By Lisa Chai, Senior Research Analyst & Erica Allaby, Product Marketing Manager
Logjams and bottlenecks are all the rage of late, with booming consumer demand on one hand and supply chain disruptions on the other. Whether it’s a months-delayed Tesla arrival or a backup plan for your child’s Christmas list, we’re experiencing the immediate consequences of a fractured supply chain. These issues stem from a combination of material shortages, a need for infrastructure investment, and growing consumer demand. The global supply chain is struggling to keep up.
While these slowdowns are inconvenient, they have created room for investors to potentially capitalize on the areas that may benefit – particularly logistics automation. There are companies quietly working to futurize the supply chain and prevent history from repeating itself down the line. Technology is being deployed to increase productivity in warehouse picking and packing, better delivery logistics, streamline the production process, and, perhaps most importantly, fill in labor shortage gaps.
The groundwork for change has been set. Now the question is, are you invested in this innovation? We believe that diversified exposure to supply chain disruptors is a smart way to position yourself for future growth.
WHY INVEST IN ONE WHEN YOU COULD GET THEM ALL?
Due to the nature of disruptive technologies, picking the winners and losers can be an impossible feat. From collaborative robots to computer vision to integrated inventory management, the investment opportunity is vast. For that reason, we believe an ETF approach may be the best way to capture growth.
The ROBO Global Robotics & Automation Index ETF (NYSE: ROBO) invests in global companies that are driving transformative innovations in robotics, automation, and artificial intelligence, including supply chain disruptors. While ROBO is not solely a logistics automation ETF, the subsector currently accounts for 12%1 of the portfolio and has been one of the top-performing areas since its inception in 2013.
Here’s a look at some of the fascinating technologies being developed and deployed by the logistics automation stocks in the ROBO ETF.
AT A GLANCE: INVESTMENT EXPOSURE TO LOGISTICS AUTOMATION COMPANIES
- ROBO Global Robotics and Automation Index ETF (ROBO)
- Manhattan Associates
- Zebra Technologies
SUPPLY CHAIN AUTOMATION STOCK HIGHLIGHTS
MANHATTAN ASSOCIATES (NASDAQ: MANH)
Manhattan Associates is the leader in warehouse management systems. Manhattan’s cloud-enabled solution helps integrate data from multiple inventory management systems, boost warehouse productivity, and improve utilization. MNH is 1.26% of the ROBO ETF and is up 65.95% YTD.2
Manhattan uses machine learning and big data analytics to integrate and manage warehouse automation technologies so they can work together seamlessly. During its recent earnings call on October 26, 2021, the company reported Y/Y net income is up 59.13%3, beating consensus revenue estimates over the past four quarters. Revenue was driven by strong performance in cloud and services, which now account for 70% of the company’s total revenue.
TERADYNE (NASDAQ: TER)
Teradyne is an undisputed leader in industrial automation and a top provider of collaborative robotic solutions for the manufacturing sector with its Universal Robots. Teradyne’s subsidiaries MiR and AutoGuide offer a broad range of automation solutions for the inventory management industry. TER is 1.73% of the ROBO ETF, 1.34% of the THNQ ETF, and is up 22.22% YTD.2
During its recent earnings call on October 27, 2021, the company reported Y/Y net income is up an impressive 73.18%4, beating consensus revenue estimates over the past four quarters. Revenue was driven by strong performance in semi testing and wireless testing. Despite 2020’s COVID-related shutdowns impairing the Universal Robot’s business, North America delivered the highest revenue growth from industrial automation last year and all regions expanded year on year.
ZEBRA TECHNOLOGIES (NASDAQ: ZBRA)
Zebra Technologies has been at the forefront of supply chain innovation with its RFID scanners through its investments in computer vision technologies. ZBRA is 1.55% of the ROBO ETF and is up 53.99% YTD.2
Zebra works with leading retailers and logistics providers around the world to drive and improve flexibility within their supply chain process. During its recent earnings call on November 2, 2021, the company reported that Y/Y net income is up 71.55%5, beating consensus revenue estimates over the past four quarters. Their Asset Intelligence & Tracking segment and Enterprise Visibility & Mobility segment each saw double-digit growth driven by the growing demand in mobile computing.
PTC Inc. (NASDAQ: PTC)
PTC has been investing heavily in its digital architecture for the manufacturing sector to enable collaboration and innovation to improve agility in the supply chain ecosystem. PTC is 1.13% of the ROBO ETF and is up 1.86% YTD.2
With double-digit revenue growth for the past several years, PTC is a provider of smart manufacturing software solutions. During its recent earnings call on November 3, 2021, the company reported that Y/Y net income is up a whopping 448.52%6 and beat consensus revenue estimates over the past four quarters. For 2021, all segments of PTC’s business performed well, with growth in every product line and in all geographical regions. We expect PTC’s revenue will continue to increase considerably as their IoT (internet of things) solutions take off.
1 ROBO Global, holdings and weightings are subject to change.
2 Source: ROBO Global®, S&P Capital IQ. For standardized performance data current to the most recent month end, please visit www.roboglobaletfs.com. Company performance and holding percentages are as of November 14, 2021.
3 Manhattan Associates Earnings data
4 Teradyne Earnings Data
5 Zebra Technologies Earnings Data
6 PTC Earnings Data
This information should not be relied upon by the reader as research or investment advice regarding the funds or any security in particular.