Sunday, March 23, 2014

Buy These Shares… Before Google Does

Editor's Note: We're giving you special access to Bill's Private Briefing because he and Michael have spotted a rare opportunity in the robotics and M&A niche. Readers have the chance to get into this company before Google does - and sends the price doubling. Here's Bill...

As I've mentioned many times in Private Briefing, resident technology expert Michael Robinson and I talk by telephone at least once every day - and often two or three times.

On more than one occasion, in fact, Michael has joked that we could save a lot of time if we were capable of the "Vulcan Mind Meld" technique that Mr. Spock regularly used in the classic sci-fi TV show Star Trek.

But because we do talk so frequently, I have to confess that Michael surprised me in late December: When I was interviewing our gurus to get their top stock picks for the New Year, Michael recommended a stock that we hadn't previously talked about.

But I'm really glad he did...

Obamacare Drives This Niche

Michael's pick for 2014 was Adept Technology Inc. (Nasdaq: ADEP), a play on the red-hot robotics sector whose stock he predicted could zoom 50% to 100% because of improving finances and the potential for a takeover.

"Adept is improving [its] operations and could be a great acquisition for a larger firm as companies continue to automate rather than hire more full-time workers, a hiring philosophy they are maintaining in order to dodge the effects of Obamacare," Michael told me at the time of his recommendation. "And while I would characterize this small-cap stock as one for the higher-risk portion of your subscribers' portfolios, I do believe the trends are in the company's favor, meaning this is a play that could gain 50%, or even double from where it's trading right now."

In the interest of candor, I will say that the stock has been a laggard to this point. But Monday, Adept shares jumped more than 12% - a move that Michael believes is a sign of things to come.

"Part of what I think you're seeing here is that the catalysts we've been talking about are finally manifesting themselves in a tangible enough manner to induce investors to act," said Michael, the editor of our Radical Technology Profits advisory service here at Money Map Press. "On the financial side, the company's management team has been specific in forecasting a swing from a string of losses to solid profitability... during this year. And we've seen all the robotics-related deals taking place."

He's right on both points.

Here at Private Briefing,we've liked the robotics sector for some time.

We have an 85% gain in iRobot Inc. (Nasdaq: IRBT), which we recommended as an intellectual property play back in May 2012.

And last June, we followed up by recommending Yaskawa Electrical Corp. (OTC: YASKY), Japan's No. 2 maker of robotic technology. That stock is up 17%... so far.

This Pick Could Be Next on Google's List

Search giant Google Inc. (Nasdaq: GOOG) has been snapping up robotics firms at a stunning pace - including six in a six-day stretch last year. Its shopping list has included:

Boston Dynamics DeepMind Technologies Ltd. Bot & Dolly Holomini Meka Robotics Redwood Robotics Industrial Perception Inc. Schaft Inc.

At a technology conference in Santa Monica last week, Google Chairman Eric Schmidt said his company is experimenting with automation in ways that will "replace a lot of the repetitive behavior in our lives."

"We're experimenting with what automation will lead to," Schmidt said at the tech-networking gathering known as Oasis: The Montgomery Summit. "Robots will become omnipresent in our lives in a good way."

There's method in this M&A madness: Google wants to branch out beyond its core search business - to find new revenue and customer-traffic catalysts. Video and mobile will help, but those are the "next-step" technologies. So Google is looking at long-term growth drivers such as driverless cars, so-called "wearable" technology (which is focused on sensors, another area we've told you lots about), and robotics.

"The biggest thing will be artificial intelligence," Schmidt told conferees. "Technology is evolving from asking a question to making a relevant recommendation. It will figure out things you care about and make recommendations. That's possible with today's technology."

Google is hardly alone: Back in 2012, Amazon.com Inc. (Nasdaq: AMZN) spent $775 million to acquire Kiva Systems Inc., a company specializing in the kind of robots that can move inventory around warehouses. And Facebook Inc. (NYSE: FB) just bought a drone player - an aerial robotics firm.

In this market, with a strong financial turnaround in place - and a stable of high-quality customers that include Motorola Solutions Inc. (NYSE: MSI), Hitachi Ltd. (ADR) (OTC: HTHIY), and General Electric Co. (NYSE: GE) - Adept could easily turn into a takeover candidate, Michael said.

"You never want to buy a company just on the hope it'll be a takeover play," Michael said. "But Adept is so much more... it's got a great business, a great strategic vision, and a turnaround plan that is yielding results. That's going to pay off... in one of several ways."

We'll keep you posted...

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