The beautiful thing about tools and cleaning suppliers is that they almost always have a constant stream of people needing their products. These firms are also able to capitalize on the worldwide expansion of many of the luxuries that the developed world enjoys. These often include devices that require fixing, such as cars and phones.
iRobot will improve through increased exposure
iRobot Corporation (NASDAQ:IRBT) could benefit from advertising its products more. Many of the millions of sales of its robotic vacuum, Roomba, were completed through word-of-mouth. With that kind of product appeal, the company could gain a slew of new customers if the product were more widely advertised. That massive number of sales tells me that the company has what it takes to offer people what they want, and that is a sign that the firm will grow its profits in the years ahead.
The company’s robotic vacuum blueprint is also protected by a patent, meaning that the firm has been able to fend off competition since the Roomba’s release in 2002. Smaller companies are now developing similar products with different technology, though a release significant enough to compete with iRobot Corporation (NASDAQ:IRBT) hasn’t hit the markets yet.
The firm is planning to develop other robotic devices, such as robots to clean pools and complete various household tasks in addition to vacuuming. These are segments where there is more competition, however. The increased competition could hinder the company’s ability to grow its product offerings.
Snap-on focuses internationally
Snap-on Incorporated (NYSE:SNA) has the right idea with its focus on emerging markets. The company’s management has said that it is dedicated to improving the firm’s exposure overseas, and this will help it to profit from the increasing disposable incomes in developing nations. I think that the company is doing it the right way by focusing on vehicle repair and mobile tools, segments that are likely to grow as more people in emerging economies start driving and buying cell phones.
About one third of the company’s business is focused on an information and repair system in the vehicle market. That exposure will likely help the company to increase its profits because vehicles are becoming progressively more complex. This makes investing in a diagnostics and parts providers such as Snap-on Incorporated (NYSE:SNA) a great call.
The company is also making a name for itself as a leader in quality. That can help it to enter highly specialized markets such as aviation, aerospace, power generation, and oil and gas. These extremely lucrative operations present the company with the potential to realize massive profit margins, since the equipment provided is usually packed with a premium.
Black & Decker improves product portfolio
Stanley Black & Decker, Inc. (NYSE:SWK) recently increased its market share by purchasing GQ. This will obviously allow it to gain more customers, but more importantly it makes it exceedingly difficult for competitors to attempt to steal its glory. The larger the firm is, the bigger the portfolio of products it has and the more opportunities it has to sell new products to existing customers.
A larger product portfolio will also help the firm key in to what emerging markets are demanding. The company forecasted that international expansion will account for 2% of its growth this year. I am extremely bullish on stocks exposed to international markets, but it is only a good idea to invest in companies with large international exposure if you plan to keep them for the long-term. It is difficult, if not impossible, to predict whether or not nations will prosper in the short term, let alone individual companies.
The futures of these prospects is bright
These three companies represent ways that investors can increase their exposure to developing nations by buying companies that often sell to the same customers for many years. iRobot Corporation (NASDAQ:IRBT) is proving that it is able to make its customer base happy, and it is only a matter of time before sales start ramping up both domestically and in the developing world. Snap-on Incorporated (NYSE:SNA) and Stanley Black & Decker, Inc. (NYSE:SWK) are firms that have the ability to sell a cross-section of products to individual customers, repeating these sales long into the future.
The article 3 Firms that will Profit From the Booming International Market originally appeared on Fool.com and is written by Phillip Woolgar.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends iRobot.
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