When Vehicles Talk, Good Things Happen

Teck Resources is using talking trucks to increase safety and save money— technology that Trimble Navigation is already well acquainted with.

May 16, 2014 at 11:13AM

Teck Resources (NYSE:TCK) is working with privately held SAFEmine to help avoid workplace vehicle accidents. That's a real-world example of how connecting the things around us using modern technology is changing the world. You can invest directly in this concept by owning Trimble Navigation (NASDAQ:TRMB).

Safer mines
Mining is a dangerous job. Trucks the size of large houses moving around in the same space as normal-sized pickup trucks is a recipe for disaster. While the pickup truck will lose against a giant dump truck, that doesn't mean there won't be damage to the massive machine. That's not to mention the impact of any downtime for repairs, which reduces productivity. Mining equipment is very expensive, so most companies don't keep extra trucks around.

That, of course, doesn't even take into consideration the impact that accidents can have on the lives of employees. It's why just about every miner talks about safety. For example, Teck CEO Don Lindsay noted in the company's annual report that, "Total reportable injury frequency and lost-time injury frequency were at the lowest level ever." in 2013. It was the third consecutive year of improvement.


(Source: dave_7, via Wikimedia Commons)

Projects like installing collision avoidance systems are a key part of that. Here Teck worked with SAFEmine to put GPS-based devices in vehicles so they can warn operators before accidents take place. If you drive a car, you know all too well that sometimes you just don't see things that you need to see. The results of the trials were so impressive that Teck decided to roll the technology out to all of its surface mines.

Incremental, but important
Will you see the results of this initiative drop down to the bottom line? Probably not. However, it is this type of interconnected advance that allows Teck to keep its costs down. In the first quarter, the miner announced that it is cutting sustaining and development capital spending this year by an additional $150 million. On the sustaining side, "the deferral of equipment purchases" was a specific highlight.

Ensuring that giant, expensive trucks don't ram into each other is what allows for that to happen. The results? In a test of the SAFEmine system, speeding incidents, "close interactions" between small vehicles and trucks, and "close interactions" between large trucks all fell about 50%. That's the type of improvement that lets you put off the purchase of new machines.

GPS to the rescue
A GPS system is the heart of this advance, since it lets a computer track where every truck is and, more importantly, what's around every truck. That's not all that GPS can do, however. For example, Trimble uses GPS to enhance farming and construction equipment. Trimble's GPS systems can direct a human operator or just run the machines itself in some cases.

Using a computer and a connected fleet of machines, Trimble essentially allows for more precise work. In the farm space, that can increase crop yields (more revenue) and, if you let the machines run themselves, reduce staffing needs (lower costs).

The focus on interconnecting machines is why Trimble's revenues continue to head higher while the GPS industry's nameplate player Garmin (NASDAQ:GRMN) has seen its top line decline. Devices that provide directions are nice, but growth is over in the space. On top of that, major competitors like automakers are incorporating GPS into their own systems.

GRMN Revenue (Annual) Chart

GRMN Revenue (Annual) data by YCharts

It's about doing more
Putting some numbers to that, over the past five years, Trimble's revenues are up over 100% while Garmin's top line has fallen 10%. Clearly, taking GPS and connecting it to other devices so it improves overall performance is more valuable than just selling a stand-alone GPS. In other words, if you want a GPS play, buy Trimble and avoid Garmin. Trimble's ability to connect devices is exactly why major companies like Teck are able to make minor, but important changes that make shareholders richer.

It's about a new, connected world
Let's face it, every investor wants to get in on revolutionary ideas before they hit it big. Like buying PC-maker Dell in the late 1980s, before the consumer computing boom. Or purchasing stock in e-commerce pioneer Amazon.com in the late 1990s, when it was nothing more than an upstart online bookstore. The problem is, most investors don't understand the key to investing in hyper-growth markets. The real trick is to find a small-cap "pure-play" and then watch as it grows in EXPLOSIVE lockstep with its industry. Our expert team of equity analysts has identified one stock that's poised to produce rocket-ship returns with the next $14.4 TRILLION industry. Click here to get the full story in this eye-opening report.

Reuben Brewer has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information