Mazor Robotics: The Next Intuitive Surgical
07/01/2016 7:00 am EST
To kick off our new Opportunities in Healthcare Portfolio, we are adding an exciting company that is definitely on the launch pad of rapid growth, asserts growth stock expert Todd Shaver, editor of The Bull Market Report.
If the name Intuitive Surgical (ISRG) is familiar to you, then minimally invasive robotic surgery needs little explanation.
Robotic surgery is less invasive, safer (less risk of infection, less exposure to radiation), and results in faster patient recovery times.
While Intuitive Surgery is the king in urological procedures, our new recommendation — Mazor Robotics (MZOR) — is on its way to becoming the king of robotic spine and brain surgery.
The company makes money in three ways: machine sales, maintenance and service contracts, and disposables. Mazor uses the “Razor-Razorblade ” strategy. Profit margins on the machines are fair, but they make 85-90% on everything else.
With more than 1 million spinal procedures performed each year, and disposables costing $1500 for each procedure, that’s big money.
In particular, we see opportunities with spinal procedures. But there is a lot more coming in brain procedures. After researching many comparisons of Mazor and Intuitive Surgical, and making many conservative projections, we believe Mazor has great possibilities.
As a stand-alone enterprise, the company is presently only $26 million in revenues but with $3.4 billion in business potential. This is huge by any standard.
Another possible outcome is that medical giant Medtronic (MDT), with a $118 billion market cap, or Intuitive Surgical could gobble them up at a big premium.
Over the past 15 years, Intuitive Surgical has gone from $11 to $642. Is Mazor the next Intuitive Surgical?
Only time will tell, but we want to be around to watch this baby grow. With a market cap of only $340 million we believe we have found a winner.
By Todd Shaver, Editor of The Bull Market Report