The robot revolution is coming: 5 stocks leading the way

Kanish Chugh

Global X ETFs Australia

Companies have been adopting robotics and automation into their businesses for many decades now. Robots are essentially programmable machines and can offer businesses greater productivity. Unlike their human counterparts, robots are also able to work endlessly—days, nights, weekends and holidays. They are also better suited to repetitive and mundane tasks, which humans can find boring and disengaging.

But robots also offer answers to demographic questions: labour shortfalls are on the horizon brought on by the global ageing population. Countries such as Japan – where the robotics industry is among the most developed in the world – are already leaning on robotics and automation to plug the gap.

The companies listed below are all found in the ETF Securities ROBO Global Robotics & Automation ETF (ASX:ROBO). 

Materialise NV (NASDAQ: MTLS)

Materialise NV is a Belgian 3D printing and software company. It specialises in the 3D printing of healthcare products but has recently expanded into metal manufacturing. To give examples, for medical printing they can create personalised implants like dental implants, prosthetic limbs or create 3D models of hearts for surgeons. Its 3D printing software is widely regarded as the best in the market and used by a range of companies.

Zebra Technologies (NASDAQ: ZBRA)

Zebra Technologies makes barcode scanners and printers, which help companies track their assets. Zebra has benefitted from e-commerce and the growing use of warehouses, which require vast electronic cataloguing systems in order to automate delivery. Many companies use Zebra’s barcoding system to make their operations more efficient. Zebra has also benefited from hospitals using barcode technology to keep track of specific samples and medicines.

Kohyoung Technology (KOSDAQ: 098460)

Kohyoung Technology is a Korean business that helps factories make better electrical equipment and remove defects. It does this by making computers that can detect soldering defects on circuit boards, a crucial component given that over 70% of defects can be traced back to bad soldering. Kohyoung has marquee customers such as Apple, Samsung and Tesla.

iRobot Corporation (NASDAQ: IRBT)

iRobot Corporation arose from humble beginnings as an MIT startup. It builds robots that are used at home as well as by the military and police. Its most famous robot is its vacuum cleaner “Roomba”, which is used in millions of households worldwide. iRobot’s military robots are used for bomb disposals and entering environments that are too dangerous for humans.

Hexagon AB (STOCKHOLM: HEXA-B)

Hexagon AB is a Swedish business that makes sensors and measuring machines such as level meters and total stations. Its technology is often used as component parts for robots that require sensors for their navigation systems. It has recently been boosted by the logistics and e-commerce sector thanks to the coronavirus, as robots in warehouses require accurate sensors and detection systems. Its measuring equipment and software also have engineering and construction applications.

The companies above feed up into the wider megatrend of robotics, automation and AI, which is well-positioned for strong growth in the future. The global industrial automation market size projected to reach US$352bn by 20241 and the global artificial intelligence market expected to reach US$733.7bn by 20272. China in particular is anticipated to be a major market for industrial robots in the coming years. In 2019 China’s robot density was 187 robots per 10,000 human employees compared to Singapore at 9183, offering enormous penetration potential.

Investors can consider direct shares in RAAI companies such as the examples given or investing in the wider theme such as through an ETF like the ETFS ROBO Global Robotics and Automation ETF.

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Footnotes

  1. https://www.roboglobal.com/wp-content/uploads/2019/08/ROBOGLOBAL_INVESTMENT-CASE_6_2019_P2.pdf
  2. https://www.grandviewresearch.com/press-release/global-artificial-intelligence-ai-market
  3. https://ifr.org/downloads/press2018/Robot_density_by_country_2019_-_chart.png



1 stock mentioned

Kanish Chugh
ETF Specialist & Head of Distribution
Global X ETFs Australia

Kanish Chugh is responsible for distribution covering sales and marketing strategy for institutional, intermediary and retail clients. He joined Global X ETFs Australia in 2015 and has previous experience with Fidelity International, BlackRock and...

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