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Special Year-End Edition of the Bot Brief newsletter on Robotic Investment Performance for 2020

POSTED 01/03/2021

"There is no force on earth more powerful than an idea whose time has come."   - Victor Hugo

Bots in The News:

The year 2020 was one of consistent surprises. The impact of the coronavirus on the economy would logically imply a poor stock market while earnings were ratcheted down as companies faced significant challenges in their normal operations. Employees were released or furloughed, companies faced bankruptcies, social sequestrations and a contentious election season do not provide the ‘predictability’ in which markets traditionally prosper. However, going back to the old adage that states, “The market always fools the rehearsed response and the traditional reaction” held true. For the entire year, the NASDAQ produced a 43.64% return while the S & P 500’s gain was 16.26%. Hardly, the market results that such a tenuous environment would suggest!

The Bot Index performance versus both the NASDAQ and the S & P 500 provides another example of how investors are perceiving the potential that robotics will have on the economy. For the entire year, the bots gained a massive 60.60% increase in value. Much of the engine of that performance came from Tesla who rose 743.40% after it entered the Bot Index following its replacement of Qiagen N.V. who was acquired by Thermo Fisher. However, Tesla’s international EV rival, NIO Ltd. emerged like the phoenix from certain bankruptcy to rise from $4.02 to close the year at $48.74, an 1,111.04% gain. The third bot component that increased more than 100% was NVIDA Corp. (+123.49%). Other major contributors during the year included Apple (+82.32%), Amazon (+76.25%), Brooks Automation (+63.06%), Keyence Corp. (+59.79%), iRobot (+58.58%) OMRON Corp. (+54.25%) and Immersion Corp. (51.95%).

There were three corporations that actually fell during this rather robust year: Oceaneering International declined 46.68%, and the two defense manufacturers Lockheed Martin and Northrup Grumman slid 8.36% and 11.41% respectively.

Corporate Actions During the Year:

During the year United Technologies conducted a special corporate action and the result was a spin-off of a new company -Raytheon Technologies in April. Since that occurrence, the company’s stock gained 42%. Apple and Tesla experienced 4 for 1 and 5 for 1 stock splits respectively. Brooks Automation replaced Ekso Bionics who underwent a reverse one-for-five stock split when the price was trading in the pennies. Its trading pattern, at that time, was so erratic and the price was so low that virtually any move in either positive or negative fashion resulted in a percentage change that did not fulfill the objectives of the Bot Index.

Bots This Week:

In the final week of 2020, the abbreviated trading saw the Bot Index gain just under one percentage point. There were four gainers in excess of 5%: Immersion Corp., Tesla, NIO Ltd. and Keyence Corp. Of the four Immersion Corp.’s 26.43% upsurge was the most significant. The company has noted a strong trading pattern since October 31st, having almost doubled. The company was selected to produce its haptic (touch) technology in the new Sony Playstation 5 which is experiencing enormous demand.

The Index had four companies whose stock fortunes were less that desirable to end the year. Brooks Automation fell 9.47% to lead the weakest performers. The company experienced significant selling pressure following the announcement that it would be moved to a vacancy in the S & P 400 Mid-Cap index from the S & P 600 Small Cap. That move required index-based funds to remove the stock, thus the 2.45 million share trade on December 31 (8x normal volume). Our expectation is that the stock will bounce back next week as indexes that emulate the S & P 400 will have to make purchases. Other weakness was noted by 3D Systems (-9.26%), iRobot Corp. (-6.47%) and Accuray Inc. (-5.87).

 

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.

Bot Brief is a weekly newsletter designed for economists, investment specialists, journalists, and academicians. It receives no remuneration from any companies that may from time to time be featured and its commentaries, analysis, opinions, and research represent the subjective views of Balcones Investment Research, LLC. Due to the complex and rapidly changing nature of the subject matter, the company makes no assurances as to the absolute accuracy of material presented.