Thierry from arvy
CFA, Co-Founder & CIO of arvy, Quality Investing
Stryker is a slow-and-steady compounder, leading knee and hip replacement as an aging population spends more on care. People over 65 spend 3x more on healthcare, and baby boomers are turning 65. A three-year FDA head start let Stryker install over 3,000 Mako robots, past 2 million procedures, locking in surgeons and hospitals. Each system drives recurring implant, disposable, software and service revenue AI cannot code away. Sales grow mid-teens, 4% above peers. x.comÂ
Stryker's 10% post-earnings drop is unwarranted because the numbers were fine. Organic revenue was in line, margins beat, full-year guidance was reiterated and MedSurg is tracking to the high end of its range. Keeping guidance after a cyber incident, despite end-market callouts from Intuitive Surgical and HCA, should be positive. The stock is at its lowest multiple since 2015, derated from over 30x to 18x, with Mako and neurovascular strong; a collapse in hospital buying is the risk. x.com x.comÂ
Intuitive Surgical's share repurchases add capital return to its case as one of the highest-quality compounders in medical robotics. It bought back $4.45B of shares in the first nine months of 2026, including $2.94B in Q3, while kicking off an early Stage 2 uptrend after reclaiming its 200-day SMA. x.comÂ
Stryker's soft summer reflects a deteriorating company, not macro weakness. No other device company talked about a soft summer, yet the market reads it as a macro issue and people want to buy Stryker, using it to express a preconceived thematic trade. The macro is fine; Stryker is the problem. x.com x.comÂ
Intuitive Surgical's surgical-robot moat is sturdier than the fear that sent it down about a third this year. The worry is that Medtronic and J&J will finally break its monopoly; maybe eventually, but surgeons train on its system for years and hospitals build workflows around it, so switching is hard. Thousands of placed systems keep generating recurring revenue for years. It's also a genuinely different bet from rates or AI spending. x.comÂ
Stryker's rare double miss looks like quarterly noise, since full-year 2026 guidance is unchanged. Healthcare stocks are widely hated after five years of broken charts from the COVID boom-bust, but fundamentals say otherwise. They are the ultimate safety stocks, and the time to buy them is when no one wants them. x.comÂ
Johnson & Johnson looks expensive at 22x for its growth, even though its story is clean. Limited loss-of-exclusivity risk until the 2030s, a cleanup via spin-off and divestments, and a pipeline in IBS and cancer could deliver double-digit EPS growth before 2030, and Street estimates are probably too low. Still, Stryker at about 20x 2027 earnings, with high-single-digit organic growth and strong M&A skills, beats JNJ at 21x, which tends to overpay for growth like typical large pharma. x.comÂ
Intuitive Surgical controls over 80% of installed soft-tissue surgical robots worldwide, and every da Vinci procedure consumes proprietary instruments only it sells. The system is the razor and the tools are the blades, so procedure volume compounds annuity revenue from an installed base hospitals already paid for. At $441.58, forward EPS of $11.79 at 40-50x implies $470-590 over three years if procedure growth holds; pullbacks are buying opportunities. x.comÂ
Demographics should offset the risks to procedure growth at surgery-related device makers such as Boston Scientific, CONMED, Edwards Lifesciences and AtriCure for the next five years, though those risks eventually bite. @Borlaug_ argues that falling obesity rates could cut a couple hundred basis points from long-term growth in many procedure categories, with policy the near-term negative. Intuitive Surgical flagged the ACA-sensitive areas well. Within devices, S-curve stories are preferable. … Show more
Robotics is becoming an economy built in eight layers, from software and compute to drones, factories, cloud, sensing, surgery, hazardous work and logistics. Palantir, Nvidia, Broadcom and Qualcomm supply compute and decisions; AeroVironment, Ondas and Red Cat build drones feeding defense primes; Tesla, Honeywell and Teradyne bring robots into factories; Mobileye and lidar makers handle perception; Intuitive Surgical builds recurring surgical revenue; Amazon and Symbotic automate logistics. … Show more
Robotics may be AI's next frontier, and the bigger opportunity may be everything that makes robots move, not just humanoids. Deploying millions of robots needs motors, sensors, vision, motion control and factory, warehouse and surgical automation. The picks and shovels include Amazon and Symbotic in warehouses, Teradyne, ABB and Fanuc in industrial robots, Rockwell, Honeywell and Parker Hannifin in automation and motion, Cognex, Ouster, Zebra, Intuitive Surgical, Serve and UiPath. x.comÂ
