With Intuitive Surgical (ISRG -0.37%) vaulting 615% over the last decade, TransMedics Group (TMDX 4.66%), rising 291% in the last three years, and Medpace Holdings (MEDP -0.51%) up 324% since 2018, investors may feel like they missed their buying opportunity with these three healthcare stocks.

But these businesses actually look more robust than ever and are poised to extend their market-beating ways thanks to strong products and clear megatrends. While Intuitive Surgical and TransMedics look to continue building upon their first-mover advantage, Medpace offers enticing growth prospects as the biotech industry extends its double-digit growth rates.

Here's why investors should consider filling their portfolios with these sub-$300 investments.

1. Intuitive Surgical: Up 615% over the past decade 

Commanding a dominant 80% share of the global surgical robotics market, Intuitive Surgical and its da Vinci and Ion systems have completed over 13 million procedures since the company's founding. Through its minimally invasive surgeries, Intuitive's robotic systems shorten patients' recovery time compared to traditional surgeries while providing surgeons with more ergonomic operating conditions.

Currently, the company focuses on five clinical applications with its robotic surgeries: general (hernia repair, bariatric), urologic (prostate, kidney), gynecologic, cardiothoracic, and head and neck. This gradually expanding set of procedures has grown to over 70 clinical use cases using da Vinci surgical systems, building a wide moat that has yet to be crossed by its peers. With an installed base of over 8,000 systems in hospitals globally (4,800 in the United States and 3,200 internationally), it is tough to argue that Intuitive doesn't have a firm grip on the industry. 

Most importantly for investors, thanks to Intuitive's modern-day razor-and-blade model, installing these systems only accounts for 21% of revenue, which has declined from 30% in 2015. Making up the other 79% of sales, the company's instruments, accessories, services, and operational leases generate high recurring revenue, providing the company with years of stability following a system's installation.

In its latest quarter, Intuitive posted sales, earnings-per-share (EPS), and free cash flow (FCF) growth of 15%, 39%, and 54%, respectively, while its installed base increased by 13%. Firing on all cylinders, the company trades at a lofty forward price-to-earnings (P/E) ratio of 52. 

However, one of its peers, Medtronic, estimates that only 5% of the world's surgeries are done robotically, meaning that this marathon growth story is only in its first few miles. Thanks to Intuitive Surgical's dominant market share and the wide moat provided by its massive installed base of systems, I'll happily pay a premium to bet on this first mover to win the race.

2. TransMedics: Up 291% over the past three years

To put it succinctly, nobody else does what TransMedics does -- well, at least on their level. The only Food and Drug Administration-approved multi-organ platform, TransMedics' technology keeps donated lungs breathing, hearts beating, and livers functional while on their way to their recipients. By keeping the organs warm and oxygenated while providing them with nutrient-enriched blood, the company is revolutionizing how transplants are done.

In 2021, 14,905 donors passed away, but only 18% of the lungs, 28% of the hearts, and 60% of the livers from these benevolent souls were utilized -- highlighting the horrific inefficiencies of the existing transplant industry. Currently relying on outdated cold storage processes, this old transplant methodology does not provide oxygen to the organs, meaning they must be donated within eight to 12 hours. TransMedics' organ care system extends this time frame to 20 to 30 hours, allowing for much higher utilization rates, as the organs have more time to be transported if needed.

TMDX Profit Margin (Quarterly) Chart

TMDX Profit Margin (Quarterly) data by YCharts

Growing second-quarter sales by 156% and guiding for 93% to 103% revenue growth for the year, the company is in hyper-growth mode. Despite this, its net profit margin is nearing breakeven. 

A truly incredible feat for such a fast-growing company, TransMedics' price-to-sales (P/S) ratio of 12 (its lowest since 2020) could rapidly be outgrown as the first mover's organ care system becomes the industry standard. 

3. Medpace: Up 324% over the last five years

In its own way, Medpace acts as a trail guide of sorts for first-time hikers -- except instead of a trail guide, Medpace is a clinical contract research organization (CRO) that helps its hikers (small-to-midsized biotechs) traverse the phases of the clinical trial process. Differentiating itself from its CRO peers, the company provides a full suite of services needed by these smaller biotechs, which account for 96% of its sales. 

Whether helping with patient recruitment, clinical monitoring, regulatory affairs, or laboratory services, Medpace brings many tiny biotechs' grandest ambitions to life, providing services its clients would otherwise be too small to perform. Although there are many CROs, Medpace is the only one of its peers delivering steady, double-digit net profit margins.

MEDP Profit Margin Chart

MEDP Profit Margin data by YCharts

Better yet, this industry-leading profitability comes alongside annualized sales growth of 26% over the last five years. With business consulting firm Grand View Research projecting the U.S. biotechnology industry to grow by 12% annually through 2030, Medpace should see no shortage of work anytime soon.

Growing revenue by 31% and its backlog by 19% in its most recent quarter, the company continues to dominate its market -- even in what has been an otherwise troubling time for small biotechs running low on cash. On top of this, there is one final observation to make: Management appears to be a brilliant capital allocator. Consider this chart:

MEDP Chart

MEDP data by YCharts

Notice how each time the company's share price dips, management swoops in with a buyback to pick up shares on the cheap. Doing this opportunistically, Medpace has lowered its shares outstanding by 15% over the last three years, creating value for shareholders.

Trading at 21 times FCF, Medpace is a reasonably priced business for investors looking to participate in the biotech industry's clear tailwinds.