The Zacks Analyst Blog Highlights: BlackBerry, Facebook, Hewlett-Packard, Apple, Ford Motor, General Motors, Intuitive Surgical, iRobot and HollySys Automation Technologies

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Jun 23, 2014, 09:30 ET

CHICAGO, June 23, 2014 /PRNewswire/ -- Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include the BlackBerry Limited (Nasdaq:BBRY-Free Report), Facebook, Inc. (Nasdaq:FB-Free Report), Hewlett-Packard Company (NYSE:HPQ-Free Report), Apple Inc. (Nasdaq:AAPL-Free Report), Ford Motor Co. (NYSE:F-Free Report), General Motors Company (NYSE:GM-Free Report), Intuitive Surgical, Inc. (Nasdaq:ISRG-Free Report), iRobot Corporation (Nasdaq:IRBT-Free Report) and HollySys Automation Technologies, Ltd. (Nasdaq:HOLI-Free Report).

Today, Zacks is promoting its ''Buy'' stock recommendations. Get #1Stock of the Day pick for free.

Here are highlights from Friday's Analyst Blog:

3 Stocks to Benefit as Robots Replace Human Intelligence

Imagine how it would be if you are able to chat with friends on your BlackBerry Limited (Nasdaq:BBRY-Free Report) phone, surf your Facebook, Inc. (Nasdaq:FB-Free Report) account on Hewlett-Packard Company (NYSE:HPQ-Free Report) laptop or listen to some music on your Apple Inc. (Nasdaq:AAPL-Free Report) iPhone, while your driverless Ford Motor Co. (NYSE:F-Free Report) car is anchoring you to your workplace. Wondering if it is at all possible? Yes it is, thanks to the scientific genius in the form of robots.

Robots are mechanical agents that are operated either by a computer or electronic circuitry. The term was first coined by the Czech novelist Karel Capek, meaning worker or servant. Robots are found in various forms and shapes such as legged robots, wheeled robots, autonomous underwater robots and unmanned aerial vehicles. These robots undertake work that is normally hazardous for human beings or is highly complicated or menial work that humans prefer not to do. Robots are just not confined to household chores and are increasingly replacing human labor in diverse fields.

The Evolution

The first digital and programmable robot was invented by George Devol in 1954, who named it Unimate. The robot was sold to General Motors Company (NYSE:GM-Free Report) in 1961 and was used to lift pieces of hot metal from die-casting machines. Over the years, robots have gained wide acceptance and have found applications in varied fields including consumer, defense, medical, education, mining, research and entertainment. According to ABI Research, the consumer robots market is expected to quadruple in revenues between 2012 and 2017.

Robot designing have also evolved over the years, transforming from four-legged dog-like machines to two-legged humanoid forms. One can only wonder at the evolutions to come. These robots are even playing their own football cup altogether! After the FIFA World Cup in Brazil this month, these robots are awaiting their own RoboCup in July, also in Brazil. It is expected that in the next 20 years, these robots will be well equipped to compete with any world cup playing team.

Applications

Apart from the fun quotient, robotics is revolutionizing the health care industry. In the medical arena, robots help in moving inventory in medical supply facilities, monitoring patient vitals, carrying out surgeries, manufacturing drugs and dispensing the same to patients. Mention may be made of Vasteras Giraff from Giraff Technologies (Sweden), Aethon Tug from Aethon (U.S.), da Vinci from Intuitive Surgical, Inc. (Nasdaq:ISRG-Free Report) and RP-VITA from iRobot Corporation (Nasdaq:IRBT-Free Report), all of which have been continuously serving the medical field.

Robots are increasingly becoming an integral part in medical surgery as well. The first robotic surgery was held at Leipzig Heart Centre in Germany in 1998. The George Washington University Hospital has already performed more than 2,700 robotic procedures.

Companies also prefer using robots for underwater mining, which makes it less hazardous and expensive. Australia-based Nautilus Minerals has been using robots to drill for under-sea metals.

Future of Robotics

Considering the fast evolution of robots, it is likely that robots will have artificial intelligence similar or sometimes even comparatively better than humans. Per a research report from Transparency Market Research, the global robotic systems market, which was worth $5.48 billion in 2011, will reach $13.6 billion by 2018. Among this, surgical robots are expected to see the highest growth.

Apart from healthcare, robots will also find increasing usage in defense. According to the U.S. Department of Defense, by 2015, one-third of the U.S. fighting strength will comprise robots. Also, the first completely autonomous robot soldiers are expected to be operational by 2015.

Notable companies including Google Inc. are venturing into the robot industry as well. The company recently acquired eight robotics companies, including Bot & Dolly, Meka Robotics, Boston Dynamics, Holomni, SCHAFT Inc., Redwood Robotics, Industrial Perception Inc., and Autofuss. Backed by these acquisitions and a successful track record, we expect Google to spearhead a revolution in the robotics industry in the near future.

Challenges

Although the prospects seem appealing, we ought to keep in mind the spiraling costs involved in developing them. According to the UK Office of Science and Innovation's Horizon Scanning Centre,going by how the robots are evolving, they could one day demand citizen status. Moreover, it might not be financially possible for all companies to secure a robot, making them an avoidable cost for the industry. To buy a highly sophisticated robot for household work might also make them financially available to a select few. Moreover, increasing usage of robots can cause a serious unemployment issue, replacing human skill and labor. As robots gain wider acceptance and utilization, a situation may arise where several physicians, soldiers and even labors who earn their bread by simple manual work would be replaced. Such large scale unemployment will adversely affect the financial structure worldwide in the long run.

Additionally, the highly intensified nature of artificial intelligence may limit a robot's ability to respond in certain circumstances. After all, human motion and our ability to adapt to changing circumstances make human beings unique – a quality still wanting even in the most state-of-the-art robots.

3 Stocks to Benefit

Despite limitations, robotic technology in this digital age is advancing by leaps and bounds. On the verge of a cutting-edge revolution, and almost giddy from it, we hand-pick three stocks that are expected to benefit from the solid industry metrics, backed by a favorable Zacks Rank.

HollySys Automation Technologies, Ltd. (Nasdaq:HOLI-Free Report)

Beijing-based HollySysis a leading automation systems providerin the People's Republic of China. The company caters to a range of industries including electric power, process automation, factory automation, transport automation and nuclear I/C system. With a market capitalization of $1.4 billion, this Zacks Rank #1 (Strong Buy) company is currently trading at a forward P/E of 17.8x.

iRobot Corporation (IRBT)

Bedford, MAbased iRobot is one of the dominant manufacturers of robots worldwide. The company is a leading player in the domestic marketas well as in the commercial arena.iRobot has a significant presence in the home robot as well as defense and security robotsmarkets. With a market capitalization of $1.1 billion, this Zacks Rank #2 (Buy) company is currently trading at a forward P/E of 34.1x.

Intuitive Surgical (ISRG)

Based in Sunnyvale, CA, Intuitive Surgicalis a leading manufacturer of healthcare robots. This medical device company boasts of da Vinci – the most popular surgical robot. The robots at Intuitive Surgical provide surgeons with a wide range of motion and fine tissue control, which was previously possible only with open surgery. This is made possible while surgeons work simultaneously through non-invasive small ports.With a market capitalization of $15.5 billion, this Zacks Rank #3 (Hold) company is currently trading at a forward P/E of 34.9x.

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