Robotics in the First Quarter of 2021

A major shift away from growth and into value and cyclical stocks took the wind out of the sails of most technology-related stocks, which encumbered many in the Robotics and Automation space for the first quarter of 2021. International equities also underperformed, producing less than half the gains of their domestic counterparts. Meanwhile, small-cap stocks dominated large-cap issues in the US. From a sector perspective, Energy and Financials led the benchmark, followed by Industrials, Materials, Real Estate, and Communications. Whereas Discretionary, Health Care, Technology, Utilities and Staples all lagged the benchmark in that order.  Specifically as it relates to robotics and automation stocks was the collapse in the momentum factor during the quarter.

4 Robotic & Automation Stock Ideas:

Stereotaxis (STXS) posted a 32.02% gain during the period. The company develops and manufactures robotic systems, instruments, and information solutions for the interventional laboratory. Their “Genesis” Robotic Magnetic Navigation technology has been heralded as the future of Electrophysiology.

AeroVironment (AVAV), a maker of unmanned aircraft used in military and border patrol operations, as well as in certain commercial applications saw a 33.56% gain during the quarter.

Brooks Automation (BRKS) added another 20.50% over the quarter. They appear poised to benefit greatly from the onshoring of new semiconductor manufacturing capacity in the US over the next two years. Their state-of-the-art wafer handling robotics and contamination control systems are the posterchild for factory automation in the semiconductor industry.

Microbot Medical (MBOT), which gained by 23.51% during the quarter, has a patented, revolutionary micro-robotic medical technology with the potential to change the future of medicine. “Liberty” is a fully-disposable, non-capital intensive, portable and remote-controlled robotic system for endoluminal surgical procedures.

While these stocks performed well, there were a few underperforming companies in the robotics and automation field.  Intuitive Surgical (ISRG), Daifuku (6383 JP), Harmonic Drive Systems (6324 JP), and Keyence (6861 JP) all declined between 9.68% and 24.10%.  There are two common threads that link the underperformance of these companies during the quarter; first and foremost was that three of the four had stellar performance in 2020 and had their stock prices extended and in need of a correction.  The second common thread is that three of the four are Japanese companies.  As such, they were negatively impacted by pronounced strength in the USDJPY exchange rate during the quarter.

The pandemic has highlighted the urgent need for robotics and automation support across the world’s supply chains, manufacturing capacity, and distribution channels at large.

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