The company makes surgical robots that help human surgeons make smaller, cleaner, and more precise operations. They’re not a replacement for trained doctors, but a powerful tool in their skilled hands.
What’s so disruptive about that?
It’s a combination of several important factors:
The da Vinci robot supposedly gives patients a better outcome than traditional surgery options done by hand. You get smaller scars, faster recovery, and thanks to the less invasive nature of robotic surgery, safer operations as well.
The system is approved to perform some high-volume procedures including prostatectomies, cardiac surgery (without cracking the breastbone), and various gynecologic corrections. Many of these conditions share one characteristic: They become more common with advancing age.
And that brings us to the big zinger. Baby boomers are just about entering retirement age, and will collectively need an unheard of amount of medical care over the next couple of decades. This is simply the best time in history to invest in medical specialists as they enter a golden age.
That’s particularly true when one company has a virtual monopoly on a proven medical technology. Intuitive Surgical, Inc. (NASDAQ:ISRG) developed robotic surgery equipment that nobody else could match — and then bought its only serious rival. Other companies can grab hyper-specialized niche markets — MAKO Surgical Corp. (NASDAQ:MAKO) ‘s knee replacements come to mind, and Accuray Incorporated (NASDAQ:ARAY)‘s tumor-busting CyberKnife also gets thrown around a lot by Intuitive’s skeptics. These companies may very well become great long-term investments in their own right, but they can’t hold a candle to the big dog’s sheer scale. Until Intuitive Surgical, Inc. (NASDAQ:ISRG)’s core patents expire, the company simply doesn’t have any competition.
ISRG Revenue TTM data by YCharts.
This stock has just about doubled since I bought it in 2010, and I expect it to double again in the next five years. That being said, I recently took some profits on my position to diversify my holdings a bit. (What did I buy? The best stock for new money now, of course!) The position had grown almost as large as my Netflix, Inc. (NASDAQ:NFLX) holdings, and I’m somewhat more confident in Netflix staying sharp for decades to come. I’m more of a tech guy than a medical expert, after all.
The article My Top 2 Stocks: Netflix and Intuitive Surgical originally appeared on Fool.com and is written by Anders Bylund.
Fool contributor Anders Bylund owns shares of Netflix, but he holds no other position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. The Motley Fool owns shares of Netflix and MAKO Surgical. Motley Fool newsletter services have recommended buying shares of Netflix and MAKO Surgical.
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