In this segment fromRule Breaker Investing, Motley Fool co-founder David Gardner dives into one of five stocks that could earn a spot in your portfolio. Tune in to learn more about Intuitive Surgical (NASDAQ: ISRG)-- the leader in robotic surgery with its da Vinci system.
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A full transcript follows the video.
10 stocks we like better than Intuitive Surgical
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This podcast was recorded on April 19, 2017.
David Gardner:OK, stock number four. This is one of my very favorite stocks of all time. If you're aRule Breakersmember, you might know what's coming. It's been picked six separate times inMotley FoolRule Breakersand I like it just as much over the next three-plus years. The company name isIntuitive Surgical. The ticker symbol is ISRG.
I was looking back over all of the podcasts I've done so far in which I've picked stocks, and I realized I've never once picked this stock, so I want to make sure that I do, so that you hear from me how much I love this company. The stock, as we're talking, is trading at $759 a share, or so, and the market cap is $28 billion as we talk today.
Now this stock I first found in March of 2005. This is one of those times where I get to brag very briefly. The stock was at $44.16 on that day forRule Breakersmembers. I know some of you (I hope some of you) still hold the stock today because from $44.16 to $759 has been a beautiful 12-year ride. It is up 1,621% for us. It is the number three performer of all time atMotley FoolRule Breakers. So yes, we have two that have done better. By the way, they're both Chinese companies.
And well, why not? I guess this is the time where I should queue up mentioning theRule Breakersservice really briefly because we're highlighting disruptive growth stocks like Intuitive Surgical and those two unnamed Chinese companies where if you're already a member you know what they are. But if you're not, a new issue of ourRule Breakersservice comes out with two new stock recommendations from me the last Wednesday of every month. Do head to RuleBreakers.com to learn more if you're interested.
Anyway, Intuitive Surgical is a company that is the leader in robotic surgery. The da Vinci surgical robot has become one of the great medical products of its time. If you're picturing a robot that moves around and does surgery on you, that's not what we're talking about here.
We're talking about what is generally a large machine sitting next to the patient lying down on a table with four big arms on that machine, and the doctor is either near the machine in the same room. Might not even be in the same room. Could even, technically, be in a different city using this machine.
Experts who know how to use the machine manipulating the arms and creating a much better surgical result for patients who are having traditionally prostatectomies (the removal of your prostate) if you have prostate cancer. Or hysterectomies. More recently hernia repair. Growth areas -- colorectal surgery. These are all minimally invasive, robotic-driven surgeries.
Again, they're being done by humans using much more amplified technology. Imagine how much better a robot can see, at a micro level into a body, than the human eye can, or how much more cleanly and with precision it cuts into you or me if we're having these surgeries.
There was controversy -- and still is, sometimes -- for Intuitive Surgical over the last decade or so where some doctors say you don't get any better result than if you'd just done the traditional form of surgery. And these are expensive machines, and everyone's looking to keep healthcare costs down, so what are we doing buying da Vinci surgical robots?
What is always missing in my experience from that accusation is the patient's point of view. So yes, if you're a hospital or a doctor you might say, "Hey, the prostate comes out either way." But if you're a patient, I certainly ... I haven't had the surgery. I hope never to have it, but if I do, I'll be selecting this because it's minimally invasive. Nobody is cutting you open in a significant way. You're walking away from the hospital usually a day or two later, so you're saving a few days of hospital stay, which is very consequential for the hospitals, so that part saves a lot of money.
And really, from the patient's eyes, which is sometimes where healthcare misses and where these criticisms in my experience miss through the patient's eyes, it's pretty much a no-brainer in my experience. So if you have one nearby, and you need the surgery I like, for you, the da Vinci surgical robot.
Certainly Intuitive Surgical has done wonderfully. A quarter of a billion dollars last year spent by this company. A quarter of a billion dollars just on research and development. So not only is it the leader with strong sales (multibillion-dollar sales [and] a good, stable growth rate over time), but it is putting more money away just in R&D on an annual basis than some upstart competitors would ever have in revenues, let alone earnings.
So I really like this company. I see a world of more and better minimally invasive precise surgery. I don't think Intuitive will be the only winner. Like a lot of big trends there will be multiple winners, but this has been and will continue to be the leader. And you know that I like the leader. After all, if you're not the lead huskie, the view never changes.