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Bull of the Day: Inuitive Surgical (ISRG)

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Company Overview

Zacks Rank #1 (Strong Buy) stock Intuitive Surgical ((ISRG - Free Report) ) is a company known for its expertise in creating and producing cutting-edge robotic assisted systems. Their primary offering, the da Vinci Surgical System, is crafted to enhance surgeons’ precision, control, and skillfulness during procedures. This innovative system enables surgeons to conduct surgeries through openings by maneuvering robotic arms from a central console. Widely utilized across fields such as urology, gynecology, general surgery and cardiothoracic surgery, the da Vinci system aims to elevate patient outcomes, shorten recovery periods, and mitigate surgical risks.

 

Moat + Aging Population

Since ISRG’s IPO in 2000, the stock has gained over 10,000%! What’s behind the performance? ISRG’s da Vinci surgical system is so complex, and the company is so well ahead of its competition that it has a wide moat. Furthermore, as populations age worldwide, ISRG will benefit from the need for more surgery.

 

ISRG Relative Strength: Tennis Balls vs. Eggs

Relative strength is one of the most powerful tools I have used throughout my investing career. I have discovered that often, the best way to understand and simplify investing concepts like relative strength is through metaphors. Because roughly 75% of a stock’s move is attributed to the general market’s direction, the best time to look for strength is in a down market like the one we are currently in. When an egg hits the ground, it breaks (weak stock); when a tennis ball hits the ground, it bounces (strong stock).

Investors want to focus on tennis balls because of the sheer fact that if they are able to hold up so well in a poor market, they are likely to dramatically outperform when the market regains its footing. ISRG is currently up 45% year-to-date versus 18% for the S&P 500 Index. Meanwhile, ISRG is hanging tough and is off just 4% from its all-time highs, despite the recent carnage in the market.

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Image Source: Zacks Investment Research

 

Bullish EPS Surprise History

ISRG has delivered six straight quarters of positive EPS surprises.

Zacks Investment Research
Image Source: Zacks Investment Research

 

Medical & Biotech Stocks Will Benefit from Lower Rates

With the worse-than-expected employment numbers last week, Jerome Powell and the Federal Reserve are almost guaranteed to cut interest rates. Stocks in the healthcare industry gain advantages from lower interest rates due to decreased borrowing expenses and increased investment capital.

 

Bottom Line

Intuitive Surgical is a leading innovator in robotic-assisted surgery with its da Vinci Surgical System. The company benefits from an aging population and a solid competitive moat.


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