MAKO Surgical Corp. (MAKO): Set to Outperform !

Another peer, Intuitive Surgical reported impressive quarterly revenue growth of 23% and operating income growth of 24%, but its shares have still been beaten down by the street. In my opinion, the fear of its unsustainable growth rate is unwarranted, as the company is no longer dependant on prostate cancer related procedures. Its da Vinci system sales were up by 15.1% YoY, and the trend is expected to continue, as its customers can exchange their older da Vinci models (1^st and  2^nd generation) for the 3^rd generation system with a marginal premium.

The Foolish conclusion

US robotic surgeries in 2013 are expected to rise significantly, which presents a bullish case for the entire industry. In my opinion, the mentioned companies with their respective catalysts and impressive set of financial metrics will outperform. Stryker Corporation, Intuitive Surgical and Mako Surgical, all three operate with little or no debt, along with hefty margins. In my opininion, investors should spread their risks and rewards, by having all three companies in their portfolio, with a collective 5 year EPS growth estimate of 17.52%.

The article Set to Outperform ! originally appeared on Fool.com and is written by Piyush Arora.

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