Rise Of The Machines - Why TransEnterix And Titan Medical Are Strong Buys?
Nov. 2, 2015 10:15 AM ET | Includes: GOOG, ISRG, MZOR, TITXF, TRXC, YAMCF
Disclosure: I am/we are long TRXC, TITXF. (More...)
Summary
Robotic industry compound annual growth rates range from 8% to 25% in personal, industrial, commercial, military and surgical market segments.
Surgical robotics is the most attractive market segment to invest in our opinion. We discuss why.
We discuss four stocks in the robotic surgery: TransEnterix, Titan Medical, Intuitive Surgical and Mazor Robotics.
We discuss if robots could kill 47% of the U.S. jobs within the next two decades as proposed by Martin Ford from Oxford University.
Many of our fellow investors might have seen …show more content…
This is why we are invested in it.
Titan Medical - We Changed Our Rating - Strong Buy
We said in our earlier article that Titan shares might come down from $1.44 level to $1.15-1.20.
We were only partially right since they went to below $1.00. We hit our target range and we bought a long position at $1.15 just when writing this article.
Titan market cap is only $103m. It sounds very low in light of the fundamentals. Let's discuss the positive factors:
30 Oct '15 Titan announced a deal being negotiated with Longtai Medical Inc. This deal might end up being worth of $24m. Titan gives Longtai an exclusivity right to negotiate a deal for SPORT surgical system marketing, sales and distribution in Asia Pacific region. SPORT surgical system sales are expected to start earliest Q4-16 internationally and mid-2017 in the U.S. (pending approvals). We expect SPORT surgical system to be priced at around $1m in comparison to Intuitive's Da Vinci at $1.5-2.3m. Let's not forget that Intuive sales are expected to reach $2.3b in …show more content…
SPORT surgical system (source)
Intuitive Surgical and Mazor Robotics
Intuitive Surgical is the market leading company at the moment with 2015 sales revenue expected to be over $2.3b. Intuitive trades currently at a PE of 34. We would still like to see its price lower before entering.
Mazor Robotics is an Israel-based company with over 140 employees.
Its computerized and imaging-based surgical guidance system called Renaissance focuses on two key markets:
Spinal surgery for thoracic lumbar. There are 360,000 thoracic lumbar operations each year in the US alone. Brain surgery with the same equipment.
Mazor Robotics' Renaissance system has obtained FDA approval and CE-marking. It is being commercialized in the US, Europe, Russia, Far East Asia and Asia Pacific.
We estimated in our prior article that the net present value was $11.54. It trades currently at $10.44 and we hold a bullish 5-year view on it. The current weakness in the share price is due to sales ramp up being slower than expected.
Price Charts
We believe that the high growth years are still ahead of us:
TITXF Chart
TITXF data by YCharts
Figure 7. Robotic companies performance (ycharts.com)
Robotics And A.I. Impact To The Job Market In The
Nov. 2, 2015 10:15 AM ET | Includes: GOOG, ISRG, MZOR, TITXF, TRXC, YAMCF
Disclosure: I am/we are long TRXC, TITXF. (More...)
Summary
Robotic industry compound annual growth rates range from 8% to 25% in personal, industrial, commercial, military and surgical market segments.
Surgical robotics is the most attractive market segment to invest in our opinion. We discuss why.
We discuss four stocks in the robotic surgery: TransEnterix, Titan Medical, Intuitive Surgical and Mazor Robotics.
We discuss if robots could kill 47% of the U.S. jobs within the next two decades as proposed by Martin Ford from Oxford University.
Many of our fellow investors might have seen …show more content…
This is why we are invested in it.
Titan Medical - We Changed Our Rating - Strong Buy
We said in our earlier article that Titan shares might come down from $1.44 level to $1.15-1.20.
We were only partially right since they went to below $1.00. We hit our target range and we bought a long position at $1.15 just when writing this article.
Titan market cap is only $103m. It sounds very low in light of the fundamentals. Let's discuss the positive factors:
30 Oct '15 Titan announced a deal being negotiated with Longtai Medical Inc. This deal might end up being worth of $24m. Titan gives Longtai an exclusivity right to negotiate a deal for SPORT surgical system marketing, sales and distribution in Asia Pacific region. SPORT surgical system sales are expected to start earliest Q4-16 internationally and mid-2017 in the U.S. (pending approvals). We expect SPORT surgical system to be priced at around $1m in comparison to Intuitive's Da Vinci at $1.5-2.3m. Let's not forget that Intuive sales are expected to reach $2.3b in …show more content…
SPORT surgical system (source)
Intuitive Surgical and Mazor Robotics
Intuitive Surgical is the market leading company at the moment with 2015 sales revenue expected to be over $2.3b. Intuitive trades currently at a PE of 34. We would still like to see its price lower before entering.
Mazor Robotics is an Israel-based company with over 140 employees.
Its computerized and imaging-based surgical guidance system called Renaissance focuses on two key markets:
Spinal surgery for thoracic lumbar. There are 360,000 thoracic lumbar operations each year in the US alone. Brain surgery with the same equipment.
Mazor Robotics' Renaissance system has obtained FDA approval and CE-marking. It is being commercialized in the US, Europe, Russia, Far East Asia and Asia Pacific.
We estimated in our prior article that the net present value was $11.54. It trades currently at $10.44 and we hold a bullish 5-year view on it. The current weakness in the share price is due to sales ramp up being slower than expected.
Price Charts
We believe that the high growth years are still ahead of us:
TITXF Chart
TITXF data by YCharts
Figure 7. Robotic companies performance (ycharts.com)
Robotics And A.I. Impact To The Job Market In The