Weekly Bot Brief Newsletter on Robotics 8/13/2021
"There is no force on earth more powerful than an idea whose time has come." — Victor Hugo
Bots in The News:
Earning season reports for the June quarter had an impact on this week’s trading. The Bot Index slid forty-five basis points as investors interpreted the results of four of the index’s components. The S & P 500 meanwhile gained .71%, besting the bots for the second consecutive week. There has been a notable shift in the risk-on trade as ‘value’ investment strategies are starting to emerge over ‘growth’ investments. With the high growth, high beta and high PE dominance within the robotic sector, this shift may account for some of the recent performance differential.
During the week there were only three components that experienced any relatively significant gains. While iRobot rose 4.12% and Yaskawa Electric jumped 3.72%, the clear winner in the positive column was 3D Systems. DDD’s near 9% gain this week follows three consecutive like periods of positive reports, moving the stock from $25.30 to $30.14. The stock improved as a result of its second quarter sales growth of 45% YOY and GAAP earnings loss of 8 cents versus last year’s loss of 33 cents. The stock would have had an even greater week had not two Wall Street analysts reduced their price targets on Friday, thus removing about 10% from the weekly tally.
The poorest performers of the Bot Index were all as a result of their earnings and revenue reports. The second worst performer was NIO Ltd. whose stock slid 6.41% during the week. The company reported excellent results, however, management’s guidance for the current quarter disappointed the investment community. In its report, management suggested that the third quarter vehicle shipments should fall in line within a range of 23k to 26k. Not an impressive figure from the 21.9k number from the prior quarter.
Accuray Inc. set the record for the weakest of the bot components as it fell 8.06%. The inventor of the ‘cyberknife’ device used in certain surgical procedures, felt the impact of covid on hospital electives, restraining earnings to a loss of one cent, the same as last year’s report. On a more positive note, the revenue picture was excellent as sales increased over 16%.
Finally, Cognex Corp. declined 4.8% on top of the prior week’s 4.6% slide despite reporting a $.43 third quarter versus YOY loss of one cent. Revenues gained over $100 million to $269.16 million during the quarter as well. Despite these encouraging numbers, investors clearly were disappointed that the earnings represented only a one cent up ‘surprise’ and not enough to justify its fifty times multiple.
Other decliners during the week included AeroVironment who fell 3.92% and Farodropped 3.48%. The AVAV slide was based upon no news but on significantly reduced daily volume.
The Amazingness of Human Engineering Skills:
For those who have been fortunate enough to enjoy the three seasons of Prime Video’s Clarkson’s Farm, you have certainly enjoyed the bungling machinations of Jeremy Clarkson, farm owner, race car driver and author. Having purchased a 1,000-acre farm in Oxfordshire, England the host of this ‘reality comedy/drama attempted to apply modern city logic to traditional farming procedures. While his attempts at his version of farming was certainly entertaining, Clarkson was forced to enlist the equipment and skills of a fellow farmer in the harvesting process. In one of the features, oil-seed rape was reaped with the assistance of a massive harvester. Mr. Clarkson was awe inspired by the ability of the columbine to cut the rape stalks, separate the chafe from the tiny seeds, discard the chafe and distribute the 2mm seeds into a lorry running along side the columbine. All this occurring while maintaining a continual operation through the furrows of the field. Certainly, columbines have been conducting these various tasks for many years, and no one considers them as ‘robotic.’ They are, however, managing the exact same task as what we think of as today’s robots – aiding to productivity. Certainly, Mr. Clarkson would have never been able to garner the mere 144 pounds of profit from his 1000 acres had it not been for the ability of this unique form of robot!
In another example of human engineering capability, The Economist wrote a piece on a recent interpretation of an ancient Babylonian tablet. Entitled ‘No Need for a Protractor’ the feature described the efforts of Daniel Mansfield, a math scholar at the University of New South Wales, to uncover the use of the tablet’s version of the Pythagorean theory. The theory states that the area of the square of the hypotenuse of a right triangle is equal to the squares of the remaining two sides. Mr. Mansfield speculated that the ancient (3,700 years ago) tablet was using measurements of square and triangular parcels of land in the commerce of real estate transactions. All this developed 1000 years before Pythagoras explained his mathematical theorem before The School of Athens. Perhaps we give less credit to the intellect and practicality of our forefathers.
Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association, Member IEEE.
The 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 in the brief 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.