Small cap robotics stocks Adept Technology Inc (NASDAQ: ADEP) and iRobot Corporation (NASDAQ: IRBT) have both been putting in a great performance for investors, but which is the better robotics stock for investors? I should mention that we have had Adept Technology in our SmallCap Network Elite Opportunity (SCN EO) portfolio since mid-September and we are already sitting on a 71.38% return so far plus we have just added iRobot Corporation to our portfolio because we see the robotics subsector improving as companies aim to reduce overhead and improve efficiencies through machine to machine (M2M) automation.
What Are Adept Technology and iRobot Corporation?Small cap iRobot Corporation was founded in 1990 by Massachusetts Institute of Technology roboticists with the vision to make practical robots a reality by developing and manufacturing robotic solutions to address real-world problems. iRobot Corporation says its home robots are revolutionizing the way people clean with more than 8 million home robots having been sold worldwide – including the award-winning iRobot Roomba floor vacuuming robot. In addition, more than 5,000 iRobot Corporation robots have been delivered to military and civil defense forces worldwide to perform dangerous search, reconnaissance and bomb-disposal missions while the state-of-the-art Ava mobile robotics platform includes the Ava™ 500 video collaboration robot which delivers autonomous telepresence to the enterprise market and the FDA-approved RP-VITA telemedicine robot which expands the reach of medical care by connecting physicians with patients from anywhere in the world.
Meanwhile, small cap Adept Technology was founded in 1983 and calls itself the largest US based manufacturer of industrial robots as it provides specialized, cost-effective robotics systems and services to high-growth markets such as Packaged Goods, Life Sciences, Disk Drive/Electronics and Semiconductor/Solar plus traditional industrial markets such as machine tool automation and automotive components. More than 25,000 non-captive Adept Technology robots along with more than 30,000 controlled robots are already installed worldwide.
What You Need to Know or be Warned About With ADEP and IRBTHere is what you need to know about both robotics stocks:
Adept Technology. Last Thursday, Adept Technology reported a 19.4% fiscal first quarter 2014 revenue increase to $13.6 million, gross margin of 46.1% (which expanded nearly 5%) and adjusted EBITDA of $0.5 million verses a 2013 first quarter adjusted EBITDA loss of $2.4 million. The CEO noted:
"The business is stabilizing and we are continuing to focus on improving our bottom line while growing the top line. We are pleased with the progress in the first quarter and have made substantial progress in restructuring and repositioning the business, but recognize we still have a lot of work to do."
Meaning the company and the stock has room to grow and improve. In the earnings call (available on Seeking Alpha here), Adept Technology's CEO commented that the results from the recent MOTEK show in Stuttgart where the company showcased fixed and mobile products showed that total leads were up for this show year-over-year and that over 60% of leads for that show were for mobile products in target applications. He stated this further validated their belief that this market is in fact shifting from solely fixed applications and gradually moving into the mobile and even collaborative robot applications plus he added:
"Our businesses no longer just about spares our services or training. It's about finding ways to lower our customers' cost of ownership through advanced service programs and finding proactive solutions for our install base moving forward. This growth is very encouraging but over the longer term, I will expect our service revenue to grow slightly higher than the business as a whole."
iRobot Corporation. Yesterday, iRobot Corporation announced it was bringing the next-generation Roomba cleaning system that revolutionizes robotic vacuum cleaning to market with the iRobot Roomba 880 vacuum cleaning robot:
iRobot Corporation has been working on the Roomba 880 for more than four years and has submitted 12 patents for the new cleaning system which costs $699 and is available initially only online in North America while older models like the Roomba 600 and 700 series robots start at $349. The Roomba 880 is considered to be the biggest leap forward in robotic cleaning since the original Roomba debuted back in 2002. However and in mid-October, iRobot Corporation reported so-so results with revenue coming in at $124.5 million verses $126.3 million along with net income of $7.8 million verses $15.2 million thanks to higher expenses. With that said, Home Robot revenue rose 16% thanks to strong growth in Japan while the Defense & Security business was impacted by the government shutdown.
Share Performance: Adept Technology vs. iRobot CorporationTop Gold Companies To Own In Right Now
On Tuesday, small cap Adept Technology fell 0.10% to $10.18 (ADEP has a 52 week trading range of $2.38 to $11.50 a share) for a market cap of $110.62 million plus the stock is up 291.5% since the start of the year and up 172.9% over the past five years while iRobot Corporation fell 2.94% to $32.75 (IRBT has a 52 week trading range of $16.25 to $41.12 a share) for a market cap of $937.90 million plus the stock is up 74.8% since the start of the year and up 207.2% over the past five years. Here is a look at the long term charts for both Adept Technology and iRobot Corporation:
As you can see from the above chart, Adept Technology has tended to underperform iRobot Corporation over the long-term. However and if you look at the most recent technical charts for both small cap robotics stocks, Adept Technology's chart is looking more bullish:
The Bottom Line. There are plenty of reasons to stay bullish about small cap robotics stocks Adept Technology and iRobot Corporation as it looks like either might make a good addition to your portfolio.
SmallCap Network Elite Opportunity (SCN EO) has an open position in ADEP and IRBT. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.
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