This is the 3rd and final installment of the Healthcare Stocks Ripe for Growth series.Yesterday was medical records processor, Quality Systems and the week before that was Biotech company Gilead Sciences. This week we finish the series with a supplier of robo-surgery equipment, Intuitive Surgical.

Intuitive Surgical (ISRG).

Intuitive Surgical is an $875-million-a-year business that produces the da Vinci Surgical System which let surgeons operate by manipulating robotic arms while seated at a control console. The robotics allow for a more precise procedure, resulting in smaller incisions which result in less physical trauma to the patient and faster recovery times. All of that means lower costs as well.

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While the share price of Intuitive Surgical has fallen from its recent high due to concerns over hospital buying power during the recession, the 2nd quarter profits were 22% higher than the previous year.

Competition.
What competition? Intuitive Surgical acquired their only rival in 2003, producing a de facto monopoly. De facto because there isn’t anything keeping new competitors from diving in, except the startup costs. But in the meantime, the lead time Intuitive Surgical a big head start on building market share.

Growth story.
The da Vinci System is primary used for prostectomies and hysterectomies currently, but it’s a relatively new technology. So as doctors gain experience with robotic surgery and the systems gain acceptance in the healthcare community, other types of procedures will be added.

Income.
Intuitive Surgical generates a lot of cash from sales of accessories and replacement parts for its 1,100+ systems. Each machine generates between $100,000 to $150,000 every year. Almost half of the company’s 2008 revenue was from these recurring costs, and that percentage continues to rise. This, coupled with 0 debt and $902 million in cash, makes it a solid company with high growth potential.

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