Stocks To Buy

You’ve Been Warned! 3 Robotics Stocks to Buy Now or Regret Forever.

Leverage automation into portfolio gains with these three leading robotics stocks

Source: Phonlamai Photo / Shutterstock.com

Right now, growth investors are focused primarily on opportunities in the semiconductors and artificial intelligence stocks space. That’s understandable, given how fast technology is advancing in those areas right now.

But investors shouldn’t lose sight of other technological developments as well. For example, robotics stocks should enjoy considerable growth in the years to come. Particularly since the pandemic, labor costs have spiraled higher which has motivated companies to invest more heavily in labor-saving automation and robotics systems.

A recent research report found that the U.S. robotics market is already a $7 billion a year field, and this is expected to grow to more than $10 billion annually over the next decade. As the overall market continues to expand, these three robotics stocks stand to benefit.

Columbus McKinnon (CMCO)

An image of warehouse automation

Columbus McKinnon (NASDAQ:CMCO) is one of the best ways to access the automation and robotics stocks space today.

That’s because the company is a one-stop shop offering a wide array of equipment and solutions needed to automate factories and warehouses. There is a massive capital cycle in the industry now. That’s thanks to Amazon (NASDAQ:AMZN), which invested heavily in warehouse robotics. Those investments gave Amazon a huge lead in e-commerce fulfillment, and now everyone else is trying to catch up.

This macroeconomic framework puts Columbus McKinnon in a strong position. It sells the physical gear necessary for building 21st century warehouses, factories and logistics — the conveyor belts, hoists, rigging tools and motion control systems needed to make the automation magic happen.

Given the surge in labor costs since the pandemic, companies are willing to spend heavily on labor-saving solutions. It’s not just warehouses, either. With the reshoring phenomenon and renewed interest in North American manufacturing, a new wave of smart factories will utilize Columbus McKinnon’s automation solutions for industrial purposes as well.

CMCO stock has pulled back 20% over the past month as traders price in a potential recession on the horizon. These jitters have caused CMCO stock to fall to an attractive entry point at less than 12 times forward earnings.

Cognex (CGNX)

Cognex (NASDAQ:CGNX) is an industrial company which offers investors multiple opportunities to profit from the rise of automation and robotics.

It is heavily involved in the smart factories and warehouses space. Cognex is also the leader in fixed-mount barcode readers which help shoppers to buy items at a brick-and-mortar store without needing a cashier to ring the purchases up.

Cognex delivers both organic growth and an ambitious mergers and acquisitions strategy. Last year, it bought Japanese machine vision optics firm Moritex for about $275 million. The largest deal in Cognex’s history, it built on top of the firm’s prior purchase of Sirius Advanced Cybernetics.

Cognex earns a large chunk of its revenues from the smart vision for vehicles market, and as such, the company’s revenues declined in 2023 as auto sales dropped. But Cognex is set to return to robust top- and bottom-line growth in 2024. And the company’s pioneering AI-embedded 3D Industrial Vision system should unlock further upside in the months to come.

Procept BioRobotics (PRCT)

Robotics and automation tools have arguably made the biggest mark on the industrial sector. But it’s hardly the only attractive opportunity — healthcare is another great market for the robotics space.

To give one example, Procept BioRobotics (NASDAQ:PRCT) is a health care equipment company focused on robotic surgical systems. Computer-aided surgical tools should help improve efficiency and precision for certain types of procedures while also facilitating remote medicine in situations where an on-site surgeon isn’t available.

For Procept specifically, it manufactures and services the AquaBeam Robotic System. The AquaBeam is an image-guided, surgical robotic system for use in minimally invasive urologic surgery that primarily treats benign prostatic hyperplasia.

Procept gained Food and Drug Administration clearance to launch the AquaBeam in 2017. Business has scaled up quickly, with revenues soaring from $6 million in 2019 to $136 million last year. Analysts expect that to jump to $214 million this year, which would add up to a sizzling 57% year-over-year growth rate.

The company isn’t profitable yet. But given its huge growth and massive runway, it should be only a matter of time until the company starts generating large cash flows or it is acquired by a larger medical devices company at a sizable premium.

On the date of publication, Ian Bezek held a long position in CMCO stock. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. He also worked as a Junior Analyst for Kerrisdale Capital, a $300 million New York City-based hedge fund. You can reach him on Twitter at @irbezek.

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