Aside from having innovative technology, intuitive surgical is a great company to work for. They really care about their employees. They’re constantly growing, constantly building and have such a huge advantage in robotic surgery. They continued to developed new buildings even through COVID and are always hiring. Employees also have ESPP. Definitely a good buy for long term hold
Hello I recently found your TH-cam channel and find it very informative. I watched one of your videos where you briefly discussed skywater technolgoies. I did some more digging on the company and it seems like an incredibly smart business model with their technology as a service component partnered with manufacturing I can see high margins relative to the overall market and the CEO has even discussed that. Their P/S ratio is 1.7, well below the roughly 4.4 industry average, the stock seems undervalued in my opinion. They are also paying off their debt relatively fast and their strategic placements of fabs /partnerships with universities is such a good idea I can see innovative ideas as well as potential discounted labour with internships in the area. I can go on and on. I would love to see you guys do more of a deep dive into the tech aspect and get your bear/bill cases. Great content and thanks for informing me about the topic! I recently got my computer engineering degree and I find this stuff so fascinating!
Hi there! We will likely do a SKYT update after earnings. They have some interesting things going on, and it could indeed be cheap long term if they keep making progress on profitability. We are still unsure just how unique the biz model is, though. The semi industry has always been a collaborative one, and increasingly so as capital intensity goes up. But we shall see. Perhaps SKYT is on to something special. We let small startups like this prove their worth over time. Thank you for watching!
A lot of great healthcare tech stocks out there. BSX is not one we own, and we don't follow it. It is very well diversified and growing, but could use some work to raise profit margins. That's just a very high level take.
I just stumbled onto this channel and as an accountant I think you guys do a better job explaining businesses than have of the buy and sell side analysts. Can you do an episode on Crispr technologies and why people tout it as a game changer?
Hey Big mountain, thanks for the kind words! Would love your feedback on the accounting talk in the latest Wolfspeed video. As for CRISPR, that's not one we keep close tabs on, but Kasey might be interested in doing some deep digging into it.
@@chipstockinvestor I didn’t watch it in full but I think you are referring to start up costs. I guess a few comments on that: 1. The bonus of it previously going to the p&l is you don’t need to contend with amortization of a factory asset over a number of years and whether you want to add that back to your adjusted ebitda valuation 2. If you invest in any mfg company you have to contend with over and under utilization 3. At least they are guiding/telling you why margin will be down. If they were less up front you may conclude that they are less efficient and that they can’t produce inventory that can compete with other players 4. You will have to conclude on whether to add these back when do you do your valuation if they are only short term 5. I haven’t been in mfg in a few years but what they are taking about is effectively standard cost vs actual cost. For standard cost they will run programs every month to see how many widgets they produced against expected labour for that item and raw materials. Then they will run the same program for actuals. If there are variances good or bad companies may have policies to capitalize that to inventory and amortize over a turn. As an example let’s say your standard costs tell you it should have cost 100 to do a run but actual costs after looking at production time and cost was 120. You have a 20 variance which was attributed to that inventory. If you did nothing it would hit your margin right away which may not be correct if the inventory is still on your books. In this instance you may absorb/capitalize to inventory and amortize over a turn or if you are more sophisticated as that inventory gets sold 5. What they are telling you is the underutilization is not due to production and labor variances but that they are not ramped up. As long as they provide disclosure on how long this will take, if as an investor you were able to stomach the 200m of start up costs over the past several years to the p&l I would think you would look past this as well.
@@chipstockinvestor yes! As a result of your last month of videos, I have a preliminary understanding of the space and and just beginning to get the business models.
@@akbar77 great glad to hear it! We made this video when we released the flow chart early this year, give it a look. th-cam.com/video/t8WPGq_wyWs/w-d-xo.html
Hi Nick, who are the competitors for this (may be in China or Europe)? Wondering why ISRG is runaway success while Philips and other legacy healthcare instrument providers (Siemens) don't get mentioned? I have very minimal holding in this and like the segment they operate in but I had similar feelings about biomedical and genetics stocks such as illumina. How can I differentiate ISRG is not in similar euphoria as Illumina? If I say "Its different this time", I think Mark Howard would say these are the riskiest words..
Hi Titan, ISRG's prime competitors are Johnson and Johnson and Medtronic, both of which have small segments trying to replicate what ISRG has done. ISRG is a more than 20 year story in the making. They were laser focused on getting one product to market, and pioneered robotic assist surgery. They have a decades long head start. Competitors can't simply decide to just enter this industry. It takes great technology, and a ton of time. As for the "it's different this time" phrase, this has become a cliche. It requires a nuanced discussion. All we can say is Illumina is not ISRG. It's a totally different biz and biz model. Illumina is also a much younger company than ISRG, and barely turns a profit. Over the longer-term, though, Illumina has been a pretty great investment. So we might ask Howard Marks, what's your time horizon when stating "it's different this time". Time horizon matters dearly, much more so than valuation. Time first, valuation second.
Thank you for the coverage! I really like these monopolistic-ish companies in relatively small (and unknown, not often in the news) but expanding tech fields. They may never skyrocket like NVIDIA, but are likely to compound very well in the next decade, which is probably a good thing for investors that like doing DCA and forget about it.
@@chipstockinvestor Thank you Nick, I think if you could, from time to time, keep introducing these dominant companies in relatively small but expanding tech areas, that would hugely helpful! I learned so much from your videos and really expanded my knowledge. These companies really make me quite comfortable as an investor.
That's an interesting one we haven't followed before. Smaller ETF, but solid track record! Looks like Abbott (ABT), ISRG, and Medtronic (MDT) make up nearly 40% of the portfolio. Do you own this one?
@@chipstockinvestor I don't, but I recently discovered it and am intrigued. The price is down this year, so it may be a good time to open a position. Your channel has quickly become one of my favorites. Thank you for all the clear, well-researched analysis you offer. I love how you ground your insights into historical trends. Last question! I'm a bit intimidated by choosing individual semi-conductor stocks. Do you think SOXX is a good alternative?
@@johnrogers9065 SOXX and SMH are both going to offer similar performance over the long term. Check their portfolios on each respective website. They are heavily slanted towards the mega and large cap semis, but both offer that diversification you're probably after. Thanks again for watching, happy we can add value!
I personally think this is the apple health care stock. Brilliwnt moat with recurring revenue. I bought some recently despite the high price. Hopefully it continues to fall so I can buy more
We like that comparison! It really is a wonderful company, just also has that wonderful price, as you say. Looks like it could fall further. Thanks for watching! Update coming early this week.
I know its not isrg, but I truly believe asxc, and their Luna system will take market share from isrg in chunks. Ive also been hearing about the frustration due to the OBLIGATION to replace tools once used unlike the multi use tools w asxc.
@chipstockinvestor isrg's lack of haptic feedback, build up of procedural database. ASXC's unit is more advanced and based on white papers that have come out, their per cost procedure is better while collecting and applying past procedural learnings on the current procedure. The data base flywheel is in full effect, especially now that from what I've gathered a leading med has signed to get and teach asxc systems.
Thanks, as a feedback, I like much better the shorter video format 10-20min like this one (ISRG) for reviewing companies earnings. On the other hand, great lesson about valuation! Thanks
Thanks, we'll mix in different video lengths based on the research we have on hand and what we find relevant to share. Others like longer podcast style formats. We'll try to be accommodative when possible.
Awesome. At first I thought the title ‘50 years’ was clickbait. I understand a bit of click bait is needed for Views for the hard work you put in. No harm.That being said, no one can say a company can exist for 50 years. May be there will better humaniid robots in 50 years and isrg machines may be legacy like kodak. Companies are like empires, they ultimately fall over long periods of time.
Thank you for commenting! We had no intention of generating click bait. Indeed, it's impossible to say if a company will last for 50 years. However, businesses that deeply ingrain themselves in an industry can last hundreds of years, and their IP can outlive the organization themselves and continue to evolve. Take a look at the top 50 stocks in the Vanguard Healthcare ETF (VHT). You'll find companies decades, even hundreds, of years old or with roots that go back centuries are quite common.
Thanks for the video! About selling too soon, I've heard of research claiming that on average fund managers outperform when they buy, but underperform when they sell. I know I'm no better, so I usually don't sell all of a stock except over several years maybe. Definitely if it's about valuation, but I'll sell the lot if I learn that management sucks. There's no free lunch in it, and you can wish you'd sold the lot or end up holding more stocks than anyone would approve of.
@@chipstockinvestor Been there! Years ago I sold a stock in bioprocessing equipment when the price took the PE over 60, which seemed way high at the time. It was soon obvious it was a bad decision. Lately I sold half my Nvidia stock just before the price gapped up on guidance, an even worse decision, but at least I didn't sell the lot.
@@riffsoffov9291 same here, we sold a very small chunk (but still a little) of Nvidia, done of the new position we bought last year when it was down. Dumb. Still our biggest position by far though. If we've locked in a favorable cost basis, selling often isn't a great move if the biz is still high quality and thesis still in play.
I'd love to own this company but I can't get myself to buy something with a valuation like that. Taking Buffett's approach on this one and will watch the pitch go by as there are no called strikes.
We are on the other side of mid-thirty's 🤣 and I started working as a nurse when I was 20. Before that, I started working in the hospital in other capacities when I was 14! Child labor laws couldn't stop me from fulfilling my dream! 😅
Aside from having innovative technology, intuitive surgical is a great company to work for. They really care about their employees. They’re constantly growing, constantly building and have such a huge advantage in robotic surgery. They continued to developed new buildings even through COVID and are always hiring. Employees also have ESPP. Definitely a good buy for long term hold
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☕☕☕If you feel so inclined please show your support here by fueling our caffeine addiction 👇
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Aside from having innovative technology, intuitive surgical is a great company to work for. They really care about their employees. They’re constantly growing, constantly building and have such a huge advantage in robotic surgery. They continued to developed new buildings even through COVID and are always hiring. Employees also have ESPP. Definitely a good buy for long term hold
Hello I recently found your TH-cam channel and find it very informative. I watched one of your videos where you briefly discussed skywater technolgoies. I did some more digging on the company and it seems like an incredibly smart business model with their technology as a service component partnered with manufacturing I can see high margins relative to the overall market and the CEO has even discussed that. Their P/S ratio is 1.7, well below the roughly 4.4 industry average, the stock seems undervalued in my opinion. They are also paying off their debt relatively fast and their strategic placements of fabs /partnerships with universities is such a good idea I can see innovative ideas as well as potential discounted labour with internships in the area. I can go on and on. I would love to see you guys do more of a deep dive into the tech aspect and get your bear/bill cases. Great content and thanks for informing me about the topic! I recently got my computer engineering degree and I find this stuff so fascinating!
Hi there!
We will likely do a SKYT update after earnings. They have some interesting things going on, and it could indeed be cheap long term if they keep making progress on profitability.
We are still unsure just how unique the biz model is, though. The semi industry has always been a collaborative one, and increasingly so as capital intensity goes up. But we shall see. Perhaps SKYT is on to something special. We let small startups like this prove their worth over time.
Thank you for watching!
Good news for ISRG released Tuesday, Jan 9, 2024, compelled me to review this interesting video.
It really was, Kasey keeps saying, just keep DCAing more ISRG!
Fantastic video thank you. Great to hear your conviction and the rationale behind it.
Glad you enjoyed it!
Great insight,What you guys think about BSX?
A lot of great healthcare tech stocks out there. BSX is not one we own, and we don't follow it. It is very well diversified and growing, but could use some work to raise profit margins. That's just a very high level take.
thanks for your content!
can you make a podcast about - "Ultra Ethernet Consortium" ? what does it mean?
We can add it to our queue. Is there something in particular about this group of companies you want to know about?
I just stumbled onto this channel and as an accountant I think you guys do a better job explaining businesses than have of the buy and sell side analysts. Can you do an episode on Crispr technologies and why people tout it as a game changer?
Hey Big mountain, thanks for the kind words! Would love your feedback on the accounting talk in the latest Wolfspeed video.
As for CRISPR, that's not one we keep close tabs on, but Kasey might be interested in doing some deep digging into it.
@@chipstockinvestor I didn’t watch it in full but I think you are referring to start up costs. I guess a few comments on that:
1. The bonus of it previously going to the p&l is you don’t need to contend with amortization of a factory asset over a number of years and whether you want to add that back to your adjusted ebitda valuation
2. If you invest in any mfg company you have to contend with over and under utilization
3. At least they are guiding/telling you why margin will be down. If they were less up front you may conclude that they are less efficient and that they can’t produce inventory that can compete with other players
4. You will have to conclude on whether to add these back when do you do your valuation if they are only short term
5. I haven’t been in mfg in a few years but what they are taking about is effectively standard cost vs actual cost. For standard cost they will run programs every month to see how many widgets they produced against expected labour for that item and raw materials. Then they will run the same program for actuals. If there are variances good or bad companies may have policies to capitalize that to inventory and amortize over a turn. As an example let’s say your standard costs tell you it should have cost 100 to do a run but actual costs after looking at production time and cost was 120. You have a 20 variance which was attributed to that inventory. If you did nothing it would hit your margin right away which may not be correct if the inventory is still on your books. In this instance you may absorb/capitalize to inventory and amortize over a turn or if you are more sophisticated as that inventory gets sold
5. What they are telling you is the underutilization is not due to production and labor variances but that they are not ramped up. As long as they provide disclosure on how long this will take, if as an investor you were able to stomach the 200m of start up costs over the past several years to the p&l I would think you would look past this as well.
thank you both SO much for the fabulous education you provide. Can we have an episode on that insanely good map?!
Thank you for watching!
Do you mean the semiconductor industry flow chart?
@@chipstockinvestor yes! As a result of your last month of videos, I have a preliminary understanding of the space and and just beginning to get the business models.
@@akbar77 great glad to hear it!
We made this video when we released the flow chart early this year, give it a look.
th-cam.com/video/t8WPGq_wyWs/w-d-xo.html
Hi Nick, who are the competitors for this (may be in China or Europe)? Wondering why ISRG is runaway success while Philips and other legacy healthcare instrument providers (Siemens) don't get mentioned? I have very minimal holding in this and like the segment they operate in but I had similar feelings about biomedical and genetics stocks such as illumina. How can I differentiate ISRG is not in similar euphoria as Illumina? If I say "Its different this time", I think Mark Howard would say these are the riskiest words..
Hi Titan, ISRG's prime competitors are Johnson and Johnson and Medtronic, both of which have small segments trying to replicate what ISRG has done. ISRG is a more than 20 year story in the making. They were laser focused on getting one product to market, and pioneered robotic assist surgery. They have a decades long head start. Competitors can't simply decide to just enter this industry. It takes great technology, and a ton of time.
As for the "it's different this time" phrase, this has become a cliche. It requires a nuanced discussion. All we can say is Illumina is not ISRG. It's a totally different biz and biz model. Illumina is also a much younger company than ISRG, and barely turns a profit. Over the longer-term, though, Illumina has been a pretty great investment. So we might ask Howard Marks, what's your time horizon when stating "it's different this time". Time horizon matters dearly, much more so than valuation. Time first, valuation second.
@@chipstockinvestor I work at ISRG, i agree with your assessment.. =D.
Thank you for the coverage! I really like these monopolistic-ish companies in relatively small (and unknown, not often in the news) but expanding tech fields. They may never skyrocket like NVIDIA, but are likely to compound very well in the next decade, which is probably a good thing for investors that like doing DCA and forget about it.
That's how we think of this one too. But a little and forget about it!
@@chipstockinvestor Thank you Nick, I think if you could, from time to time, keep introducing these dominant companies in relatively small but expanding tech areas, that would hugely helpful! I learned so much from your videos and really expanded my knowledge. These companies really make me quite comfortable as an investor.
One of my biggest holdings too
It's a great one!
Would love to hear your thoughts on the IHI ETF
That's an interesting one we haven't followed before. Smaller ETF, but solid track record! Looks like Abbott (ABT), ISRG, and Medtronic (MDT) make up nearly 40% of the portfolio. Do you own this one?
@@chipstockinvestor I don't, but I recently discovered it and am intrigued. The price is down this year, so it may be a good time to open a position.
Your channel has quickly become one of my favorites. Thank you for all the clear, well-researched analysis you offer. I love how you ground your insights into historical trends.
Last question! I'm a bit intimidated by choosing individual semi-conductor stocks. Do you think SOXX is a good alternative?
@@johnrogers9065 SOXX and SMH are both going to offer similar performance over the long term. Check their portfolios on each respective website. They are heavily slanted towards the mega and large cap semis, but both offer that diversification you're probably after.
Thanks again for watching, happy we can add value!
When Kasey said she’d let the viewers decide, I thought your relationship was headed for a vote. 😮💨 I did not want to have to vote on that! 😂
😅
What about Asensus Surgical? I would keep that also for 5-10 years...
Isn't it still pre-revenue at this point? Think they've suffered some regulatory setbacks.
Maybe. There is hope until its not. Intuitive was also penny stock...@@chipstockinvestor
We've all done it, hindsight is the best teacher.
Sad but true! It's ok, it's a lesson well learned.
Stocks are not a hindsight exercise.
You both are amazing ❤❤
Why thanks! Kasey is pretty great!
@@chipstockinvestor yes indeed
I personally think this is the apple health care stock. Brilliwnt moat with recurring revenue. I bought some recently despite the high price. Hopefully it continues to fall so I can buy more
We like that comparison! It really is a wonderful company, just also has that wonderful price, as you say. Looks like it could fall further. Thanks for watching! Update coming early this week.
great video!!
Thanks David!!
I know its not isrg, but I truly believe asxc, and their Luna system will take market share from isrg in chunks. Ive also been hearing about the frustration due to the OBLIGATION to replace tools once used unlike the multi use tools w asxc.
What makes you think so?
I thought this too.... 😢
@chipstockinvestor isrg's lack of haptic feedback, build up of procedural database. ASXC's unit is more advanced and based on white papers that have come out, their per cost procedure is better while collecting and applying past procedural learnings on the current procedure. The data base flywheel is in full effect, especially now that from what I've gathered a leading med has signed to get and teach asxc systems.
@@frenchyalicea649go where the surgeons are going. They are at ISRG and if ISRG implements further AI = the lead will become greater
Love your channel. In tech stocks. Holding for 50 years ? Lol.
What about INMD? You might find it as another and better healthcare wonder
That's a good one too, albeit a very different biz than ISRG. It's been a while since we've taken a look.
It’s a good idea to have two brokerage accounts. One you look at daily and one you put in forever stocks and leave alone.
This is a strategy that works well for what some investors want to accomplish
Thanks, as a feedback, I like much better the shorter video format 10-20min like this one (ISRG) for reviewing companies earnings. On the other hand, great lesson about valuation! Thanks
Thanks, we'll mix in different video lengths based on the research we have on hand and what we find relevant to share. Others like longer podcast style formats. We'll try to be accommodative when possible.
Awesome. At first I thought the title ‘50 years’ was clickbait. I understand a bit of click bait is needed for Views for the hard work you put in. No harm.That being said, no one can say a company can exist for 50 years. May be there will better humaniid robots in 50 years and isrg machines may be legacy like kodak. Companies are like empires, they ultimately fall over long periods of time.
Thank you for commenting!
We had no intention of generating click bait. Indeed, it's impossible to say if a company will last for 50 years.
However, businesses that deeply ingrain themselves in an industry can last hundreds of years, and their IP can outlive the organization themselves and continue to evolve. Take a look at the top 50 stocks in the Vanguard Healthcare ETF (VHT). You'll find companies decades, even hundreds, of years old or with roots that go back centuries are quite common.
Lease is also tax deductible over time rather than a big one off cost
Also another perk
Thanks for the video! About selling too soon, I've heard of research claiming that on average fund managers outperform when they buy, but underperform when they sell. I know I'm no better, so I usually don't sell all of a stock except over several years maybe. Definitely if it's about valuation, but I'll sell the lot if I learn that management sucks. There's no free lunch in it, and you can wish you'd sold the lot or end up holding more stocks than anyone would approve of.
I believe this to be true. Nick has thought Apple was trading at a premium for years, but here we are today. Would have been a losing trade to sell
Thank you for watching and commenting as well, Riffs!
@@chipstockinvestor Been there! Years ago I sold a stock in bioprocessing equipment when the price took the PE over 60, which seemed way high at the time. It was soon obvious it was a bad decision. Lately I sold half my Nvidia stock just before the price gapped up on guidance, an even worse decision, but at least I didn't sell the lot.
@@riffsoffov9291 same here, we sold a very small chunk (but still a little) of Nvidia, done of the new position we bought last year when it was down. Dumb. Still our biggest position by far though. If we've locked in a favorable cost basis, selling often isn't a great move if the biz is still high quality and thesis still in play.
BTW I've bought losers as well, some of them very daft, with hindsight, that I'd get no sympathy for.
👍🏼
Their share comp to fcf is above 50%
Yes that could be a risk
I'd love to own this company but I can't get myself to buy something with a valuation like that. Taking Buffett's approach on this one and will watch the pitch go by as there are no called strikes.
Patience is a virtue Danny. If your process leads you to say no, that's totally fine!
ISRG is extremely overpriced now. Let it drop before buying.
Thanks for commenting
Primero
woo hoo! fast trigger fingers!
Hold 50 years hahahahahaha 😂 you funny
Buy and hold for 50 years?! That way both of you can celebrate in your walkers or wheelchairs 😂 Come on now…
Kasey spent close to two decades in the medical field but you're both in your mid 30s? There are child labor laws that cover that, aren't there?
We are on the other side of mid-thirty's 🤣 and I started working as a nurse when I was 20. Before that, I started working in the hospital in other capacities when I was 14! Child labor laws couldn't stop me from fulfilling my dream! 😅
Aside from having innovative technology, intuitive surgical is a great company to work for. They really care about their employees. They’re constantly growing, constantly building and have such a huge advantage in robotic surgery. They continued to developed new buildings even through COVID and are always hiring. Employees also have ESPP. Definitely a good buy for long term hold
That is really great to hear that Intuitive Surgical treats their employees well. That makes me even more confident! ~Kasey