Columbia Wanger (Trades, Portfolio) Asset Management purchased a 1,253,920-share stake in iRobot Corp. (IRBT, Financial) in the fourth quarter.
iRobot was founded in 1990 by Massachusetts Institute of Technology (MIT) roboticists with the vision of one day making practical robots a reality. iRobot builds robots for two segments of its business. For the home, it builds the award-winning Roomba, which is a self-cleaning, self-driving vacuum cleaner that cleans on its own without requiring any human assistance. For businesses, iRobot builds and manufactures robots that can provide remote human presence anywhere in the world.
The company has developed the iRobot 500, a self-driving robot with a screen that enables clients to have remote access to business meetings without actually having to physically be there. The iRobot 500 can be accessed remotely by simply using a Smartphone or tablet with the iRobot software. It can program itself to drive wherever it needs to go and then return itself to the recharging dock.
iRobot is also traded in Germany, Switzerland and the U.K.
In early February, iRobot agreed to sell the defense and security sector of the company's business to Arlington Capital Partners, a Washington-based firm that targets government-regulated industries and adjacent markets. The company looks for opportunities to purchase undervalued middle market companies.
Before Arlington Capital Partners purchased iRobot, the company had already shipped more than 6,000 defense and security robots to researchers and military and civil defense forces worldwide. These robots are highly technologically advanced and have been through dangerous and hostile environments including situations that involve bomb disposal and situational awareness in battlefield reconnaissance.
Columbia Wanger (Trades, Portfolio) Asset Management was founded in Chicago in 1992. The firm primarily provides its services to investment companies as well as pension and profit sharing plans. The firm primarily invests in small cap and mid cap holdings.
Columbia Wanger (Trades, Portfolio) has close to 80 employees and currently owns 175 stocks with a total value of $9.98 billion.
After being impressed with iRobot overall, I decided to go through the company’s SEC filings. I was impressed with the company's honesty and rationality on its inherent risk factors and potential obstacles it will be facing moving forward.
I first went through the company's 10-Q filings and immediately went to the risks related to its business. I already knew its Roomba was a great product as my friend used to have one when I was living with him. When I went to its most recent filings, I found the company risks related to the business.
iRobot thoroughly understands those risks. It made a smart decision as a company to sell out its defense and security sector because now it can focus on its most popular product – the Roomba vacuum cleaner – and its most innovative product – the iRobot 500.
iRobot has a powerful financial strength rating of 9/10, according to GuruFocus, with no debt, which is an excellent sign. The company’s profitability and growth rating is 8/10 with an operating margin percentage of 9.17, ranking it higher than 76% of the 2,195 companies in the global consumer electronics industry.
iRobot is a profitable investment:
The company is trading below its intrinsic value.
The company has excellent products.
The company is in zero debt and has a strong profitability and growth rating.
The company has more than two decades of experience in its industry.
The company is aware of the inherent risks involved in its industry and is strategically moving forward.
Cheers to your investment success.
