The Long Term Investor

Man, I am virtually only here to follow this thread a bit. I have a busy day job and life with a youngin running around but I like to pop in and get good info from here in one spot. I don’t really have much to offer and post, but I like to follow. Hope the site survives but if not, I’ll touch in on this other site.

thanks for all you provide, along with the handful of others!

 

Thanks for dropping in Blake. I agree. It is a nice place to even read along when life is busy. Hopefully, we all can continue for a long time.

 

Yes, ATH’s are getting to be a habit….a good habit of course. I will be greedy and hope we surpass your prediction

 

I was wondering why there was an extreme lull in the general activity lately. First Tom moving on, and now this. We'll see what happens, but I made an account over at stocksforums just in case. Wherever the members of this thread go, I go.

 

An investment I am considering to add to my USA portfolio. I pick up this analysis Im sharing here. Seems pritty well built.
Have a great weekend.

Intuitive Surgical (ISRG)

Introduction
Intuitive Surgical is a company specialising in the development of robotic systems for minimally invasive surgery. Its main product is the da Vinci Surgical System, which allows surgeons to operate with greater precision using remotely controlled robotic instruments, reducing the size of incisions and potentially improving patient recovery. The company recently developed the Ion endoluminal system, which allows biopsies to be performed on hard-to-reach parts of the lungs. It also supplies the specialised instruments used in each procedure, accessories, maintenance, support, surgeon training, etc.
Over the past 24 years, 29,000 scientific articles have been published on ISRG systems, with more than 18,000 on Da Vinci.

The Da Vinci 5 system was recently launched for use in endoscopic, abdominopelvic, and thoracoscopic procedures. The SP SureForm 45 stapler for use with the Da Vinci SP (single-port) system in thoracic, colorectal, and urological procedures has been approved by the FDA.

MOAT
Intuitive Surgical has a very strong moat, 9/10 according to GuruFocus (the highest I know of). ISRG has hundreds of patents that prevent direct competitors from entering this market. The cost of replacing robots would be extremely high, but even if this were possible, surgeons and clinical teams would need to be retrained on new equipment, losing the experience they have gained with Da Vinci. There are more than 60,000 surgeons trained in Da Vinci robots. There is also a network effect, a barrier of scientific credibility with more than 18,000 scientific articles published on the Da Vinci system, and regulatory barriers. In some markets, Da Vinci systems are the only ones approved.

Market / TAM
ISRG's potential market is enormous. In the US, only 30% to 50% of hospitals have surgical robots. In Portugal, there are 16 da Vinci systems. This means that the number of hospitals that could potentially install new systems is enormous. Hospitals in emerging countries will also acquire these types of systems as they gain the financial capacity to do so. In addition, 70% of revenues come from system maintenance and the sale of instruments necessary for the system to function, which in itself guarantees a recurring revenue stream.

Financial indicators
The revenue growth rate for the next three years is approximately 15% per annum, which is quite good for a company of this size. The net margin is quite high, at around 28.5%. ROE is 16% and ROIC is 14.1% according to the most recent data, showing a slight upward trend over the last few years. The company has no debt and has $5.33 billion in cash ($5.33 B in the US). From a financial point of view, there is nothing to point out.

Price
As expected, the company trades at high multiples, with a trailing GAAP P/E ratio of 62.7 and an EV/Sales ratio of 17.1. These figures are high, although not extraordinarily so. The consensus price among analysts is around $600. If this target price is confirmed, the shares (currently at £450) would appreciate by approximately 33% over the next 12 months. The consensus recommendation from analysts is a moderate buy.

Conclusion - Suggested strategy
I see this company as a low-risk investment in the long term. In hospitals where its systems are installed, it is extremely unlikely that they will be replaced. These customers guarantee high recurring revenues from the outset. In new hospitals that want to install surgical robots, ISRG has a major advantage in quality and recognition over its still relatively incipient or non-existent competition. In addition, with $5.33 billion in cash, the company has plenty of room for manoeuvre.

Over the last 10 years, the share price has grown fairly steadily. In the last 12 months, the share price reached $600 and has now corrected to $450. If we assume that in the next 12 months the share price could return to $600, this would mean a 33% increase in value. The possibility of a 33% increase in value for a fairly stable company represents a favourable balance between risk and potential return.

Given that the share price is at its lowest level in the last 12 months, that it is a low-risk company in the long term and that it offers a favourable balance between risk and potential return for a one-year period, in my opinion it is justified to open a position at around $450. If the share price falls to around $400, then strengthen the position more substantially. This scenario does not seem likely to me, but it is always worth considering.

 

Yes, it has been kind of odd.

I may get an outright ban for this post....who knows.

I've been thinking since this first came out. I really don't like the way this has been handled. Yes, I realize this is the internet and a posting site in the social media age where things come and go. It is totally different than person to person conversations and etiquette. I guess I am old fashioned in that sense and should not expect that in this type of setting.

We have all noticed a few oddities here over a period of time and maybe more so now that this has come about. First, I don't like rumors. They are usually started for a reason and it's not always good. They usually have some sort of motivation behind them and lead to more. It also further fuels unverified speculation until it takes on a life of its own, basically creating it's own wind.

We have been told, sort of, that the site owner is "throwing in the towel." Then it has also been mentioned it is "total speculation." We are also offered another site, which I guess we are appreciative of having that option. Something seems off about some of this. Now, that may only "seem" that way because of the way this has been handled.

I mean it shouldn't take much time or effort for a site owner to come on and post an advisement of what the future may hold. Something simple. Maybe a set number of day's or even some sort of update to inform the members. This would eliminate a lot of speculation. Who knows, maybe they plan to do so once they have a plan. I can't help but think they are aware of the posters here discussing the issue and getting somewhat antsy over the deal. A little public service announcement might go a long way in diffusing the speculation.

As I said above.....I guess I am too old fashioned and out of step with these things. After all, it is an internet forum. So be it, I still do not like the way this has come around. I don't think it is too much to ask for some clarification and dispose of the speculation.

I notice some of the members have registered on the other site as a back-up. I have the information as well and have looked around a bit over there. I have not registered as of yet. I am going to have to think about it and look around some more. I'm not there yet on a decision.

 

100% agree. Without confirmation one way or the other, it's all speculation.

All I know is if this place sticks around, I will as well. If it is not meant to be, I will go where the members of this thread go. The information posted here is more applicable and valuable to me than 99% of what's posted anywhere else online. I have direct control over my finances, I cannot say the same about the shitshow that is our government and it's actions.

 

Double thread post:

I would very much like it if this thread could be archived and (if possible) ported over to any new site that the members here become a part of. It is too valuable to potentially lose.

In any case, I hope the right people see this and confirm what is being said one way or another.

 

Back to investing. We have had a very nice gain since the lows in April. Most are sitting good on the YTD returns.

Moving on to the final few months of the year. Hopefully we keep pushing forward.

 

Gil once in a while is absent from here. No news here. Cy, real name of bigbear, trying to promote for ages an alternative site. I think this new stockforum is his third try.
It is a bad shot.
Sites like this had their golden age 15-20 years ago. Now truly dinossaurs.
New generations prefer reddit, stocktwits, x etc etc.
I belong to the goup that used stockaholics predecessor, hotstockmarket back then. Cy initial try was back there.
Nothing new here, truly.
I believe Gil will get back in a few days. Possibly he is visiting his homecountry for some time.

 

Thanks. Im waiting to cash in some money I made to aply it there and in another idea I will explain on a few days.

 

Hey Rui,

I just want to correct a few things here that you said because they’re actually inaccurate.

1 - Gil isn’t “visiting his home country for a while” as you say. How I know this is because I am actually chatting with him privately via phone texts over the past week. He has other bigger fish to fry than this forum. He runs an incredibly active gaming site which has been hoarding all of his time. Hence his lack of time for this site anymore.

2 - I’m really genuinely concerned for future of this community. I’ve been apart of this place longer than you. Fwiw, next year will mark my 20-year anniversary being a member at HSM/Stockaholics. Hence, I’d really hate to see this community disband if something like the site going offline were to happen. Having contingency plans in place isn’t a bad idea. I apologize if it seemed like I had other intentions. I really did not. I just want to make sure this core group of posters stays locked in for many more years to come. Whether it continues to be here at Stockaholics or elsewhere. That’s really all.

Right now I’m trying to see if we resurrect what is left with the community here. Hence why I’m speaking to Gil about possibly merging communities with the alternative site. It unfortunately appears like it is not possible for us to move Stockaholics as a view-only archiving site due to the size of the database has become a bit too large. It’s over 10 years old now.

Once I learn more about what will happen here I’d be sure to pass it along here too. I just wouldn’t want to be premature in denying something that isn’t accurate.

The updates have been a bit infrequent though because of Gil bring so busy lately. Hopefully I’ll get to the bottom of everything soon enough.

I think for now we can assume that this board will remain online (hopefully) but having safeguards in place such as an alternate site is not a terrible thing to have because if this site did actually go dark one day it will be too late turn and will be fully regretting not acting when we did.

Anyway, sorry to disrupt the discussions here! Yes, please get back to discussing investing and the markets. Take care.

 

Cy....the shortest distance between two dots is a straight line...
No need to merge shit. The other forum has no traffic, this one has a fraction of what used to be.
Just buy this one from Gil! Keep it simple.
Regards, hoping you're fine.

 

If he has time to text you, he has time to post here and let us know his intentions, whatever they are. Not a single person on Earth is too busy for that. That is not to say you have anything other than pure intentions. I am just stating facts.

 

Interesting . I have heard some of you mention the older sites at times. I wasn’t around on those previous sites.

Good point on the newer generations using other platforms. Makes sense, now that you mention it.

 

Good point as well.

 

I agree with all of that road. However he is extremely occupied with his gaming site nowadays. Like I said before — he’s got bigger fish to fry than this forum.

I agree though that it would be very reassuring and would cancel out all speculation and fears people might have about the future of this site going forward if he popped in here and posted his intentions for this community.

If he genuinely does not have the time to cater for this community any longer then he should allow someone else to take it on. I’m more than willing to be that person, as I am the longest and oldest running tenured member of his community.

I think Rui might be onto something there when said “just buy this from Gil” might be headed in that direction.

Hang tight though because the updates have been infrequent due to how busy Gil has been lately. Hopefully either he posts here (best possible outcome) or he passes things along to me to pass along to you all here.