Ring in the new year with more stocks for 2008.

What will be the best-performing stock in 2008? Well, here's as honest an answer as I can give: I just don't know. I'd like to introduce you to a contender, though: Intuitive Surgical (NASDAQ:ISRG). I discovered it via our Motley Fool Rule Breakers newsletter. To paraphrase Chico Escuela on "Saturday Night Live," it's been very, very good to me. In a little more than a year, the stock tripled. (Read about my gains.) Over the past five years, its compound average annual return has been more than 90%.

So what does this company do? Well, the fact that I found it in our Rule Breakers newsletter should tip you off: It's a leader in an innovative new field, breaking the rules and replacing the status quo. The company specializes in medical robotics, making machines that perform surgeries.

Think of it this way: Imagine that a surgeon needs to cut into you and do some extremely precise maneuvers in you, cutting this, attaching that, avoiding this and that. You might very reasonably be worried about his or her hand shifting or twitching just a little -- enough to maybe paralyze you or cause other problems. Enter Intuitive Surgical. With its da Vinci robotic surgical system, surgeons can make relatively large movements with their hands outside your body, which are translated to much smaller movements carried out by the machine inside your body. The machine can control for hand tremors, too, and it permits much less invasive surgeries, with faster healing times and fewer complications.

What's to like?
There's much to admire about this company, other than the way it stands to change how surgeries are performed. Its net profit margin, for one thing, approaches 23%, while its gross profit margin tops 67%. Its revenues have grown at more than 50% annually over the past few years, with return on assets and equity approaching 14% and 18%, respectively.

Then there are definitely competitive advantages. Intuitive Surgical doesn't really have any direct competitors -- that's probably the main reason for the 90% yearly gains. Hansen Medical (NASDAQ:HNSN) and Stereotaxis (NASDAQ:STXS) both sell surgical robots, but for a different type of surgery.

The company already has machines installed in many hospitals. It's not a simple matter for these customers to change their minds and switch to other machines. Intuitive Surgical also holds a number of valuable patents. Newcomers into the industry can't just copy much of what Intuitive does.

The downside
Is there any downside to this company, any reason to perhaps avoid the stock? Sure -- as with almost any company. For starters, if you want a dividend, you're out of luck. The company is plowing profits into fueling growth, not dividends. 

Another risk is that its hefty revenues (about half a billion dollars per year) come from very high-priced offerings. The da Vinci systems generally cost more than a million dollars apiece. A few delayed purchases can make a big dent on the bottom line. In addition, the customers are hospitals, which can sometimes be in periods of restricted spending, with little cash on hand.

Finally, consider how much the stock has appreciated already. By many measures, it's not exactly cheap. According to Yahoo! Finance, its trailing price-to-earnings (P/E) ratio was recently 106, while its forward P/E was a still-steep 69. (Note, though, the degree to which the P/E drops over just a year. That's due to the company's rapid growth.) Having advanced so rapidly, it's not unreasonable to expect a pullback or a slowdown in appreciation in the near future. Still, for the long term, and very possibly for 2008 as well, this looks like a winner to me.

Learn more
At our CAPS service, more than 2,000 people view the stock bullishly, with only about 100 on the bear side. Among our "all-star" stock performance predictors, 97% are bullish. Click in to see what folks think of it, and cast your own vote, too. Then come back later in the week when we reveal the best stock for 2008.

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Longtime Fool contributor Selena Maranjian owns shares of Intuitive Surgical. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.