3 Stocks That Could Soar as Automation Picks up

Automation is set to hit in three waves, and companies such as BlackBerry Ltd. (TSX:BB)(NYSE:BB) and ATS Automation Solutions Inc. (TSX:ATA) could be big winners down the road.

| More on:

The McKinsey Global Institute estimated in late 2017 that automation could push over 350 million people around the globe into new jobs. It projected that hundreds of millions more will be pushed out of work entirely due to the shift towards automation. A recent report from PricewaterhouseCoopers predicted that automation will hit in three waves.

The first wave will be the algorithm wave, which will automate simple computational tasks and structured data analysis. The augmentation wave is said to be the second wave, with the automation of repeatable tasks, exchanging of information through dynamic technological support, and unstructured data analysis. The third and final wave will be the autonomy wave, which would involve dynamic problem solving in real-world situations. An example of the third wave is the development and introduction of autonomous vehicles.

Jobs hit the hardest by the first wave are those in finance and insurance, information and communications, and professional, scientific, and technological professions. When the augmentation wave is fully underway, it will impact a broad range of sectors from manufacturing to public administration, and even human health and social work.

It behooves investors to prepare for the future economy and identify companies that are either aggressively preparing for this future or are in a position to benefit from it. Today we will look at three companies that fit this description.

Suncor Energy Inc. (TSX:SU)(NYSE:SU) is already gearing up for the augmentation and autonomy phase with its recent moves. Chief Operating Officer Mark Little said in an interview that Suncor will see a net job loss of 400 employees, as it will deploy autonomous ore-hauling trucks over the coming years.

Suncor possesses a fleet of about nine of the Komatsu trucks that it has been testing for four years now. The company plans to build a fleet of 150 trucks by 2024. Unifor criticized the move initially but was reassured by Suncor leadership that the company will seek to add jobs in other areas going forward.

ATS Automation Tooling Systems Inc. (TSX:ATA) is a Cambridge-based company that designs and builds factory automation solutions. Shares of ATS Automation have climbed 23% year over year as of close on February 7.

ATS Automation released its third-quarter results on February 7. Revenues jumped 17% to $277.6 million and adjusted earnings from operations grew to $29.3 million compared to $22.5 million in the prior year. Order bookings experienced a 10% increase to $311 million, and it reported a period end backlog of $689 million — up 9% from January 1, 2017.

BlackBerry Ltd. (TSX:BB)(NYSE:BB) has made waves in its transition into a software company with its mobile cybersecurity offerings and its development of autonomous vehicle software. BlackBerry recently signed a deal with the Chinese firm Baidu Inc. to jointly develop self-driving vehicle technology. The company also conducted the first Canadian driverless vehicle trial in October 2017.

The autonomy wave is not expected to hit high gear until the 2030s, and progress in Canada for research into driverless vehicles has been slower than other developed nations. This makes BlackBerry an attractive long-term play.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. David Gardner owns shares of Baidu. Tom Gardner owns shares of Baidu. The Motley Fool owns shares of Baidu and BlackBerry. Baidu and BlackBerry are recommendations of Stock Advisor Canada.

More on Investing

Retirees sip their morning coffee outside.
Dividend Stocks

Turn Your TFSA Into a Fund for a Comfortable Retirement

A calculated, well-disciplined, and smart approach to TFSA investing can help you turn the account into a way to fund…

Read more »

Asset Management
Stocks for Beginners

How to Build a $40,000 Investment Portfolio That Requires Minimal Maintenance

Building an investment portfolio can't be easier than this. Simply dollar-cost average into XEQT for equity exposure and long-term wealth…

Read more »

Man holds Canadian dollars in differing amounts
Dividend Stocks

Want Decades of Passive Income? 3 Stocks to Buy Now and Hold Forever

These TSX stocks have paid and increased their dividends for years and are well-positioned to pay higher dividends in future…

Read more »

dividend growth for passive income
Investing

Why Investing $5,000 in These Growth Areas Makes Sense Now

Investing in growth areas least impacted by U.S. tariffs can deliver substantial financial windfall.

Read more »

hand stacks coins
Dividend Stocks

How to Allocate $30,000 for Both Current Income and Future Growth

Are you wondering how to earn income and grow your capital (at the same time)? These three quality TSX stocks…

Read more »

Blocks conceptualizing Canada's Tax Free Savings Account
Dividend Stocks

Need $1,000 Each Month? How Much You Need to Invest in a TFSA

Want income and growth? Then consider these three options analysts continue to drool over.

Read more »

path road success business
Bank Stocks

TD Bank: Buy, Sell, or Hold?

TD is up 25% in 2025. Are more gains on the way?

Read more »

Dividend Stocks

5 Canadian Dividend Stocks I’d Buy Now and Hold for the Next 20 Years

Got $10,000? Here's the best way to create a dividend income portfolio that will last at least two decades.

Read more »