2018 Investment Series Post 1

Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, January 5th.

iRobot Corporation (IRBT)

The first pick of the series is going to iRobot Corporation. While the company name may not sound familiar, many of you may have heard of Roombas. iRobot Corporation was founded in 1990 by 3 MIT graduates who designed robotics for space exploration and military defense. How they ended up inventing the Roomba, a robotic vacuum cleaner, in 2002 baffles me, but they are still going to receive my $1,000 investment.

About The Stock

IRBT stock had been hanging around the $30-$40 dollar range from mid 2013 until mid 2016. From mid 2016 until mid 2017 the stock rallied from $35 to as high as $108. The stock may have once been dormant but now clearly has the attention of investors. I acquired the stock for close to $81 per share. The stock has a price to earnings multiple of around 33 right now which isn’t absurd if you consider the company to be a growth tech stock. With a market cap of 2.25 billion dollars at the time of writing iRobot Corporation falls into the small-cap category.

If you aren’t sure what some of the things in the paragraph above mean I urge you to check out my guide on the different types of stocks.

The Speculation

While robotic vacuums are cool and all, I would be lying if I said I am buying this stock for Roomba sales. I am much more interested in what makes the Roomba work. iRobot corporation ranked 5th, ahead of giants like Sony and Samsung, for the electronics category in the 2017 “Patent Power” rankings by the Institute of Electrical and Electronics Engineers (IEEE). In other words, the company is a patent powerhouse. To me this is more promising than the vacuums. A strong patent portfolio is a huge competitive advantage as well as an attractive quality for any larger player that may consider acquiring this robotics company.

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