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Mazor Robotics: The Next Intuitive Surgical

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Conventional wisdom in choppy markets is to avoid high valuation stocks. The volatility will give you nightmares. If properly prepared, volatility can also give you opportunity.

In a correction good young companies often see the price of their equity fall more than average. This is what successful investors look for in the overall strategy.  Let me give you an example.

Start with a long time favorite in the healthcare field: Intuitive Surgical (ISRG:NASDAQ).  I ran across ISRG in April 2008.  Wow that was right in the middle of the financial crisis when Bear Stearns was going out: volatile times back then.  

Intuitive Surgical  are the guys that pioneered robotic surgery.  Their Di Vinci surgical suite specializes in procedures like prostatectomies and hysterectomies.  

From a patient perspective, Di Vinci offered faster, less invasive and quicker recovery times than conventional surgery.  For physicians it meant being able to offer a better service and a happier customer.  For Intuitive Surgical it meant big upfront revenues on the sale of the equipment and even more continuous income from sale of disposable products consumed during the surgery.  A true win win situation.

Back in 2008 when I discovered ISRG it was selling at nearly 100 times a token level of earnings.  The total market cap was somewhere around $500 million.  To rich for my blood at the time.  After all, it was the middle of the financial crisis.  Not a time to take chances.

Today Intuitive Surgical is worth just over $45 billion.  They are far and away the leader in robotic surgery.  The lesson: if there is a long term investment thesis, even a major financial crisis is a short term hurdle.

Along Comes Mazor Robotics For Spinal Surgery

Mazor Robotics (MZOR:NASDAQ) created the Renaissance Robotic Surgical System.   This dramatically simplifies the very nature of spinal surgery.  The system is 98%-99% accurate, reduces complications by more than two-thirds and reduces exposure to harmful radiation by 35%-50%.  Finally, it reduces recovery time and that makes for happy patients.  When it comes to alleviating back pain a satisfied customer is a walking endorsement for the Renaissance System.

Promising Agreement with Medtronic

The fun got started back in 2016 when Mazor signed a marketing and distribution agreement with Medtronic (MDT:NYSE) that represented a breakthrough for the Renaissance System.  Mazor is an Israeli company strong on technology but weak in global distribution.

The selling and distribution of surgical suites like Renaissance is long and involves entire project teams of medical experts and IT professionals to train hospital physicians and their surgical teams.  Once trained, it practically takes an Act of Congress to force doctors to change their habits.  So the long selling cycle tends to lead to long-term customer relationships.

How Mazor Makes Money

The company makes money from three sources.  The Renaissance Surgical suite sells for about $850,000.  With the sale, Mazor offers maintenance and service under contracts.  This is like annuity income that is highly profitable.  Disposables at a cost of $1,500 per operation are the second most important revenue stream.  The gross profit on these items is over $1,350.

Blade & Razor Business Model

The interesting thing about Mazor’s business model is the disposables business. One only needs to consider the potential 100,000 US procedures and 500,000 worldwide might do for the company. Of course there is a lot of blue sky thinking here.  For example, not every surgical procedure will be appropriate.  Sometime, patient characteristics like obesity etc. preclude the use of various surgical techniques. Also cost and reimbursement issues have to be taken into consideration. Having stated all these caveats the opportunities for Mazor are interesting, so say the least.

Constant Comparisons

Along the way Mazor’s potential will constantly be compared with Intuitive Surgical.

The most recent data shows Da Vinci was used in over 650,000 procedures last year employing 3597 machines.  That works out to one surgery suite for every 180 procedures.  If we use this as a proxy, Mazor will need to sell roundly 2800 Renaissance Systems to service 500,000, and that is just half the global market.

Will Mazor succeed or will something trip them up along the way. On the positive side, it has regulatory approval for use in the United States and most everywhere else in the world. However, the healthcare business is littered with promising companies that flamed out so the risks are there. For all their success, Intuitive Surgical’s path encountered a few bumps.

There are already over 200 systems in place worldwide.  Mazor is starting to catch on. The company expects to report full year 2017 revenues of about $65 million in mid February.  We think near term order backlogs could be a little soft.  If so the stock could be impacted and that is an opportunity to watch for.

Something to remember, Mazor’s current value at about $1.7 billion may sound sizable but Intuitive Surgical is a far more lofty $45+ billion. We are neither doctors nor investment advisors so we won’t give you advice on your aching back or you financial portfolio.  However, we will keep you informed as more information on Mazor becomes available about this technology.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.4 stars on average, based on 114 rated postsJames Waggoner is a veteran Wall Street analyst and hedge fund manager who has spent the past few years researching the fintech possibilities of cryptocurrencies. He has a special passion for writing about the future of crypto.




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Uber: $120 Billion IPO?

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Uber Technologies Inc., the global ride-hailing giant, is reportedly eyeing an initial public offering (IPO) worth as much as $120 billion. According to The Wall Street Journal, the IPO could take place early next year, giving investors ample time to prepare.

More Valuable than the Auto Giants

The $120 billion value proposal was delivered to Uber last month by Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS), two of Wall Street’s largest banks. The banks were presumably advising Uber on how to position stock offerings to potential investors before underwriting the IPO.

The new valuation far exceeds the one Uber received from Toyota Motors Co (TYO), which priced the ride-sharing service at %72 billion.

At $120 billion, Uber would be worth more than the General Motors Co (GM), Ford Motor Co (F) and Fiat Chrysler Automobiles (FCA) combined. The Detroit auto giants have seen their valuations rise in the wake of the financial crisis, buoyed by a prolonged recovery and increased appetite for automobiles. However, their growth has paled in comparison to Uber’s, which was founded in 2009.

Uber’s expansion hasn’t been without growing pains. The company has been mired by regulatory bottlenecks, workplace scandals and the alleged theft of trade secrets from Alphabet Inc. (GOOGL), Google’s parent company.

It is not entirely clear what metrics the Wall Street banks used to evaluate Uber’s potential value. The company reportedly told Morgan Stanley it won’t be profitable for at least another three years, though annual revenues are expected to reach up to $11 billion this year. That’s a marked rise over the $7.78 billion generated in 2017.

While there’s no guarantee that Uber will go public in the proposed timeframe, it must issue a public offering by the end of 2019, according to WSJ sources. That’s the agreement it has in place with investor SoftBank Group Corp.

Uber by the Numbers

Uber’s startling growth over the past nine years can be represented by a few statistics. As of May 8, 2018, the company had 19,000 employees. This doesn’t include the more than 3 million drivers who are getting paid through the ride-hailing service. Since inception, Uber drivers have completed some 10 billion rides. This averages out to about 15 million rides each day. Gross bookings in 2016 alone amounted to $20 billion.

As of June, 75 million riders were using the Uber app. In the U.S. alone, adult users are projected to reach 48 million by the end of 2018. The Uber app is installed on 21% of U.S. adult Android devices.

Currently, Uber owns up to 87% of the U.S. ride-hailing market. The growth and widespread adoption of the service has opened the door to other competitors, with Lyft being the biggest. Founded in 2012, Lyft is available in about 220 cities across the U.S. as well as in major cities across Asia.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 648 rated postsSam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world's foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance. Sam's work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Contact: sam@hacked.com Twitter: @hsbourgi




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Argo Mining as a Means of Diversification

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Buying Bitcoin (or any cryptocurrency) is something we talk about a lot, but earning crypto is just as interesting. There are many ways to earn crypto that allow for arbitrage-like opportunities, but the focus of this piece is on mining companies.

More specifically, Argo Mining, which is the first cryptocurrency mining company to IPO. That might not sound like a big deal, but it gives Argo a critical competitive advantage over other companies.

The Mining Industry

One thing is clear right now, the mining industry is still very opaque. Users are constantly worried about being scammed, which is very similar to how it was when trading exchanges were popping up left and right. There are numerous options out there for companies that will help you mine cryptocurrency, but it isn’t always clear what the best choice is.

You can go one of two routes: have a mining application operate on your computer, or pay for a rented service. Honeyminer is an example of a native application that works well and pays out cryptocurrency, and Argo is an example of a “shared service”. Argo operates much like Amazon Web Services does. You pay to rent computational capabilities, but your goals end up being slightly different. The business models are sound, but very different.

Where Argo’s Advantage Comes From

Argo is the first mining company to IPO, which adds a level of trust that no other company can currently command. There are so many potential risks for users that they tend to shy away from these companies. They are worried about their payment information being ripped off, withdrawal of the coins, and the costs being greater than the revenues.

By raising $32 million in their June 11th IPO, Argo has alleviated many of these worries, and added a degree of trust to their brand. They started off mostly mining altcoins such as Bitcoin Gold, Ethereum, Ethereum Classic, and Zcash, but have recently announced Bitcoin mining packages as well.

The overall goal of Argo, as stated by their CEO, Jonathan Bixbay, is to democratize mining so everyone can participate. Right now, most of the mining is done by a select few of the elites, and Argo is enabling the wealth to be spread here.

Can Argo Actually Make You Money?

The big question to answer about Argo is whether you can actually make money doing this. The costs per month could potentially be higher than the value of the crypto you mine. Sure, you don’t have to pay trading fees on them, but it is important to calculate exactly how much you are coming out ahead.

It depends on the package, but you could potentially end up paying more for the fees than you earn. The trick is to remember that the crypto market isn’t like other markets – it isn’t perfectly efficient – and there are always arbitrage opportunities if you look hard enough.

An Alternate Route to Being Long Crypto

With much of crypto mining currently being done by elites because of the massive investment involved, it is clear that Argo has tapped a massive market. The company had a waitlist of 50,000 in September, and with the funds from the IPO, they can finally finance the expansion of their operations in a way that will speed up the number of people they can bring online.

If you believe Bitcoin (or cryptocurrencies in general) is coming out of a rut soon, then this is a good way to diversify into the market. Do your own tests and make sure that you are coming out ahead after the fees, but it should be a simple way to make some extra money in what is currently an inefficient market.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Ripple Price Analysis: XRP/USD at Risk of September Bull Run Being Completely Deflated

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  • Ripple’s native token XRP is at large danger of totally giving back the big September bull run gains. 
  • XRP/USD is capped to the upside at $0.6000. Vital near-term support seen tracking from $0.4550-0.4350.

Ripple’s native token XRP price has further been sent down to the burning south. This comes after the chunky and excessive bull run observed at the back end of September. XRP/USD had run higher by some 190%, from lows of around $0.27. Bulls managed to see a spike up, just short of $0.8000, within the early $0.7900 territory. Since this initial big trek to the north, up to mentioned highs, the price has dropped around 40%.

September Recap

There was not one catalyst behind the rocket move of around 195% in September for Ripple’s XRP. A few developments are worth recapping. Fintech heavyweight in Japan, SBI Holdings, announced their plans to launch a Ripple-powered mobile payment application known as MoneyTap. Elsewhere, London-based firm TransferGo announced they are using Ripple’s blockchain. This will be to facilitate digital currency transfer from Europe to India.

Furthermore, the litigation between R3 and Ripple Lab announced that they have reached a settlement of all outstanding litigation between the parties.  To top all the above, there was huge anticipation ahead of the xRapid product launch. This is now live, available for commercial use, allowing both individuals and businesses to access instant liquidity and low fees, using Ripple’s XRP. This trumps the traditional process of a 2-3 day wait. A sense of buy on the rumor sell on the fact was definitely observed here.

Technical Review

XRP/USD is on its journey south, looking to completely give back September’s run higher. Starting off with resistance, as can be seen the price upside has been capped at $0.6000. There hasn’t been enough momentum since the exhausted rally, to clear this chunky supply cap. Firm rejections have been observed at the mentioned resistance block since the bull run. If life kicks back into the bulls, they will need to comfortably settle around $0.7500, before then conquering $0.8000. Ripple’ XRP is still a long way away from of reclaiming the big psychological $1.00, with much supply even seen within the early to mid $0.9000 region.

XRP/USD 4-hour chart

Given current downside momentum, near-term support is now eyed from a range of $0.4550-0.4350. This is a demand zone, having proven to be the case during the fall on 25th September. The price managed to receive a bid within this area, moving back towards the $0.6000 resistance, before again faltering. Should the demand zone fail to hold, there will likely be a very fast move, back down to 0.2700-0.2500 area. XRP/USD had been within consolidation mode, for much of September, it was floating around this territory.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.5 stars on average, based on 33 rated postsKen has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.




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