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 Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Cheapest Cities to Visit in the US

Most Expensive Summer Camps

Most Expensive Animals in the World

Most Expensive Specialty Crops in the World

Movies That Took Ages to Make

The Longest Hollywood Films Ever Made

Most Expensive Concert Stages

The Richest Bands of all Time

10 Most Corrupt Countries 2013 List

10 Countries with the Highest Quality of Life Index

Most Expensive Mattresses in the World

5 Smallest Countries by Land Area

The Ultimate Heartbreak Songs

Richest Teenagers in the World

10 Most Haunted Places in America

10 Best Places to Retire in Florida East Coast

Top 10 Places to See Before You Die

Top 8 Countries in the World Where Justice Prevails

10 Richest States in America

15 Wealthiest Countries in the World

Richest Singers in the World

Most Expensive Tasting Menu in New York City

Most Expensive Baby Items in the World

Most Expensive Hotel Suites in Vegas

Most Expensive Brunch in New York City

Most Expensive Beef Cuts in the World

25 Best Colleges to Get a Job

Top 10 US Supermarkets

The 25 Most Dangerous Cities in the World to Visit

Most Expensive Xbox Games

Top 11 Cities Where Billionaires Live

Top 10 Most Charitable Companies in America

Most Expensive Seafood in the World

The 10 Wildest Conspiracy Theories

The 10 Best Job Markets in the US

Top 10 Accounting Scandals of All Time

The 25 Biggest Cities in the World

Top 10 Best Paying Virtual Jobs

Most Expensive Leather Shoes in the World

Top 6 Things to Buy in March

The 10 Most Stressful Jobs in America – 2014 List

Top 10 Jobs for Introverted People

Top 10 Honeymoon Destinations in the World

Top 10 Highest Paying Jobs in the World

Most Expensive Day-Care in New York City

The 10 Cheapest Places to Retire Abroad

Top 10 Most Expensive Luxury Cars in the World – 2014

Killer Small Business Ideas

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!