Investing in Robotics

The history of robotics dates back to ancient times. In 270 BC, Greek engineer, Citesbus made organs and water clocks with movable figures. If we fast- forward to 1941, the first mention of the term robotics was by Isaac Asimov. Then in 1961, General Motors introduced the first industrial robot called the “Unimate.” The use and variety of robots has grown steadily and now is widespread in space exploration and domestic industrial applications.

In the private sector robots have replaced thousands of former human applications. The goal has been to reduce labor costs. It is much cheaper to operate a robot at $3.00 or $4.00 an hour than to pay minimum wages. The robotics sector growth is estimated at 11% per year through 2016.

The industry sector for robotics includes “pure play” companies that primarily engage in robot production and a wide range of companies that supply the hardware and software parts and programs for robotics. These include power systems, power switching devices, servo- motors, laser imaging and range finding technologies.

Analysts have identified the five largest robotics companies worldwide. They are:
· KUKA (KUKA:US) Recent Price $47.10 USD. 52 week High/Low are $49.00/$29.60. Year’s revenues were $1.6 B, up from $1.5B a year earlier. Q2 earnings were up $28.6 M. Sales rose 33% to $448.7 M.
Headquartered in Germany, KUKA is the world’s largest maker of assembly industrial robots. It designs and manufacturers production machines and offers product- engineering services. It builds automobile factories, produces welding and assembly systems, industrial robots, turning machines, packaging machines and measuring and control instruments.

· ABB (ABB:US) Recent Price $25.26 USD Recent High/Low is $26.00/$16.94. Recent Earnings: Net Profit was up 10%
Headquartered in Switzerland, the company produces power and automation technologies. It designs and manufacturers power products, power systems, automation products, process automation and robotics.

· Fanuc Corporation (FANUF:US) Recent Price $157.75 USD 52 Week/Low is $191.00/$142,00. The company recently had to cut operating profit by 13% due to exchange rates and strong Yen. Yearly revenue was $178 B Yen.
Headquartered in Japan, The company manufacturers factory automation (FA) systems and equipment and robots. Other products include computerized numerically controlled (CNC) equipment, servo- motors, laser systems, industrial robots, and wire-cut electric discharge machines. Currently it has a joint venture with GE.

· Yaskawa Electric (YASKF:US) Recent Price $12.50 USD. 52 Week High/Low is $14.20/$8.20. A strong Yen, saw the company’s profit down 3%. 9 Month Net was 4.32 B Yen compared with a loss for last year. Profits did not meet expectations and the company received a downgrade from Credit Suisse.
Headquartered in Japan, Yaskawa manufacturers and markets servo-motors, controllers, inverters and industrial robots. Other products include spindle controllers, computerized numerical control (CNC) systems and systems engineering.

· IRobot (IRBT) Recent Price $33.32 52 Week High/Low is $41.12/$16.25. EPS is .47 PE Ratio is 70.02 Market Cap is $954.38 M.
IRobot uses its proprietary AWARE program to design robot intelligence systems that incorporate advanced concepts in navigation, mobility, manipulation and artificial intelligence. Its product line includes robots for consumers and the military.

If you prefer an ETF, look at the I Robo Stox Index (ROBO). It tracks the Stox Global Robotics and Automation Index. Recent Price: $25.24

This discussion is neither a recommendation to buy nor to sell these securities. You must always do your own diligent research.

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