Rise of the Machines: Why It’s Time to Invest in Robots

Intuitive Surgical, Inc. (NASDAQ:ISRG)

If you’ve been lucky enough to avoid operating rooms over the past decade or so, you’re probably unaware of the rise of robotics in the sensitive area of surgery. Intuitive Surgical, Inc. (NASDAQ:ISRG), maker of the da Vinci Surgical System, is the leader in that field. The company’s flagship system, which is controlled by a technician, allows for minimally invasive operations that are capable of performing delicate tasks with a greater range of motion than is possible for a human. Intuitive’s sales jumped by 25% in the first-quarter, while global procedures grew by 15% as more and more hospitals add the invaluable device to their repertoires.

Intuitive Surgical, Inc. (NASDAQ:ISRG) was a hit among the hedge funds in our database during the fourth-quarter of 2017, as ownership among those funds rose to 39 from 30 during the quarter. Billionaire Ken Fisher‘s fund also opened a position in the stock during the first-quarter.

Cognex Corporation (NASDAQ:CGNX)

A manufacturer of industrial sensors and 2D and 3D vision systems, Cognex Corporation (NASDAQ:CGNX) products can be used for quality control and inspection purposes by a wide-range of industries, allowing them to easily and accurately monitor any number of variables related to their production processes and the quality of their products, in ways that a human simply can’t. Cognex delivered record revenue and earnings in 2017 and its revenue growth was also strong across numerous industries and regions, with Europe again leading the way.

Cognex Corporation (NASDAQ:CGNX) was owned by 28 of the hedge funds in our database at the end of 2017, including Ted Kang‘s Kylin Management and Robert Karr’s Joho Capital, each of which had more than 20% of their 13F portfolios invested in the stock.

iRobot Corporation (NASDAQ:IRBT)

Lastly is iRobot Corporation (NASDAQ:IRBT), the renowned maker of the Roomba. While said device, which merrily and tirelessly travels around rooms vacuuming them, might come across as gimmicky to some (and not much of a threat to people in the cleaning profession), iRobot Corporation (NASDAQ:IRBT) isn’t resting on those laurels. The company has developed several other task-specific cleaning devices, including robot mops and pool cleaning robots. It’s even working on a lawn-mowing robot. More importantly, sales of the Roomba show that it’s anything but a gimmick on the market, as they continue to grow rapidly, and the majority of the market remains untapped.

Hedge funds weren’t big fans of iRobot in the fourth-quarter, as only 11 of the funds that we track were shareholders of the stock at the end of 2017, down from 16 a quarter earlier, as fears of competition in the robot vacuum space intensify. Hedge funds appear to have timed their exits well, as shares of the company have declined by 22% so far this year. However, with huge growth potential in the robot cleaning market, there’s little reason to think iRobot won’t excel long-term even amid some stiffer competition.

Disclosure: None