Fanuc Stock: Robotics Exposure Grows While Revenue Stalls

Ever notice the phenomenon of after you encounter a new concept or word that you suddenly notice it all over the place, as if it never existed before? This is known as the frequency illusion (also the Baader-Meinhof phenomenon, named after a German terrorist organization of all things). The reality is that this amazing new idea or phrase that you are now privy to was always there, but humans have cognitive defects like selective attention and confirmation bias that blind us to extraneous information. 

Is Value vs Growth an Illusion?

We’re nothing if not educational here at Nanalyze, though the frequency illusion is also our somewhat clever intro to today’s article about Fanuc Corporation (6954.T), a Japanese industrial robotics firm. We opened a position in Fanuc last year after analyzing the top 14 industrial robotics companies. We decided it offered the best exposure to a theme that we still believed in after dropping Teradyne, an automatic test equipment manufacturer that had pivoted into robotics through a series of acquisitions. However, revenues in that segment had long stalled out. One drawback of Fanuc, aside from its very Japanese way of communicating its financial picture, is that the company has more value characteristics than growth.

This concept – value versus growth – is certainly not new. But it has come up with some frequency lately, most recently in our ar