The robots are coming. Don’t be afraid. These machines are changing medicine for the better — one hip and knee replacement at a time, asserts growth stock expert Jon Markman, editor of Pivotal Point.

Stryker Corp. (SYK) used to fly under the radar. The Michigan-based company had a good business making orthopedics, medical instruments and supplies. Then managers pushed into robotics. Business took off.

It’s no surprise. Stryker is onto something big. As it always has been. It has a long history of creating revolutionary tools in the healthcare market.

A series of forward-looking acquisitions made Stryker a major player in orthopedic implants, medical devices, surgical products and neurotechnology. Revenues ballooned to $7.3 billion.

The buyouts gave Stryker vertical integration in orthopedics. The company made the implants, developed the software and built the hardware surgeons used to install the devices.

The strategy was prescient. Knees and hips are the largest joints in the human body. They support body weight and, as aging Americans are becoming more obese, the number of chronic problems is on the rise.

Meanwhile, the company's Mako robotic systems have been used more than 50,000 times for hip and knee replacements since 2006. The procedure for hip and knee replacement involves a CT scan, a patient specific 3D model, and a pre-plan surgery strategy.

From this data and cameras mounted on the arm, the Mako system maps the procedures. The robot knows exactly where the bone is at every point in time during surgery.

The Mako system gives surgeons the flexibility to customize and fit the implants, then reestablish alignment with high precision. The result is safer surgeries with better outcomes for patients. At Stryker, those better outcomes are leading to market share gains and better utilization rates for its sought-after robots.

In July, the company reported $3.6 billion in sales, a 9.9% increase versus the previous year. And Stryker generated $827 million of free cash flow.

Strong numbers have made the stock are impressive performer. Shares have risen 36.5% in 2019. The stock currently trades at 23.7x for earnings and 5.5x sales. The market capitalization is 79.4 billion.

While these financial metrics may seem expensive, keep in mind that Stryker’s organic growth far exceeds its peers. The company is in a very strong competitive position in a part of the healthcare marketplace far removed trade tensions or domestic political debates. The shares are buyable for growth investors on pullbacks.

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