Intuitive Surgical, Inc. (ISRG): Trade-In Sales Data Help Confirm Bullish Case

Page 1 of 2

Intuitive Surgical, Inc. (NASDAQ:ISRG) is a particularly unique medical equipment company that may offer massive long-term potential for investors.  For those of you unfamiliar with their product, the “da Vinci surgical system” it is a robotic device that operating surgeons control manually using a 3-D high-definition visual port.  If you have a moment, I would highly recommend web searching a video of their surgical system to see it in action.

Intuitive Surgical, Inc. (NASDAQ:ISRG)

Intuitive’s business will go under the knife in this article, and we at Insider Monkey will point out some simple facts that might indicate this robotic equipment dominator is growing in the right direction.  At the end of our analysis, we’ll take a glance at some other medical equipment producers and healthcare stocks that might also be good for your portfolio.

Intuitive’s robotic surgical system is designed for minimally invasive surgery and is claimed to be highly beneficial for patients undergoing certain procedures because smaller incisions are made.  This means less pain, shorter recovery time, and less time spent in the hospital.  Over time it’s likely that the applications of robotic surgery will expand as improvements are made in this field to even more advanced surgeries.  Only time will tell if their stock will burst into quadruple digits, but some of their numbers hint that they’re headed in the right direction (see why ISRG shares have surged higher lately).

Intuitive is now on their third generation of da Vinci surgical systems (1st. Standard da Vinci system, 2nd. da Vinci S system, 3rd. da Vinci Si system).  They generate revenue from the da Vinci system itself, along with peripherals and servicing contracts to maintain these systems.  As Intuitive upgrades their da Vinci systems, some customers exchange their old unit for a new one, and refurbished units can be re-sold at a lower price to other customers.  Trade-in sales can be an important metric for growing businesses and an excellent indicator of 1) existing customers who continue to use their product, 2) new customers, who may not want the newest model, and 3) existing customers who like the product and want to buy extra units second-hand at a discounted price.

Fortunately, we have some numbers that tell us what customers might be up to.  Looking at Intuitive’s unit sales from 2009-2011, 16% involved trade-ins in 2009, 19% in 2010, and over 28.5% in 2011. For 1Q-3Q 2012, Intuitive has reported roughly 26% of unit sales from trade-in systems.

This is good news for Intuitive, but why?

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

The 20 Biggest Contracts in MLB History

The 7 Worst Blown Calls in Sports History

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!