Weekly Bot Brief on Robotic Research and Investment Review 1-11-2019
"There is no force on earth more powerful than an idea whose time has come" -Victor Hugo
Bot Index Highlights:
The second week of the new year proved positive for both the general market and the Bot Index. For three weeks in a row, the bots outperformed the S & P 500, this time by a margin of 4.66% versus 2.54%. The Bot Index was aided by four components that experienced double-digit gains and three other companies which contributed better than 5% profits for their shareholders. In a follow-up from the prior week’s 12.88% jump (due to an $827.7 million Navy contract and reports of insider buying by the company’s CFO) shares of Oceaneering International provided holders with another gain of 16.05%. Joining the 16%+ club were Accuray Incorporation and Cyberdyne Inc. both of which are low-priced stocks. Accuray has been a steady riser during the past couple of weeks. The low-priced shares have grown from $3.31 in late December to close at $4.00. On the other hand, Cyberdyne has been extraordinarily volatile, ranging from $7.35 to a low of $4.20 before settling at this week’s close of $4.88. Cognex Inc. rounded out the double-digit group with a 10.75% performance. There was an article issued by TheStreet.com noting disruptive technological breakthroughs in indoor agriculture by companies Bowery Co. and Plenty Inc. that utilize vision applications provided by Cognex to more efficiently enhance crop yields. Both companies have gained considerable capital interest in recent weeks.
At the Consumer Electronics Show in Las Vegas, the John Deere exhibit garnered significant attention with its integrated AI, vision systems, internet of things and robotic self driving tractor and combine. The use of NVIDIA Corp. products within the process was highlighted as essential. Shares of NVIDIA rose 9.28%. A Simply Wall Street piece entitled, “Should You Consider AeroVironment” helped to propel the stock by almost 8% and despite negative assessments of the future for 3D printing, shares of 3D Systems gained 8.45%.
After having gained almost 27% two weeks ago, Ekso Bionics gave back 7.83% in this week’s trading. Google dropped 1.26% and two Asian companies – Keyence and Omron Corp. fell 2.30% and .43% respectively.
Bots In The News:
The Economist ran a story in its January 5th issue regarding an in depth look at a company, Arm Holdings, who designs computer chips for a variety of chip producers. Recently purchased by SoftBank, the company is so far ahead in its design concepts that it is giving its new owner a virtual, “Crystal Ball” on the entire tech industry. The company has entered into a variety of new businesses that require advanced chip design and is preparing for the demand for computing power in cell phones, autonomous vehicles and data networks. To stay ahead of the tech trends, it has become something of an “information clearing-house” for future computing applications.
In The Economist’s Schumpeter series, the title, “Robots will help Chinese firms cope with rising wages and the trade war” To stay competitive facing an aging population, rising wages and worker turnover, firms are adding rapidly to their robotic workforce. The article quoted, “In 2017 China’s installations of industrial robots rose by 59% to 138,000, more than in America and Europe combined.
In The American Economic Review, a paper written by Joseph S. Shapiro and Reed Walker, “Why Is Pollution from US Manufacturing Declining? The Role of Environmental Regulation, Productivity and Trade” explored the reasons behind the reduction in air pollution emissions by 60% from 1990 to 2008. The authors’ conclusion was that heavy regulation was the primary cause of the emission reduction. However, a chart of the plant-level pollution to total productivity indicated a distinct negative relationship between pollution per unit of output, thus as total factor productivity increases, pollution per unit of output declines. Most certainly advanced automation production techniques and robotics have contributed to the pollution in U.S. manufacturing.
Finally, as we have been charting the course of the amount of Apple stock required to purchase the most advanced iPhones, we couldn’t help but notice the rising level of the ratio over the past year. In a recent CNBC report, “Retailers are slashing iPhone prices across China as consumers say the phones aren’t worth the cost.” verifies how out of whack the cost of the phones have become relative to the value of the corporation. This is certainly a bad signal that Apple must make some major pricing changes as the article points out the ever-growing level of competition and the resistance by consumers over the lack of technological advances relative to the phone price. The Bot Brief would suggest that Apple cut prices and use its war chest to aggressively accelerate its entry into autonomous autos. The Apple panache can be quickly applied to cars that bear the Apple label.
Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association.
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 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.
Balcones Investment Research can be reached at its website BalconesInvestmentResearch.com and is headquartered in Florida; with offices in Texas and North Carolina, United States
Cover photo courtesy of The Mirror, UK