Investing in Automation: 6 Signs to Look For

October 15, 2020 • Devin Partida


Automation is what brings technology and business into the future. It has immense power, but only if investors choose the right companies and systems. To do so, you must look at several factors when considering a company to back. Investing in automation is a careful task and therefore must receive keen attention.

Here are the signs you should look for to maximize your chances of netting a big return.

1. Relevance

The first thing you should look for when investing in automation is relevance. Since things like artificial intelligence (AI), the internet of things (IoT) and big data have become popular, it’s important to find companies that use up-to-date software and systems. If they don’t, they’ve fallen behind on the trends.

Furthermore, the industry they work in may indicate how relevant the company is. Health care is a major focal point throughout the United States right now. Therefore, companies that automate health care will be highly relevant. For instance, Intuitive Surgical Inc. is a surgical company that uses automation to perform procedures. It’s a beacon of what’s to come in the future and could be where you want to invest.

Other relevant industries include food, manufacturing and smartphones.

2. Track Record

After you narrow down your search, you can look into the clients served and the natures of the services each automation company provides. These connections will be an indication of how well an automation company may be doing on the market.

Take a look at the company’s past. How well has it performed historically? Does it have a tendency to fluctuate? Volatile stocks may be good for short-term investments once you sell when the stock is high. However, for long-term investments, it’s best to find steadily rising companies in automation.

3. Versatility

The next sign you should consider is how versatile a company is. Their track record can be an indication of this flexibility. However, make sure you do a full search on their site.

Automation companies that perform well may have a range of abilities. If they do, it’s likely that they have a strong following, with other industries and businesses depending on them. These connections are a good sign that the company can change and adapt to fit the trends.

If they only focus on a certain area, like unmanned aerial vehicles (UAVs), that’s okay, too. You’ll want to see how well the company can adapt to the industry and make a name and profit for itself. AeroVironment is one example of a drone automation company that’s popular for investing right now.

4. Tech and Gadgets

Since automation companies are working in the tech industry, they will need the best tech, gadgets and software to make them a wise investment. The company you choose should be able to cover a range of fields. However, you’ll want to know exactly what tech and software they work with.

Home automation is currently hot. Everyone wants a piece of smart home tech like home assistants and hubs. These companies, like Amazon or Google, are typically safe bets for investing.

As for workplace technology, some companies use software like Moosend for email automation. Other systems, like Ontraport, cover business automation as a whole. If companies are utilizing AI, IoT and big data to their fullest potential, it can make all the difference.

5. Value

A deciding factor for your automation investment may be the price tag. Innovation can be expensive in the tech world, so you may be looking for more cost-effective options when you choose your stocks.

Sometimes it’s best to invest when the stock dips lower but shows resilience — one that you know will bounce back and keep working upwards. Other times, you may want to invest right before a new announcement that will boost investments.

For instance, if the industrial automation company Rockwell Automation were to announce a new hardware or software system, investments may boost its value. You can get on board with the trends to ultimately get the best value.

6. Resilience

The last sign to keep your eye on while investing is resilience. It’s critical to understand how efficient a company can be at maintaining its status. If it faces an impediment, has it bounced back better than ever? The value can be an indication of this resilience, but you’ll want to make sure the company shows promise.

Resilience is about results. Once a company demonstrates that it knows how to navigate the market, through obstacles like pandemics and politics, then it’s likely a good automation company to invest in.

Investing in Automation Wisely

The right stock can be hard to decide on. You’ll want one that fits your financial needs and that proves to be an asset rather than something you have to worry about.

To find the right one, follow these tips. They’ll be essential in weeding out the automation companies that aren’t worth the investment. Instead, following them will lead you down the right path — one that you can rely on.

Automation is a growing industry and now is the time to invest. Doing so could be a very wise decision for the present and the future.