Owning a stake in innovative companies is generally a great strategy for the long term. TransEnterix (NYSEAMERICAN:TRXC), a surgical robotics company specializing in digital laparoscopy, fits into that category and TRXC stock may be worthy of a place in your portfolio.
Just to provide some background information, a laparoscopy is a minimally invasive operation performed on the abdomen and/or pelvic region.
TransEnterix’s surgical robotic system is known as Senhance. This system is enhanced with artificial intelligence (AI) along with machine vision capabilities and proprietary software technology.
This might sound complicated, but you don’t need to be a scientist to calculate the value proposition of TRXC stock. So, let’s delve into the price action of TRXC right now — not necessarily with surgical precision, but at least with a sense of whether the bulls or the bears are in charge.
TRXC Stock at a Glance
On the afternoon of Feb. 19, TRXC was popping by 18% and exceeding the $5 price point. This is significant because the U.S. Securities and Exchange Commission defines any stock that’s trading below $5 per share as a penny stock.
Therefore, $5 is a battleground level and the bulls will definitely want to keep TRXC above it, if possible. That’s not an unreasonable goal since TRXC reached a 52-week high of $6.95 on Feb. 10.
It’s amazing to consider just how far TRXC stock has come. As recently as Nov. 2, TRXC shares were trading at just 36 cents apiece. Just getting to $1 seemed like a lofty objective, not to mention $5 or more.
The recent pullback from nearly $7 to $5 and change doesn’t mean that the bulls are giving up control of the price action. They’re just taking a breather, as corrections are to be expected in a strong uptrend.
Is the bull run in TRXC stock justified? To answer that question, we should observe TransEnterix’s progress in gaining market share.
The company’s Senhance surgical robotic system has been used in over 4,000 operations since 2017. Just as importantly, Senhance was used in 86 different types of surgical procedures, thereby underscoring the platform’s broad-based utility.
When we apply our focus to 2020, the picture becomes even more bullish. Here’s what took place last year:
- 10 Senhance systems were installed under operating leases
- Nine clinical programs were initiated
- More than 1,450 procedures were performed globally
Also during the past year, Senhance was granted a registration certificate by Roszdravnadzor, the Russian medical device regulatory agency. This allows for Senhance’s sale and use throughout the Russian Federation.
Anthony Fernando, the president and CEO of TransEnterix, summarized a strong year for his company, saying, “We continued to expand our global footprint with new system installations and procedure volumes rebounded in the back half of the year across each of our geographies.”
Plenty of Cash
Mark R. Hake knows a thing or two about finance. He’s been a Chartered Financial Analyst (CFA) for 27 years, and he also happens to have performed an analysis of TransEnterix’s fiscal position.
Hake’s take on TransEnterix’s financials seems robustly bullish:
[TransEnterix] now has plenty of cash to survive well into 2024, which will allow the laparoscopy robotics company to eventually produce revenue. As a result, TRXC stock has a chance of eventually doing quite well for itself and investors.
The data certainly supports Hake’s assessment. At the end of 2020, TransEnterix had around $17.5 million in cash, cash equivalents and restricted cash.
Moreover, TransEntereix “expects to have cash to support operations into the third quarter of 2021.” Plus, Hake observes that TransEnterix has raised close to $90 million after expenses through a series of capital raises and warrant exercises.
All in all, TransEnterix is in a strong capital position and the company greatly expanded its market footprint in 2020.
Hence, if you believe that the field of surgical robotics has room for growth — and that TransEnterix will remain a leader in this domain — then a long position in TRXC stock is fully justified.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.