Is It Time to Buy (More) MAKO?

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves and advisor David Meier discuss topics around the investing world.

John and David have been thinking of buying additional shares of MAKO Surgical. But they wanted to wait until management gave more information in its earnings release. Here's what they learned. First, despite the decline in system sales growth, procedures increased 66%. Doctors are using the systems. Second, the company continues to update its software, improving the process. Finally, the company has sold systems into larger hospital chains. That's a sign of progress.

MAKO Surgical is making strides, but it isn't humming on all cylinders. It's clear that robotic surgery is still young, though it is progressing. Just look at, for example, Intuitive Surgical, Staar Surgical, Hansen Medical, and even rumblings from Stryker. John and David think it's worth buying a few shares at today's price, even if the clouds haven’t fully lifted.

The recent market sell-off of MAKO Surgical shares has many wondering whether the potential growth prospects of the robotic-surgery company make it a buy today or a stock to stay away from. John and David think it's the former, but investors may want to consider both sides of the debate. Read our premium report to read up on the details of MAKO's story. Click here to access it now.  

David Meier and John Reeves have no positions in the stocks mentioned above. The Motley Fool owns shares of Intuitive Surgical and MAKO Surgical. Motley Fool newsletter services recommend Intuitive Surgical, MAKO Surgical , and Stryker. Try any of our Foolish newsletter services free for 30 days. 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.

Read/Post Comments (3) | Recommend This Article (13)

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  • Report this Comment On August 03, 2012, at 8:36 PM, Dawgpac wrote:

    Here's the bio on the ex-ISRG Director that MAKO hired as Director of Corporate Accounts. Looks like it started to pay off in Q2 with 5 network sales to Tenet(2) Adventis (2), & CHS (1). I posted the link to the bio on the RuleBreakers board:

    Sr. Director Corporate Accounts

    MAKO Surgical Inc.

    Public Company; 201-500 employees; MAKO; Medical Devices industry

    November 2011 – Present (10 months)

    Director Key Accounts

    Intuitive Surgical, Inc

    Public Company; 1001-5000 employees; ISRG; Medical Devices industry

    2007 – July 2011 (4 years) Western United States

    Development and deployment of cohesive product and service delivery to large, strategic regional healthcare organizations. Accounts included: Kaiser Permanente, Catholic Healthcare, Providence Healthcare, Sutter Health, HCA- Far West/ Mountainstar, Adventist Healthcare, Legacy Healthcare, Intermountain Health and VHA/US Department of Defense.

    Director of Sales, Western Region

    Intuitive Surgical, Inc

    Public Company; 1001-5000 employees; ISRG; Medical Devices industry

    2003 – 2007 (4 years) 13 Western States

    Grew 13-state western territory from start up to current presence. Negotiated 18% or 235 of company's 1,285 national robot sales through December 2010.

    Organized and let Intuitive's entrance into the following major medical centers: Seattle, Portland, Sacramento, LA, SF, San Diego, Phoenix, Albuquerque, Reno, Salt Lake City, Denver and Las Vegas.

  • Report this Comment On August 04, 2012, at 12:56 PM, Teacherman1 wrote:

    As things stand now, I would be a buyer if it drops 15% to 20% more.

    If things change significantly in a positive way, I would be a buyer near todays price.

    I think it is a good long term investment, but at my age, long term is much shorter than for most, so I would want a cushion before I would put real money into it.

    It is on my watch list and I am waiting for a really bad "schitzo market" event before I will pull the trigger.

    JMO and worth exactly what I am charging for it.

  • Report this Comment On August 09, 2012, at 7:47 PM, aacole wrote:

    I own the stock and my biggest concern is cash burn. If I understood the management correctly on the earnings call (correct me if I am wrong) They are burning cash at a rate that means they will run out of money by the middle of next year unless they ramp sales significantly. They are projected by some analysts to do it (in 2013), but it is almost like a crap shoot. A couple more Quarterly Earnings misses and they are out of cash and we investors are looking at major dilution or worse.

    I love their story. The risk, however, is not for the faint of heart.

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