Stocks of Robot Manufacturers Still Recovering

The latest ROBO-STOX™ chart – covering the four year period from 12/31/2007 to 12/31/2011 – shows that worldwide stock performance of robotic stocks over the last four years has been disappointing for investors.

Publicly-traded robot vendors represent less than 20% of the total list of companies in the industry. Further reducing that number of stock opportunities is the fact that in many cases, robotics is not the primary business of the company. ABB (ABBN:VX) is an example – only 1/3 of their income is derived from robotics or robotic related activities; the same is true for many of the public companies, particularly those that provide drones for defense and underwater ROVs.

2012  is likely to be another volatile year for robot vendors, public and privately-held.

• In the industrial sector, Foxconn (2317:TW) has confirmed that their new robot manufacturing facility in Taiwan will be producing about 1 million robots for deployment in their factories in China starting this year and continuing into 2013 and 2014. Foxconn’s choice to build their own robots will have a major impact on robot manufacturers ABB (ABBN:VX), Fanuc (FANUY) and Kuka (KU2:GR) – companies that have manufacturing facilities in China or nearby and were anticipating selling to Foxconn.
• Foxconn has not said whether or when they will begin selling their new line of robots to other companies. 
• Medical robot vendors outside of the U.S. will find much demand for their products which are likely to be unhampered by FDA and other regulatory bodies, eg, Mazor (MZOR:IT), an Israeli company with a well-received robotic device for spine surgery. In the U.S., competition and growth is thwarted not only by the slow and costly FDA approval process but also by Intuitive Surgical (of da Vinci fame) (ISRG) and InTouch Health (venture-funded; not yet public), both of which have wide-ranging patents.
• Defense/security robot and unmanned vehicle vendors (air, land and sea) worldwide will find their products in much demand even though overall defense spending is going down.
• Robot vacuum vendors like iRobot (IRBT), LG and Samsung, are finding that world demand for this type of robot cleaner is growing – but so is the competition. At CES 2012 there were 6 other Korean, Chinese and European competitors to the big 3.
• Robotic lawnmowers are beginning to sell as their price comes down to less than $1,000 in the U.S. and less than $2,000 in Europe.
• Service robot companies that focus on academia will find much competition and lower budgets for the year.
• Engineering and consulting firms that provide automation integration services will start to feel pinched as robot manufacturers provide robots which are more intuitive and easier to train and integrate – the very reasons that caused there to be a need for outside integrator firms in the first place.