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Weekly Bot Brief Newsletter on Robotics 3/07/2020

POSTED 03/08/2020

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

Bots in the News:Bot Index vs. S&P 500, 3-7-2020

The wild ride of intraweek trading ended with not much progress for either bull or bear. The S & P 500 actually rose over one-half percent while the high-beta bots declined only 1.27%. The best performer within the Bot Index was AeroVironment, a drone manufacturer, who fortunes rose 19%. This week, investors looked more closely at the reported earnings which led the stock down around 19% the previous week. Specifically, management improved its guidance for the entire year and the research firm Zachs upgraded the stock to a ‘buy’ recommendation. 

Qiagen N.V. jumped 15.79% when it was announced that management allowed the company to be acquired by Thermo Fischer. The accepted offering price, at $43.36, was 23% above the prior day’s close. The closing price for the week was $41.57, leaving a 4.3% arbitrage trading value.

Apple rose 5.70% as the number of new cases of the coronavirus in China fell. Since Apple’s supply chain is heavily dependent upon Chinese labor, the report was viewed favorably by investors.

Intuitive Surgical gained almost 4% due to an article by Zachs Research entitled, “Here’s Why You Should Invest in Intuitive Surgical Stock Now!” Interestingly, Investors Business Daily published a similar report with a conclusion that it is too early to buy. Clearly a mixed opinion.

Finally, among the biggest winners was Lockheed Martin who increased 3.41%. The company was awarded a $141 million contract for the F-35 from the U.S. Navy. In addition, with the cutting of rates by the Fed, the 2.5% yield started to look attractive for investors that need yield plus investment in growth defense names.

The worst performer of the bots was clearly Oceaneering International whose decline of 22% was prefaced upon its reliance on oil prices. OPEC and other oil producers failed to agree on production cuts, leading Morgan Stanley to forecast that West Texas Intermediate Oil would drop to $30 per barrel from the already depressed current $41.28.

The Chinese automaker NIO Corp. fell 14% following a Citibank reduction of its appraisal of the stock from Buy to Neutral and lowered its target price to $4.30 from $6.80. The stock closed the week at $3.55.

Finally, joining the losers was Immersion Corp. that fell 13% on top of the prior week’s 13.52% drop. Investors have grown weary of continued losses. The recent quarter noted a $.10 per share decline in non-GAP earnings in the reported quarter.

Bot Index For the 2020 Decade:

2020 Bot Index vs. S & P 500, 3-7-2020

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.