There are a lot of reasons to like Intuitive Surgical (NASDAQ:ISRG); for starters, it's a manufacturer of state-of-the-art robotic surgical equipment and a Motley Fool Rule Breakers recommendation.
There's plenty more to love. The company has also made continuous progress over the past four years in increasing the percentage of prostatectomies that its da Vinci robotic system has performed. In 2003, the number stood at a modest 3.4%. In 2004, the number climbed to 10% and then doubled to 20% the following year. For 2006, the figure is expected to come in around 35%. If the company can follow a similar progression for hysterectomies -- a procedure that is performed five times as often as prostatectomies -- it could represent another nice stream of income.
A second reason I am bullish on Intuitive Surgical is because so many hospitals still have not purchased its system. According to an interview that fellow Fool Rich Smith conducted with Intuitive Surgical's CEO Lonnie Smith back in October, the CEO stated that he felt that his company had "penetrated less than 10% of the U.S. market." That tells me that there is still a lot of room for the company to grow in the mid-term -- and this is before we even begin considering the international market.
But the real reason I like Intuitive Surgical is because I am convinced that robotic surgery is the future of surgery, and that an increasing number of operations -- even for complex surgeries -- will soon be conducted by robots. This is a trend that will also benefit other companies involved in the field, such as Hitachi (NYSE:HIT), Integrated Surgical Systems, and MicroDexerity.
I was reminded of this fact this morning after I finished reading this article about the use of software for surgical planning. The gist of the article is that better software will continue to improve surgeons' performance levels in meeting the demanding requirements of cardiovascular surgery.
The article was careful to point out the technology is "three to five years away from being ready for general use," but the fact that Intuitive Surgical has already been approved by the FDA for some cardiac and mitral valve repair operations gives me great confidence. When the technology is ready, the company should be well-positioned to benefit from this trend and able to keep the profits pumping by expanding into the heart surgery business.
Interested in other robotic Foolishness? Check out these articles:
- The Intuitive Future of Medicine
- Are Intuitive Surgical and iRobot Just Babies?
- Intuitive Surgical and Internet2
- Toyota Jumps the Competition
Intuitive Surgical is a Motley Fool Rule Breakers recommendation. If you are interested in signing up for a free 30-day trial to the newsletter, just click here.
Fool contributor Jack Uldrich has a soft spot in his heart for companies with rule-breaking potential. He owns share in Intuitive Surgical. The Fool has a strict disclosure policy.
