This has been a truly great read for a Sunday, thanks a lot of the effort put into this and sharing it.
I've followed Medacta for quite some time, ever since Juno (Dutch fund) took a position. It always seemed relatively expensive making my shy away to invest the time to really dig deep, prioritizing other opportunities but keeping Medacta on my "long list".
You've done a great job in shares details about their moat and potential competitive advantage period.
At the same time you are providing a balanced view, looking into the bear case.
I really love that as Surgical Science is on of those other companies on my "long list" that is a great example of a company that could erode Medacta's moat. You probably know them as well.
I am still undecided on both and will likely share this with the surgeons who partly replaced my wife's knee to get the "customer perspective".
I actually already got a nice reply from the orthopaedic surgeon that did my wife's knee replacement (partial) surgery.
Medacta's products are not a allowed in the Netherlands (where I live) because it's a regulated market.
The surgeon actually offers injections that help patients delay surgery. About 20/25% of patients is not happy with their knee replacement but afraid to tell the surgeon.
He also addressed that competition is intensifying (locally I think) and that even though robotic surgery supposedly is top of the bill, it actually is not and in the end the surgeon is still key.
So that makes me ponder to what extent injections, if they gain popularity, could hurt a Medacta. Especially with healthcare costs rising I can imagine injections to delay expensive surgery could gain popularity. Also, with surgeons remaining important, impact of robotics/AI could be minimal. Also with Surgical Science, they basically train surgeons let them "make flying hours" on the simulator.
For me, this doesn't change my stance. I like the company but right now I don't "feel" there is enough margin of safety or conviction on the strength of their moat and the longevity of those competitive advantages. Doesn't mean I don't believe they could have both but since it's all relatively I feel there are enough other companies I currently feel more comfortable with.
This has been a truly great read for a Sunday, thanks a lot of the effort put into this and sharing it.
I've followed Medacta for quite some time, ever since Juno (Dutch fund) took a position. It always seemed relatively expensive making my shy away to invest the time to really dig deep, prioritizing other opportunities but keeping Medacta on my "long list".
You've done a great job in shares details about their moat and potential competitive advantage period.
At the same time you are providing a balanced view, looking into the bear case.
I really love that as Surgical Science is on of those other companies on my "long list" that is a great example of a company that could erode Medacta's moat. You probably know them as well.
I am still undecided on both and will likely share this with the surgeons who partly replaced my wife's knee to get the "customer perspective".
Again, exceptional write-up, thanks! 🙏
Thank you so much, glad you found it useful.
And it's good to hear you also validate the view.
Any points you think I missed or not represented properly?
Anything you would like to add or dig further into?
You're welcome.
I actually already got a nice reply from the orthopaedic surgeon that did my wife's knee replacement (partial) surgery.
Medacta's products are not a allowed in the Netherlands (where I live) because it's a regulated market.
The surgeon actually offers injections that help patients delay surgery. About 20/25% of patients is not happy with their knee replacement but afraid to tell the surgeon.
He also addressed that competition is intensifying (locally I think) and that even though robotic surgery supposedly is top of the bill, it actually is not and in the end the surgeon is still key.
So that makes me ponder to what extent injections, if they gain popularity, could hurt a Medacta. Especially with healthcare costs rising I can imagine injections to delay expensive surgery could gain popularity. Also, with surgeons remaining important, impact of robotics/AI could be minimal. Also with Surgical Science, they basically train surgeons let them "make flying hours" on the simulator.
For me, this doesn't change my stance. I like the company but right now I don't "feel" there is enough margin of safety or conviction on the strength of their moat and the longevity of those competitive advantages. Doesn't mean I don't believe they could have both but since it's all relatively I feel there are enough other companies I currently feel more comfortable with.