A Sunday column in Macleans magazine warns that "a wrecking ball" is coming for the job market in the form of new technology, while citing an Oxford study predicting that 47 per cent of all workers are at risk of obsolescence and unemployment.
A comprehensive economic revolution such as this would cause a lot of unfortunate social upheaval that would need addressing, but should also provide significant opportunities for investors – companies providing robotics should be making money hand over fist.
For exchange-traded fund investors looking to benefit from the robotics theme, there's an easy solution: the Global Robotics and Automation Index ETF.
The U.S.-traded fund generated a strong 33.38 per cent return over the 12 months and 12.6 per cent year-to-date.
The three-year average annual return of 6.6 per cent is not stellar, however, relative to the S&P 500's 10.5 per cent.
The process of uncovering individual stock ideas in the sector began with the largest investments in the Robotics and Automation Index ETF.
The accompanying table shows growth metrics and valuations for each of these companies.
After considerable deliberation, I ranked the stocks by three-year average annual sales growth.
If we are in the early stages of an economic transformation that could displace almost half of all jobs, the stocks growing market share most quickly are likely to outperform.
The necessary hiring, capacity expansion and research and development costs will keep profit growth low and the rapid rate of potential growth makes price-to-earnings ratios less relevant to future returns.
The top nine companies by three-year average annual sales growth are Japanese, beginning with Keyence Corp., a company that manufactures sensors and measuring equipment for automated processes.
Daifuku Co. Ltd., which designs complex systems for both manufacturing and transport logistics, has grown almost as quickly as Keyence and is more attractively valued by P/E ratio.
Intuitive Surgical Inc. is likely the most attractive North American stock on the list despite the high trailing P/E ratio.
The company provides surgical systems including endoscopy equipment, and also surgical supplies.
The stocks in the table are meant as a starting point for further research and do not constitute recommendations. The practical difficulties of owning Japanese stocks make the ETF particularly attractive as the best means of playing this investment theme.
On the whole, I'll admit to being disappointed in the corporate results for the robotics and automation industry at this point.
Solid profit growth is visible, but it's not on a scale rivalling the late 1990s tech-bubble earnings explosion, particularly for companies outside of Japan.
There is a lot of media noise surrounding the "robots are taking our jobs" trend, but it appears we're either at an early stage where investors can't yet benefit, or it's not happening on as wide a scale as advertised.
Want to interact with other informed Canadians and Globe journalists? Join our exclusive Globe and Mail subscribers Facebook group.