In this article we will take a look at the 10 best robotics stocks for 2021. You can skip our detailed analysis of the robotics industry’s outlook for 2021 and some of the major growth catalysts for robotics stocks and go directly to 5 Best Robotics Stocks For 2021.
Governments and organizations around the world have been soliciting proposals for increased automation in industry and management as they aim to implement the lessons of the COVID-19 pandemic on a large scale. The robotics industry, forecast to grow at a compound annual growth rate of 26% till 2025, is set to see record profits. Dublin-based firm Research and Markets reveals that global robotic sales stood at $40 billion in 2019, with the number set to increase in 2021.
Growth Catalysts for Robot Stocks
Even though robots have been around since the 1960s and there has been a steady uptick in robotics sales over the past few decades, the automation revolution has picked up in the last ten years as technological breakthroughs, rising labor costs, and decreasing equipment costs force industries to turn towards robotics. According to global management consultancy McKinsey, the main drivers triggering investment in automation also include improved capabilities of robots, unburdening of employees, and brand perceptions around new technologies.
McKinsey research outlines that some industries stand to gain from these changes than others. For example, the automotive, electronic, and pharma industries are set to witness a dramatic increase in investment towards automation. Some of these predictions are already coming true, as Tesla, Inc. (NASDAQ: TSLA) CEO Elon Musk aggressively pushes for automation of the electric carmaker as demand for electric vehicles rises globally. Even Apple Inc. (NASDAQ: AAPL) has moved towards automation in electronics manufacturing.
In addition to these changes on an industrial scale, robots are fast penetrating daily life as well. A report published in the Harvard Business Review claims that automations are now disrupting the retail business as companies deploy robots to meet consumer demands in retail stores. For example, Amazon.com, Inc. (NASDAQ: AMZN) is already operating fully digital stories staffed by robots and machines only. Even hotels and home improvement outlets have turned their attention to the automation of their businesses and its benefits.
It is quite clear that the industry outlook for robotics is positive for the coming years, but investors need to be cautious about the drives of change in the different industries where robotics plays an important part. For example, automakers deploy robots for production flexibility, whereas the electronics industry uses them for testing the quality of their products. The pharma industry invests for robot capabilities. Cost and compatibility are potential roadblocks to the growth of robots across the world. The robots market was valued at $26.3 billion in 2020 as the COVID-19 pandemic hit the markets globally.
Many fear that robots would take away our jobs and add to the problems of the already-worsening economic situation that has clobbered even the elite hedge funds. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and February 26th 2021 our monthly newsletter’s stock picks returned 197.2%, vs. 72.4% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). We were also able to identify in advance a select group of hedge fund holdings that significantly underperformed the market. We have been tracking and sharing the list of these stocks since February 2017 and they lost 13% through November 16th. That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
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With this context in mind, here are our picks for the top 10 best robotics stocks for 2021.
Best Robotics Stocks To Buy Now
10. General Electric Company (NYSE: GE)
General Electric Company (NYSE: GE) is a Boston-based multinational company operating in aviation, healthcare, electronics, power, and other industries. The firm has a robotics and autonomous systems section that focuses on robotic systems that enable automation of industrial processes. For example, the company is building a Supervised Robotic Squadron (SuperRSquad), a network of drones that can manage a business asset remotely without satellite connectivity. It is also working on robots that can carry out repairs in small spaces.
The company has a market cap of more than $119 billion and posted a revenue of close to $80 billion in December 2020. Last month, Bank of America retained a Buy rating on General Electric stock with a price target of $15. Analysts at the bank projected a positive outlook for the firm in 2021 predicted the investor base of the firm to broaden in the coming years. A few weeks before the Bank of America maintained the GE rating, Deutsche Bank raised the price target of the firm to $14 from $13. GE is placed 10th on our list of best robotics stocks for 2021
At the end of the fourth quarter of 2020, 69 hedge funds out of 887 in the Insider Monkey database held stakes in General Electric, up from 45 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $51.6 billion, up from $21.7 billion in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Eagle Capital Management held the most shares 125.1 million – worth more than $1.3 billion. Pzena Investment Management was 2nd with 89.9 million shares worth almost $1 billion.
9. Northrop Grumman Corporation (NYSE: NOC)
Northrop Grumman Corporation (NYSE: NOC) is a Colorado-based multinational aerospace and defense company. It is one of the world’s largest weapons manufacturers and military technology providers. The company has a robotics division named Northrop Grumman Remotec that develops mobile robot systems for deployment in hazardous operations. The Remotec ANDROS robots series is a global leader for use in bomb disposal, reconnaissance, first responder missions, and SWAT military operations.
The company has a market cap of more than $54 billion and posted more than $36 billion in revenue in December 2020. Last month, the firm secured more than $450 million worth of contracts with the US Navy and US Air Force for equipment modifications. The company has been consistently profitable and earned investors $19 per share over the past twelve months. The company is also posting a steady uptick in annual growth of revenue. Northrop Grumman is thus placed ninth on our list of top 10 best robotics stocks for 2021.
At the end of the fourth quarter, 40 hedge funds out of 887 in the Insider Monkey database held stakes in Northrop Grumman, down from 42 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $1.7 billion, up from $840 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, New York-based investment management firm D.E. Shaw held the most shares – 879,047 – worth more than $267 million. Arrowstreet Capital was 2nd with 872,092 shares worth more than $260 million.
8. iRobot Corporation (NASDAQ: IRBT)
iRobot Corporation (NASDAQ: IRBT) is a Bedford-based company that designs and builds consumer robots. The products that the company markets include Roomba (a robot vacuum), Braava (robot mops), iRobot (a bundle that includes vacuums and mops), and Root (coding robots that help children learn how to code). The company is using artificial-intelligence powered software to make these robots more productive in home environments.
The firm has a market cap of over $3.3 billion and posted a revenue of more than $1.43 billion in January 2020. Earlier this month, the company said it planned to enhance product offerings to increase consumer interest in their offerings. In light of these growth plans, global investment banking firm JP Morgan updated the company to an Overweight rating from Neutral with a price target of $166. JP Morgan said it was impressed by the plans of the company to diversify manufacturing and expected 2021 to be an investment year for the firm.
At the end of Q4 2020, 22 hedge funds out of 887 in the Insider Monkey database held stakes in Robot Corporation, down from 25 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $167 million, up from 162 million in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Boston-based investment management firm Arrowstreet Capital held the most shares – 522,623 – worth $41 million. Citadel Investment Group was 2nd with 475,800 shares worth more than $38 million.
7. Deere & Company (NYSE: DE)
Deere & Company (NYSE: DE) is an Illinois-based company that manufactures heavy equipment for farming, forestry, construction and other industries. The company operates a precision agriculture department that has developed autonomous electric tractors for use on farms for better crop yields at lower costs. It also offers an autonomous drone that sprays farm-care products on crops to protect and nourish them. The firm is also exploring ways to automate farm-related decision-making using machine learning.
The company has a market cap of more than $118 billion and posted more than $35 billion in revenue in November 2020. Earlier this year, the company declared a quarterly dividend of $0.9 per share, up more than 18% from the previous quarter. In February, the company shares jumped to record highs after it lifted earnings estimates above market expectations amid improving farm economy and improving crop prices. The company is also implementing cost control measures that are likely to push operating margins higher this year.
At the end of Q4, 54 hedge funds out of 887 in the Insider Monkey database held stakes in Deere & Company, up from 42 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $18 billion, up from 13 billion in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, New York-based investment management firm First Eagle Investment Management held the most shares – 2,571,641 – worth $6.9 billion. Greenhaven Associates was 2nd with 1,430,372 shares worth more than $3.8 billion.
6. Intuitive Surgical, Inc. (NASDAQ: ISRG)
Intuitive Surgical, Inc. (NASDAQ: ISRG) is a California-based company that designs and develops robotic products for improved clinical efficiency in surgical processes. The firm has a da Vinci platform that markets several robotics products for use in surgery, including instruments and software-related services. Some of the popular products include Force Bipolar, a tool for increased grip strength, and Single Site, a precision incision instrument. The company also makes products related to energy and vision for clinical surgeries.
It has a market cap of over $92 billion and posted more than $4.3 billion in revenue in December 2020. Earlier this year, Florida-based financial services firm Raymond James maintained an Outperform rating on the company, raising the share price target to $865 from $860. The services firm reiterated that even though Q1 results of the firm were expected to be in line with COVID-19 estimates, the performance for the rest of the year would consistently improve as the COVID-19 situation became less worrisome.
At the end of Q4, 49 hedge funds out of 887 in the Insider Monkey database held stakes in Intuitive Surgical, Inc., down from 50 out of 817 in Q3 2020. The total value of the shares held by these hedge funds in Q4 2020 was over $1.8 billion, up from 1.3 billion in the preceding quarter. Out of the hedge funds being tracked by Insider Monkey, Washington-based investment management firm Fisher Asset Management held the most shares – 1,223,409 – of the company. Citadel Investment Group was 2nd with 268,255 shares worth more than $268 million.
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Disclosure: None. 10 Best Robotics Stocks For 2021 is originally published on Insider Monkey.
