The Bot Brief

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

Bots in The News:

This week the stock markets were impacted by the 2023 March calendar quarter’s GDP numbers and early corporate earnings reports. While the GDP announcement of an annualized 1.1% growth for the domestic economy was well below expectations for a 2% expansion, much of the weakness was attributed to inventory destocking. In fact, the silver lining to the report was that consumer spending increased a robust 3.7%. Within that number was a recovery in household spending on goods, which jumped 6.5%. Automobile purchases were strong, however, the impact on high rates continued to negatively influence home buying.

Several the holdings within the Bot Index reported first quarter earnings, which impacted their stock prices during the week. The best performance was turned in by the Cyberknife company Accuray Incorporated.  The quarter showed a 22% expansion in revenues and a gain of $600,000 in earnings versus a loss of $1 million in last year’s comparable quarter. The report boosted Accuray’s stock price by 14.38% for the week.

Oceaneering International’s stock rose 4% for the week following its announced 20% increase in revenues and a profit of $4 million versus a loss of nearly $20 million last year. The only thing that restrained the stock from moving higher was the expectation from Wall Street analysts that the company would announce an $8 million earnings trajectory.

Immersion Corp. was the worst performer, sliding 10.34 percent. Over the past twelve months the stock has nearly doubled in value, however, since late March investors have been taking profits.

A Wall Street Journal report on a cyberattack on the logistics company – Expeditors International had repercussions on the stock of iRobot Corp. The stock fell 9.38% following the article as information of the impact to iRobot of the cyber-attack was revealed. Negotiations with Expeditors in 2022 led iRobot to sue in January, according to court papers. According to the Journal, “The company{iRobot}accused its logistics provider of 15 years of breaching contractual promises to ship products and provide real-time data on inventory.”

NIO Inc. produced the third poorest showing for the week with its 5.52% retreat. The stock has been all over the board for the past year’s trading pattern. This latest decline was due, in part, to a recent Zack’s analysis that “Consensus EPS estimates have moved 27.4% lower within the past month. NIO Inc. is currently sporting a Zacks Rank of #4 (Sell).

Buzzing Around:

One of our colleagues sent us a video produced in December of 2017 by U.C. Berkely professor Stuart Russell regarding drone warfare. The production was a mock-up of the potential of AI enhanced drones that can be held in the hand that are, according to the professor, virtually indefensible. Working in unison, the drones can be programed to use facial recognition to autonomously seek out targets {human} and deliver a killing dose of 3 grams of shaped explosives. The feature was produced to dramatize the impact of such a new weapon of mass destruction that could replace nuclear bombs. In fact, such attacks could be impossible to trace, delivered through unconventional sources and virtually unstoppable when released. Clearly, the professor’s message is the dire need for some recognition and regulation of the changing technology that will impact the whole human race.

Another, more friendly aspect of drone application, was a feature we saw regarding the use of drones for aerial crop dusting. Guardian Agriculture has been approved for commercial use of its large vertical takeoff and landing (eVTOL) crafts. The $300,000 drones are quite large and can carry enough seed, fertilizer, or insecticides to cover a significant area at once. The company’s founder indicates he has already obtained more than $100 million in orders.

Some years ago, Balcones Investment Research conducted a report on the shrinking of arable land for crop production. One of the interesting findings was the impact of tractor ruts contribution to the reduction as the topsoil was continually compressed under the weight of the tires. Perhaps, the Guardian’s agricultural solutions will have some positive unintended consequences as well as the efficiencies it provides.

Member: American Economic Association, Society of Professional Journalists, United States Press Association. Institute of Chartered Financial Analysts, Robotic Industries Association (now A3 Automation), 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 view 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 the material presented.