The Robo-Stox Global Robotics & Automation Index ETF (ROBO) is nearly 10 months old and in those 10 months, there has been one constant applicable to this ETF: Questions regarding the legitimacy of an with such an extreme, niche focus.
Indeed, ROBO is a niche play, but that should not obfuscate the fact that the ETF is really a play on two familiar sectors. Industrial and technology names account for almost 84% of ROBO’s weight.
At the industry level, ROBO remains one of the most credible options for investors looking to gain exposure to 3D printing stocks via the ETF wrapper. Like so many momentum stocks, 3D printers were savagely repudiated earlier this year. But like other momentum fare, 3D printers have recently roared back. [An ETF With 3D Printing Exposure]
3D Systems (DDD) “cleared its 50-day moving average, broke its declining 2014 trendline to the upside and even completed an arguable double-bottom pattern. Money also began to flow back into the stock, according to a rising on-balance volume indicator, and suddenly it is back in vogue. There is no significant chart resistance until the $80 area,” reports Michael Kahn for Barron’s.
3D Systems, which accounts for 2.1% of ROBO’s weight, closed just over $62, indicating significant upside potential if the stock really can get back to $80. Short covering is also boosting 3D printers and, in turn, ROBO.
As of June 13, about 34% of 3D Systems shares were sold short while 15% of Stratasys (SSYS) was sold short, reports Brian Deagon for Investor’s Business Daily. ExOne (XONE), another one of the marquee 3D stocks, has a short float of 32%, according to IBD.
ExOne and Stratasys combine for about 2% of ROBO’s weight. The three aforementioned stocks are up an average of 31.3% since the start of June, explaining why ROBO is up nearly 7% over that time.
The bottom line is ROBO is something of a unique concept among ETFs. Perhaps it can even be called “odd” depending upon the person doing the describing. And no, ROBO probably is not suitable for every investor’s portfolio, but the ETF remains a decent way of getting some leverage to the 3D printing trade.
Robo-Stox Global Robotics & Automation Index ETF