Editor's Choice

2012 Robotic Stocks Wrap-up

Frank is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

By Frank Tobe, Editor and Publisher, The Robot Report

If an enterprising firm set up a mutual fund reflecting the worldwide robotics industry, they might choose to separate their picks into three segments, which might look something like this:

  1. Industrial Robot Manufacturers
  2. Service Robot Makers of security, defense and space robots
  3. Service Robot Makers of robots for all other purposes

Although I am neither a broker nor an analyst, I do track the business of robotics and the performance of those companies within the industry publicly traded on various global stock exchanges. In fact, I started compiling and tracking the stocks at the end of 2007, and set up a comparative index, Robo-Stox™, because no brokerage or mutual fund firm had such a fund or funds or index. I began this just in time to watch the stocks tank in 2008 and 2009 and recover in 2010 through 2012. What follows is a wrap-up of what I found of particular interest in 2012.

<img border="0" height="245" src="http://3.bp.blogspot.com/-2pIXZxb6FNY/UORU-ZuzScI/AAAAAAAACEo/0DLRcuCkhm8/s400/5-year-performance-report.gif" width="400" />

As can be seen from this 5-year Robo-Stox™ chart, not all stocks have fully recovered their 2007 year-end highs; the average stock hasn't... but many have succeeded in full recovery, particularly in the non-industrial sector. And, as can be seen from the Big-4 chart below, the biggest industrial robot manufacturers did quite well in 2012.

Industrial robot manufacturers
Japanese industrial robot manufacturers did well for the year: all but two were up YTD and the group beat the Dow Jones Industrial Average's (DJIA) 7.3% gain for the year. More than half of the stocks in the index have recovered from their 2008 lows.
The Big Four robot makers (ABB (NYSE: ABB), Yaskawa Motoman (TYO: 6506), Fanuc (TYO: 6954) and KUKA (ETR: KU2)) did particularly well and all had double-digit gains compared to the DJIA.

KUKA's stock was up 22% for the year -- the standout performer of the group. KUKA AG has invested heavily in facilities and marketing in China and their long-term prospects appear to be good.
Canadian, US and European industrial robot makers did similar to Japan -- slightly beating the DJIA's 7.3% gain for the year with about half having returned to their 2007 highs. I don't know what happened in Korea; almost all of their stocks had a wobbly year with end-of-year prices near the lows for the year.
Service Robot Manufacturers
Healthcare and medical:

Service robot companies, particularly high-tech medical/surgical stocks had a very mixed year.
  • MAKO Surgical (NASDAQ: MAKO) had two serious slides during the year taking the stock from a high of $44 to its present low of $12 -- all because of missed analyst expectations. 
  • Intuitive Surgical (NASDAQ: ISRG) (of da Vinci Surgical Robot fame) also had a roller coaster year with a high of $588, a low of $440, and ended literally where it began the year. 
Few companies beat the NASDAQ, which was up 15.9% for the year, but here are a few standouts:
  • Accuray (NASDAQ: ARAY), whose robotic radiation therapy Cyberknife did quite well during the year, was up 42% from $4.43 to $6.31 at year-end.
  • Swisslog Holdings' stock, traded on the Swiss Stock Exchange (SLOG: SW), was up more than 45% for the year. Their pill-making and dispensing systems and hospital tugs are doing well and their warehousing robots are also benefiting from the trend to automate distribution centers.
  • Israel's Mazor Robotics (MZOR: IT) and their spine implant system did well too -- up from $110 at the beginning of the year to $229 at year's end!
Military, defense and security:

The cutback in US military spending has had a mixed effect on service robot makers and appears to depend on how broadly they have been able to adapt their products to global security and defense needs:
  • iRobot (NASDAQ: IRBT), similar to MAKO Surgical, also had two serious stock drops during the year -- both caused by the company having to restate expectations because of government cutbacks even though revenues from the military represent only a third of gross revenues.
  • QinetiQ Group PLC (QQ: LN), on the other hand, a British company, gets 100% of its revenue from governmental sources. Its stock was up more than 35% for the year as were its profits.
  • Many conglomerates have subsidiaries that produce unmanned air, sea and land robots (and their support systems) for defense and security governmental agencies. This is a global market with global players. Elbit Systems (NASDAQ: ESLT), an Israeli company, is a case in point. They have a big UAV operation but that unit's revenues are just a small portion of those from the overal company, thus their stock is certainly not a robotics pure play. Elbit's stock, which had a long slide and a short recovery during 2012, broke even for the year.
Bottom line
  • Industrial robotic providers had a good year
  • Military robot makers saw governmental cutbacks reflected in their stock prices and are widening their sales and transforming their products to sell to municipal governments 
  • Surgical and hospital service robot suppliers had a mixed year, the former held up by patents and FDA approvals, the latter (eg, Swisslog) did quite well.
  • Most other new-tech robotic companies are privately or equity-fund held, hence, no idea as to their results other than news about contracts received. For example, venture funded Liquid Robotics, during 2012, established a new joint venture with oil conglomerate Schlumberger and a new naval division for governmental and Navy contracts. Wouldn't you like to own a few shares of that company?
2012 was a good year for many robotics companies and 2013 seems like it will continue the momentum of equal parts finding robotic solutions to workplace needs but also crowd-funded wild ideas and other digressions.

Also see Filling a need... or feeding a diversion for more stock info.

TheRobotReport has no position in any stocks mentioned. The Motley Fool recommends Intuitive Surgical, iRobot , and MAKO Surgical . The Motley Fool owns shares of Intuitive Surgical and MAKO Surgical . Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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