kiplinger’s Personal Finance magazine. Send your questions and comments to firstname.lastname@example.org. And for more on this and similar money topics, visit Kiplinger.com.
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