ROBO Global Q3 Review
During the quarter, the ROBO Global Robotics & Automation Index celebrated its three-year anniversary. Since launching the Index, we have witnessed expanding growth rates, continued innovation with decreasing costs, record VC and corporate robotics spending, and increasing investor interest. Through the first nine months of this year, the ROBO Index is up +17% compared to S&P 500 and ACWI at +6% and +7.3% respectively. The ROBO Index is up 27% for the last 12 months.
The Index continues to be well positioned to capture the forecasted growth across the many different Index subsectors. The ROBO Index maintains a comparable valuation to multiple broad market indices, but reflects estimated 3-year earnings growth rates double those same benchmarks.
Worth Noting: During 3Q 2016, ROBO Index returns were evenly distributed across our 13 subsectors, which is designed to capture the entire universe of robotics & automation for investors. In fact, over 90% of the ROBO Index subsectors and nearly 85% of all Index companies generated a positive contribution to performance. The leading subsectors were 3D Printing and Computing.
After two years of a challenging environment, the 3D Printing subsector has generated a total return of 38% QTD and 75% YTD. Another 3D Printing company was added to the Index this quarter, ExOne Corp., while GE offered to acquire two of the ROBO Index companies in September (details below.)
The Computing subsector is comprised of companies providing the technology that facilitates the transition from processing information to producing action, i.e. the "robotic brain." Companies in the Computing subsector were up +24% QTD and the eight companies account for 7.6% of the ROBO Index.
INSIDE THE INDEX
Mergers & Acquisitions: General Electric simultaneously offered to acquire two 3D printing companies in the ROBO index for a combined total of $1.4 billion - Arcam and SLM Solutions. GE plans to build their 3D printing business to $1 billion by 2020 and decrease costs by $3-5 billion over the next ten years.
GE paid a handsome premium of over 30% and 50% for SLM Solutions and Arcam, respectively. Not surprisingly, GE's move drove up many stock prices within the 3D printing space including the ROBO holdings of 3D Systems and Stratasys, both up over 5% on the news.
Chinese consumer manufacturer Midea spent over $4 billion to acquire 94% of German robot maker & ROBO index company KUKA. Midea's recent investments follow a series of government-led initiatives labeled China Manufacturing 2025, which is aimed at transforming China's manufacturing industry from low-end mass production into a more profitable model harnessing new technologies like robots, AI, and IoT.
This recent uptick in M&A deals within the ROBO Global Index should send a clear message to investors that the increasing investments indicate recognition, acceptance, and growth acceleration in the marketplace.
QUARTERLY REBALANCE UPDATE
The ROBO index now holds 82 companies across the Robotics & Automation Industry. To date, ROBO Global has established six licensing agreements with institutional investors and ETF providers in the US, Europe, and Asia.
- Hexagon, ROBO Classification: Sensing
- Raven Industries, ROBO Classification: Agriculture
- ExOne Corp, ROBO Classification: 3D Printing
- Autodesk, ROBO Classification: Processing
See more information on the index here:
ROBO EU UCITS Fact Sheet
We're pleased to announce the appointment of Manish Kothari, Ph.D., President of SRI Ventures & VP of SRI International to the ROBO Global Strategic Advisory Board. Kothari's leadership in the creation of high-value venture opportunities and as program director in SRI's robotics program will serve as valuable insight.
Chris Buck joins the ROBO Global team from San Francisco as the new Head of Capital Markets & Sales, bringing over 25 years of experience in the field.
Richard Lightbound, ROBO EU CEO, spoke at Future World in London on investing in robotics.
ROBO Global co-founder Frank Tobe, Editor & Publisher of The Robot Report spoke at the RoboBusiness conference in San Jose, CA on robotics in the agriculture industry.
Interested in licensing the index? Email us: email@example.com
Please note data and company references are sourced from both ROBO USA index and ROBO EU UCITS index.
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