Machine vision: a great investment opportunity

So I was browsing the relaunched AIA website, (www.machinevisiononline.org) and noticed a link to “Machine Vision Stock Market Performance.” This led me into an interesting set of charts comparing the performance of a basket of machine vision companies with that of the Nasdaq, TSX, and DAX indexes.

I say interesting because I hadn’t realized just how badly the machine vision companies had underperformed the broader market. Yes, everyone is down, but machine vision is down much more.

I suggest two possible explanations. First, could it be that machine vision companies were actually overvalued back in 2003-4 when the index was initiated? Or second, does the investment community just not see any growth potential in machine vision?

I suspect the truth is a little of each. There may well have been a minor “vision bubble” back in ’03-’04 that led to some inflated valuations, but I also think that investors see vision as a capital equipment purchase driven by manufacturing industry. And as there’s a perception in some quarters that automated inspection is unnecessary in low cost (BRIC) countries, I suggest that this has resulted in some low growth expectations.

Now if you’ve been following this blog for any length of time you’ll know that I firmly believe we are on the cusp of dramatic growth as machine vision takes off in areas like security and agriculture. What does this mean? It means you should find room in your portfolio for a few machine vision stocks.