In this article, we will look at 10 best automation stocks to buy now.
Technological advancements in deep learning, computer vision, and the internet of things, are reshaping and revolutionizing industries across the globe. Autonomous solutions for mundane and repetitive tasks are proving of benefit to businesses since they allow for reallocation and optimization of resources, which we know are never enough.
Global Automation Market Size
According to a study by Fortune Business Insights, the global industrial automation market was valued at $191.89 billion in 2021 and is expected to hit $205.86 billion by the end of 2022. The market is projected to peak at $395.09 billion by 2029 at a compound annual growth rate of 9.8%. According to Statista, the global automation market revenues came to $214.3 billion in 2021, up from $186 billion in 2019, with process automation, industrial software, and factory automation making up the majority of these revenues.
Key Trends and Major Players
The primary drivers for the above-highlighted growth of the global automation industry include the increasing adoption of 5G wireless technology, the advent of industry 4.0, and skyrocketing demand for autonomous solutions across a range of industrial sectors. Autonomous solutions are being integrated into a range of industries including oil & gas, healthcare, marketing, finance, manufacturing, and mining among others. Augmented reality and virtual reality are helping businesses restructure operations to make them more cost-effective. By creating digital twins, which are built with the help of AR and VR, businesses are mitigating overheads and gauging the feasibility of their products before beginning mass production. Moreover, manufacturers are leveraging the internet of things (IoT), cloud computing, and edge computing technologies to automate industrial processes and keep up with industry 4.0, thereby driving the global automation market.
The pioneers and innovators of automation technology, who are still making unparalleled efforts to further enhance it, include Emerson Electric Co. (NYSE:EMR), Honeywell International Inc. (NYSE:HON), and Intuitive Surgical, Inc. (NASDAQ:ISRG), among others. We have come up with our own stock selection to identify more companies that are strong-footed in the space and exhibit potential for handsome returns on investment. Continue reading the 10 best automation stocks to buy now to learn more about these stocks.
Photo by Lenny Kuhne on Unsplash
Our Methodology
To compile the 10 best automation stocks to buy now, we studied market research reports and identified companies that appeared at the top of these studies.
We also gave weight to the analyst and investor sentiment for each stock mentioned on our list. The hedge fund sentiment was determined using Insider Monkey’s database which tracks roughly 900 elite hedge funds as of the fourth quarter of 2021.
10 Best Automation Stocks To Buy Now
10. iRobot Corporation (NASDAQ:IRBT)
Number of Hedge Fund Holders: 15
iRobot Corporation (NASDAQ:IRBT) designs, builds, and sells robots and home innovation (smart home) products in the United States, Europe, the Middle East, Africa, Japan, and internationally. iRobot Corporation (NASDAQ:IRBT) is one of the 10 best automation stocks to buy now and offers a suite of autonomous home cleaning devices such as smart vacuum cleaners and smart floor moppers among others.
This February, the company reported quarterly revenues of $455.45 million for the fiscal fourth quarter of 2021. Moreover, on March 24, 2022, Northland analyst Michael Latimore upgraded iRobot Corporation (NASDAQ:IRBT) to Outperform from Market Perform with an $85 price target on the shares.
Hedge funds and analysts are equally bullish on iRobot Corporation (NASDAQ:IRBT) and according to Insider Monkey’s data, by the end of the fourth quarter of 2021, 15 hedge funds held long positions in iRobot Corporation (NASDAQ:IRBT). The total value of their stakes amounted to $25.06 million.
As of December 31, 2021, D E Shaw is the most prominent shareholder in iRobot Corporation (NASDAQ:IRBT) with stakes of more than $5.55 million, up 181% from the fund’s Q3 2021 stakes.
Like Emerson Electric Co. (NYSE:EMR), Honeywell International Inc. (NYSE:HON), and Intuitive Surgical, Inc. (NASDAQ:ISRG), iRobot Corporation (NASDAQ:IRBT) is an attractive stock option for investors looking to take up stakes in the automation industry.
9. ABB Ltd (NYSE:ABB)
Number of Hedge Fund Holders: 16
ABB Ltd (NYSE:ABB) is involved in the manufacture and sales of electrification, automation, robotics, and motion products in Switzerland and internationally. Not only is the company reporting robust earnings, but is also steadily increasing its dividends. As of May 3, 2022, ABB Ltd (NYSE:ABB) has a forward dividend yield of 2.97% and has consistently hiked its dividends for the past 3 years, which makes it a compelling stock option for investors looking to invest in the automation industry.
ABB Ltd (NYSE:ABB) recently released earnings for the fiscal first quarter of 2022, this April, in which the company beat EPS estimates by $0.05. According to the company’s report, ABB Ltd (NYSE:ABB) registered an EPS of $0.31 and generated revenues of over $6.97 billion for the quarter.
On April 22, UBS analyst Guillermo Peigneux-Lojo raised his price target on ABB Ltd (NYSE:ABB) to CHF 37 from CHF 35 and maintained a Buy rating on the shares.
Hedge funds are upping their stakes in ABB Ltd (NYSE:ABB). Insider Monkey identified 16 hedge funds long ABB Ltd (NYSE:ABB) at the close of Q4 2021. The total value of these funds’ stakes came to $892.95 million, up from $721.68 million with 19 positions in the third quarter of 2021.
Ken Fisher’s Fisher Asset Management is the dominating stakeholder in ABB Ltd (NYSE:ABB) as of the end of December 2021, owning over 18.2 million shares of the stock. This comes to a stake of $695.38 million, which covers 0.38% of Fisher Asset Management’s Q4 2021 investment portfolio.
8. Omnicell, Inc. (NASDAQ:OMCL)
Number of Hedge Fund Holders: 22
Omnicell, Inc. (NASDAQ:OMCL) is revolutionizing the healthcare industry by providing autonomous solutions for medication management and adherence tools for healthcare systems and pharmacies in the United States and internationally. On April 28, the company announced market-beating earnings for the fiscal first quarter of 2022. According to Omnicell, Inc. (NASDAQ:OMCL), the company’s revenues grew by 26.60% year over year and came to $318.83 million, beating revenue estimates by $4.85 million. Moreover, Omnicell, Inc. (NASDAQ:OMCL) reported earnings per share of $0.83 and beat expert estimates by $0.15.
This January, Omnicell, Inc. (NASDAQ:OMCL) announced its acquisition of MarkeTouch Media, a pharma-tech company, for an all-cash transaction of $82 million. With this acquisition, Omnicell, Inc. (NASDAQ:OMCL) plans to expand the footprint of its EnlivenHealthTM division across the retail pharmacy sector, while also exploring potential growth opportunities in new markets such as specialty pharmacy and pharmacy benefits management.
Omnicell, Inc. (NASDAQ:OMCL) was spotted on 22 hedge fund portfolios at the end of the fourth quarter of 2021, which held stakes worth $141.85 million in the company. This is compared to 20 positions in the previous quarter with stakes worth $110.09 million. The hedge fund sentiment for the stock is positive. As of December 31, 2021, Fisher Asset Management is the dominating shareholder in Omnicell, Inc. (NASDAQ:OMCL) with stakes worth $43.99 million in the company.
Omnicell, Inc. (NASDAQ:OMCL) is gaining recognition in the automation space for its unique approach targeted at the healthcare industry. Other prominent names in the automation industry include Emerson Electric Co. (NYSE:EMR), Honeywell International Inc. (NYSE:HON), and Intuitive Surgical, Inc. (NASDAQ:ISRG).
7. Rockwell Automation Inc. (NYSE:ROK)
Number of Hedge Fund Holders: 31
Rockwell Automation Inc. (NYSE:ROK) provides industrial automation and digital transformation solutions in the United States and internationally. The company operates through three business segments: Intelligent Devices, Software & Control, and Lifecycle Services. On April 14, Deutsche Bank analyst Nicole DeBlase lowered her price target on Rockwell Automation Inc. (NYSE:ROK) to $292 from $318 and maintained a Hold rating on the shares. DeBlase expects 11 beats and 9 misses this earnings season as companies in the industrials and equipment segment are putting forth conservative guidance.
This January, Rockwell Automation Inc. (NYSE:ROK) reported earnings for the fiscal first quarter of 2022 in which it outperformed market consensus. The company reported earnings per share of $2.14, beating EPS estimates by $0.23. The company’s quarterly revenues came to $1.86 billion, up 18.65% year over year, and beat estimates by over $35 million.
On April 6, 2022, Rockwell Automation Inc. (NYSE:ROK) announced that its board of directors have declared a quarterly cash dividend of $1.12 per share, payable on June 10 to investors of record at the close of business on May 16. Strong earnings and a handsome dividend yield are what make Rockwell Automation Inc. (NYSE:ROK) one of the best automation stocks to buy now.
Insider Monkey identified 31 hedge funds that held stakes in Rockwell Automation Inc. (NYSE:ROK) worth $700.18 million. This is compared to 29 hedge funds in the preceding quarter with stakes of $519.69 million. As of the end of last December, Impax Asset Management owns more than 690,000 shares of Rockwell Automation Inc. (NYSE:ROK) which equates to stakes of $243.02 million, making it the top shareholder in the company.
6. Azenta Inc. (NASDAQ:AZTA)
Number of Hedge Fund Holders: 33
Azenta Inc. (NASDAQ:AZTA) provides manufacturing automation solutions for the semiconductor industry, and life science services and solutions for the life sciences markets worldwide. On February 8, 2022, Azenta Inc. (NASDAQ:AZTA) announced market-beating earnings for the fiscal first quarter of 2022. The company generated revenues of $139.65 million and outperformed market consensus by $4.23 million. Moreover, the company reported earnings per share of $0.58, beating estimates by $0.69.
This March, B. Riley analyst Yuan Zhi resumed coverage of Azenta Inc. (NASDAQ:AZTA) with a Buy rating and a $106 price target. The analyst noted that Azenta Inc. (NASDAQ:AZTA) has built industry-leading capabilities of genomics, cryostorage, automation, and informatics to optimize operations for drug discovery and delivery. Azenta Inc. (NASDAQ:AZTA) ranks at number six among the best automation stocks to buy now.
At the end of the fourth quarter of 2021 33 hedge funds were long Azenta Inc. (NASDAQ:AZTA). The total value of their stakes was worth $522.37 million. This is compared to 29 positions in the previous quarter with stakes worth $577.56 million.
Ken Fisher’s Fisher Asset Management is the leading stakeholder in Azenta Inc. (NASDAQ:AZTA), having stakes worth $91.78 million as of December 31, 2021. The investment covers 0.05% of Ken Fisher’s investment portfolio.
Artisan Partners mentioned Azenta Inc. (NASDAQ:AZTA) in its fourth-quarter 2021 investor letter. Here is what the firm had to say:
“We started new investment campaign in Azenta Life Sciences. Azenta provides a broad range of products and services focused on biological sample management. The company is well positioned to benefit from the rapid rise in blood, tissue and cell samples being collected, analyzed and stored by pharmaceutical, diagnostic, medical centers and academic researchers. It provides storage systems and consumables for customers storing their own samples and also offers outsourced sample storage and analysis (which given Azenta’s scale and capabilities, can be a more efficient solution). In addition, we see an important internal change underway at the company, as it’s in the process of divesting its large legacy semiconductor business to focus entirely on life sciences. This divestiture is expected to yield $2bn in proceeds, which Azenta can use to supplement its organic growth via complementary acquisitions.”
5. Teradyne, Inc. (NYSE:TER)
Number of Hedge Fund Holders: 40
Teradyne, Inc. (NYSE:TER) designs, develops, manufactures, sells, and supports automatic test equipment worldwide. The company operates through four business segments: Semiconductor Test, System Test, Industrial Automation, and Wireless Test segments. This April, Teradyne, Inc. (NYSE:TER) announced that it has successfully completed a shipment of the 7,000th unit of its J750 semiconductor test platform to Nations Technologies. Nation Technologies is a prominent name in the Chinese security IC and microcontroller unit (MCU) industry.
On April 26, 2022, Teradyne, Inc. (NYSE:TER) released its earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue estimates. The company reported earnings per share of $0.98, beating EPS estimates by $0.09. The company generated quarterly revenues of $755.37 million, beating revenue estimates by roughly $13 million. As of May 3, 2022, the stock has a forward price-to-earnings ratio of 20.30, making it a value stock pick for investors looking to initiate positions in the automation industry.
Teradyne, Inc. (NYSE:TER) was spotted on 40 investment portfolios at the end of the fourth quarter of 2021. The total stakes of these funds were valued at $1.54 billion, up from $1.36 billion in the previous quarter with 42 positions. The hedge fund sentiment for the stock is positive.
Alkeon Capital Management is the most prominent investor in Teradyne, Inc. (NYSE:TER) as of December 31, 2021. The fund owns more than 3.7 million shares of stock which amount to stakes of $611.9 million, and cover 1.13% of the fund’s 13F portfolio.
4. Ambarella, Inc. (NASDAQ:AMBA)
Number of Hedge Fund Holders: 40
Ambarella, Inc. (NASDAQ:AMBA) develops semiconductor solutions for video processing that enable high-definition and ultra HD compression, image processing, and deep neural network processing. This April, Ambarella, Inc. (NASDAQ:AMBA) announced a strategic collaboration with Lumentum Holdings (NASDAQ:LITE) to leverage artificial intelligence and privacy applications to develop “smart” building applications.
This February, Ambarella, Inc. (NASDAQ:AMBA) released its earnings for the fiscal fourth quarter of 2022 in which it beat both EPS and revenue estimates. The company registered an EPS of $0.45 and beat estimates by $0.03. Moreover, the company’s quarterly revenues came to $90.23 million, up 45.20% year over year from $62.14 million.
On April 20, 2022, Deutsche Bank analyst Ross Seymore lowered his price target on Ambarella, Inc. (NASDAQ:AMBA) to $115 from $140 but maintained a Hold rating on the shares.
By the end of the fourth quarter of 2021, 40 hedge funds were long Ambarella, Inc. (NASDAQ:AMBA) with stakes worth $831.74 million in the company. This is compared to 37 positions in the prior quarter with stakes of $582.74 million in the company. The hedge fund sentiment for Ambarella, Inc. (NASDAQ:AMBA) is positive.
As of the end of last December, Driehaus Capital is the leading stakeholder in Ambarella, Inc. (NASDAQ:AMBA) having stakes worth roughly $119.2 million, which represent 1.21% of Driehaus Capital’s Q4 2021 investment portfolio.
3. Emerson Electric Co. (NYSE:EMR)
Number of Hedge Fund Holders: 43
Emerson Electric Co. (NYSE:EMR) designs and manufactures technology and engineering products for industrial, commercial, and consumer markets worldwide. The company operates through two segments: Automation Solutions and Commercial & Residential Solutions. As of May 3, 2022, the stock has a PE ratio of 18.20 and a forward dividend yield of 2.28%, making Emerson Electric Co. (NYSE:EMR) a compelling value stock pick that offers dividends and placing it among the top 3 automation stocks to buy now.
On February 2, 2022, Emerson Electric Co. (NYSE:EMR) announced earnings for the fiscal first quarter of 2022 in which it beat both EPS estimates by $0.04. The company reported earnings per share of $1.05 and generated quarterly revenues valued at $4.47 billion, up 7.50% year over year from $4.16 billion. Shortly after the company’s earnings release, Citi analyst Andrew Kaplowitz raised his price target on Emerson Electric Co. (NYSE:EMR) to $123 from $120 and reiterated a Buy rating on the shares. Kaplowitz contended that the company’s “strong” earnings results and a raised fiscal 2022 outlook strengthen Emerson Electric Co.’s (NYSE:EMR) position in the market and set the headway for sustained earnings growth in a recovering global economic environment.
Emerson Electric Co. (NYSE:EMR) is gaining popularity among investor circles. Insider Monkey found 43 hedge funds that held long positions in Emerson Electric Co. (NYSE:EMR) at the end of the fourth quarter of 2021. The total value of their stakes was approximately equal to $1.47 billion, up from $671 million in the preceding quarter with 41 positions.
As of the end of Q4 2021, Two Sigma Advisors is the dominating shareholder in Emerson Electric Co. (NYSE:EMR), owning more than 2.6 million shares of stock which equate to a stake of approximately $250 million.
2. Honeywell International Inc. (NYSE:HON)
Number of Hedge Fund Holders: 51
Honeywell International Inc. (NYSE:HON) operates as a diversified technology and manufacturing company worldwide. The company offers a suite of automation products and services for a range of industries, such as detection systems, warehouse automation, and sensing devices among others. As of May 3, the stock has a forward dividend yield of 1.99% and a forward price-to-earnings ratio of 22.71, which makes it an attractive stock option in the automation industry.
Honeywell International Inc. (NYSE:HON) recently released its earnings report for the fiscal first quarter of 2022 on April 29. The company’s quarterly revenues amounted to $8.38 billion and outperformed market estimates by $86.41 million. Moreover, Honeywell International Inc. (NYSE:HON) reported earnings per share of $1.91 and beat expert EPS estimates by $0.05.
On May 2, 2022, Wells Fargo analyst Joseph O’Dea raised his price target on Honeywell International Inc. (NYSE:HON) to $203 from $196 and maintained an Equal Weight rating on the shares, following the company’s earnings release for FQ1 2022.
Hedge funds are upping their stakes in Honeywell International Inc. (NYSE:HON). Insider Monkey identified 51 hedge funds long Honeywell International Inc. (NYSE:HON) with stakes worth $1.89 billion. This is compared to 45 positions in the previous quarter with stakes worth $927.73 million.
As of December 31, 2021, D E Shaw is the top shareholder in Honeywell International Inc. (NYSE:HON), with stakes worth $342.43 million in the company. The investment covers 0.28% of D E Shaw’s Q4 2021 hedge fund portfolio.
Distillate Capital, an investment management firm, published its third-quarter 2021 investor letter in which it mentioned Honeywell International Inc. (NYSE:HON). Here is what the firm said:
“The largest exited positions were Oracle, which outperformed significantly, and Texas Instruments and Honeywell, which were roughly flat versus the market in the quarter but were edged out for inclusion by other stocks that became even more attractively valued.”
1. Intuitive Surgical, Inc. (NASDAQ:ISRG)
Number of Hedge Fund Holders: 63
Intuitive Surgical, Inc. (NASDAQ:ISRG) is leading the field of healthcare automation for over 12 years now. The company develops, manufactures, and markets robotic products designed to improve clinical outcomes of patients through minimally invasive surgery, with its flagship product being the da Vinci Surgical System. The company is part of both the NASDAQ-100 and S&P 500 and is placed first on our compilation of the 10 best automation stocks to buy now.
This April, Intuitive Surgical, Inc. (NASDAQ:ISRG) reported earnings for the fiscal first quarter of 2022 in which it beat both EPS and revenue estimates by handsome margins. The company reported earnings per share of $1.13, beating EPS estimates by $0.05. Moreover, the company’s quarterly revenues grew by 15.14% year over year and amounted to $1.49 billion, outperforming market consensus by $62.12 million.
On April 22, Piper Sandler analyst Adam Maeder raised his price target on Intuitive Surgical, Inc. (NASDAQ:ISRG) to $316 from $310 and maintained an Overweight rating on the shares. The analyst noted the company’s quarterly revenues, procedure growth, and adjusted earnings all outperformed market estimates and were “solid”, even amidst a challenging procedure landscape in the quarter. Moreover, Maeder contended that Intuitive Surgical, Inc. (NASDAQ:ISRG) raised its fiscal year procedure growth guidance to 12%-16%, despite headwinds in China due to omicron, and sees the company well-positioned to benefit from sustainable financial growth.
Intuitive Surgical, Inc. (NASDAQ:ISRG) is experiencing bullish trading volumes. At the close of Q4 2021, 63 hedge funds were long Intuitive Surgical, Inc. (NASDAQ:ISRG) with stakes worth $4.20 billion. This is compared to 61 hedge funds in the third quarter of 2021 with stakes of $3.53 billion. The hedge fund sentiment for Intuitive Surgical, Inc. (NASDAQ:ISRG) is positive.
Fisher Asset Management is the most bullish on Intuitive Surgical, Inc. (NASDAQ:ISRG) as of December 31, 2021. The Ken Fisher-led hedge fund owns more than 4.3 million shares of the company, which come to stakes of $1.54 billion, up 216% from the fund’s Q3 2021 stakes in the company.
ClearBridge Investments mentioned Intuitive Surgical, Inc. (NASDAQ:ISRG) in its fourth-quarter 2021 investor letter, here is what the firm said:
“Intuitive Surgical, a maker of robotic instruments for soft tissue surgery, was another new health care addition. The market for soft tissue procedures is enormous, including those performed with the aid of the company’s DaVinci machines, whose three-dimensional imaging capabilities require smaller incisions, resulting in less nerve damage and bleeding and shorter patient stays. DaVinci machines are a $1 million-plus investment by hospitals that can be run continuously through the day, allowing for a greater number of procedures with less physician fatigue. Surgeons are trained on the device from medical school and residency on up. Combining the related training and supply chains, these purchases are very sticky. We see the opportunity for Intuitive Surgical to benefit from more indications for the devices, procedure growth, and greater sales in hospitals and surgical centers.”
You can also take a look at 11 Best Robotics Stocks To Buy For 2022 and 10 Best Machine Learning Stocks to Invest In.
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Disclose. None. 10 Best Automation Stocks To Buy Now is originally published on Insider Monkey.
