This week's Barron's was jam-packed with goodies. Here's one of them, June 20:
Humanoid robots are hot, apparently. A China stock index of companies involved with their development is beating the world market by 16 points this year. A new report from UBS says the world will have 300 million humanoids by 2050. An earlier one from Morgan Stanley puts the number at a billion, and the size of the market by then at $5 trillion—twice what the top 20 car makers bring in today.
There are loads of stock picks, for those so inclined. Among UBS’s favorites are Nvidia; a rare-earth metals producer called Lynas; Honeywell; Taiwan Semiconductor Manufacturing; Cognex for machine vision and Amphenol for sensors. Morgan Stanley likes Tesla, Nvidia, and Alphabet, and just published a Humanoid 100 index of companies making all sorts of robo-doodads, from planetary roller screws to harmonic reducers. For investors who want one-click exposure, there’s the newly launched KraneShares Global Humanoid & Embodied Intelligence Index exchange-traded fund, which costs 0.69% a year.
It’s entirely possible that this investing theme is both too late and too early; many of the stocks have run, and the production ramp might not hit big numbers for the better part of a decade. Personally, I’m an anti-themist, preferring to let an S&P 500 fund handle the Darwinian allocation of big companies strangling new markets for profits. But for the robo-curious, let me run through some basics.
Remember back when those videos popped up on YouTube with a headless four-legged robot from Boston Dynamics that could walk and jump and keep its balance when pushed? That was BigDog, created in 2005, with funding from the Defense Advanced Research Projects Agency, or Darpa. It never made it out of boot camp; the gasoline engine was deemed too loud for combat, and a battery version couldn’t carry enough weight.
Today, for $1,600 in China, or $2,500 on Amazon.com, you can buy a UniTree Go2 robot dog that can run, sit, shake hands, stand on its front legs and kick its back legs in the air, and even move autonomously, once the space has been mapped with Lidar. Amazon’s page calls this a toy. UniTree calls it a partner.
For $16,000 in China, or just over $27,000 with U.S. shipping from RobotShop.com, you can step up to the UniTree G1 Humanoid Robot—humanoid meaning humanlike in appearance, with two arms, two legs, a head, and optional dexterous hands. UniTree calls this an agent. It can hop on one leg, crack nuts, open bottles, and flip pancakes—not simultaneously, so far as I know. One thing it can’t do, at just over four feet tall, is reach top shelves. There’s a much more advanced version that’s nearly six feet tall, called H1, that starts at $90,000 in China.
Robots aren’t new as an investing theme. In a 2013 article on the subject, I highlighted three industrial players. Since then, Rockwell Automation and Switzerland’s ABB have quadrupled shareholder money in dollar terms. Germany’s Kuka was bought out by China’s Midea, an appliance maker, in 2016. In a 2017 cover story on robots I mentioned those stocks along with the Robo Global Robotics & Automation ETF, which has since underperformed the market; Japan’s Fanuc, which has managed to lose money; Amazon and Alphabet, which have been winners; and a chip maker that was still five years away from becoming mostly an artificial intelligence player. “Chips from companies with videogame expertise, like Nvidia, make quick work of the heavy thinking,” I wrote. That one is up more than 5,000%.....
....MUCH MORE
And another theme our long-suffering (sorry about the Ozzy DNA post) long-time readers will recognize:
Cameco Stock and Other Ways to Play the Overseas Nuclear Energy Boom
They dig into the current prospects for this bit of added-value from 2022:
Uranium Miner Cameco and Brookfield Renewable Partners To Buy Nuke Maker Westinghouse (CCJ; BEP)