As we’ve seen play out with social media, it pays to invest in an emerging trend before it gets too “social” or overextended on Wall Street.
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Facebook (FB) is a perfect example – the social networking giant was up a healthy 45% for 2014. If an investor bet on social media and put money in Facebook at the time of its IPO, he or she would have made a whopping gain of more than 105%.
With that in mind, what will be the booming new incomer in 2015, and how can investors get at the forefront of the rising industry before the rest of Wall Street jumps in?
Randy Bateman, Huntington Funds Chief Investment Officer who oversees $2.5 billion in assets, said robotics is a fast-growing area that could be an excellent investment down the line.
“We are seeing a growing acceptance and recognition of robotics, a trend that will continue into 2015 and beyond,” he said in an interview on Countdown to the Closing Bell. “Robotics has been around in the manufacturing sector for years, but now it’s moving into the services sector as well – companies are pumping hundreds of millions of dollars in that direction, and as more technology becomes available to us, robotics will become more accepted as years go on.”
Bateman said investors looking to capitalize on the budding robotics space should consider investing in the Robo-Stox Global Robotics & Automation ETF (ROBO). The fund has nearly $105 million in assets and holds a basket of 85 stocks in the global robotics and automation industries.
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Some of the company’s well-known holdings include a 3D printing heavyweight 3D Systems (DDD), an agriculture and manufacturing giant Deere & Company (DE), a German conglomerate Siemens AG, and an aerospace and defense company Northrop Grumman (NOC), among others.
According to Bateman, another name that could benefit from the “rise of the machines” is a manufacturer of robotic medical equipment Intuitive Surgical (ISRG). Bateman said the company’s minimally invasive surgical assistant devices have helped its stock price double since 2010.
“ISRG will have a distinct advantage as robotics finds more acceptance in the healthcare field,” Bateman said. “Plus, with the aging of the baby boomers, the need for non-invasive orthopedic surgery will certainly increase.”
Bateman’s two other picks are a consumer robotics company iRobot Corporation (IRBT) and an industrial automation and information giant Rockwell Automation (ROK), which he says has the potential to become an early player in the robotics revolution.
Still, there is a potential downside to this developing trend. While you can argue the robotics boom is a sign of progress and innovation, it also has the potential to cannibalize on jobs which could in turn put pressure on the U.S. economy.
“We may have a whole generation of functionally unemployed individuals because robotics can replace many avenues of healthcare, production, transportation, and engineering,” Bateman said.