Asensus Surgical (NYSEAMERICAN:ASXC) has had a topsy-turvy year. Redditors pushed ASXC stock to as high as $6.95 per share, but shares now trade closer to $2. It’s enough to make investors wonder whether this company deserves another look at all.
The chances of a future short squeeze are slim. Just a quick recap, the short percentage of the float is the percentage of a company’s stock shorted by institutional traders, compared to the outstanding share capital available for public trading.
For ASXC stock, this figure stands at 4.6%, pretty low, all things considered.
Hence, when deciding to invest in Asensus, you have to decide whether you are interested in the company’s long-term story. Unlike several meme stocks, this one has a story that has legs to run.
Asensus Surgical has a viable product in the Senhance laparoscopic system, a revolutionary tool that aims to improve the elective surgery procedure process.
Since the company’s platform involves machine learning and AI, investors have reason to be bullish regarding its future.
The company realizes this as well. That’s why management changed the name to Asensus Surgical from TransEnterix. The name change is not skin deep. It’s part of a larger strategy to focus on digital surgery.
One in every five surgeries encounters some complication. When that happens, the doctor or medical institution gets nothing.
Senhance will help reduce costs and provide a digitized interface between the surgeon and the patient designed to enhance surgeon control and reduce surgical variability.
Overall, ASXC stock is an interesting investment worth a small position in your portfolio. I don’t consider it as strong an investment as Intuitive Surgical (NASDAQ:ISRG). However, it is still good enough to invest based on the information available.
ASXC Stock: An Interesting Bet on Digital Surgery
Technological innovation in the surgical space is still at a nascent stage. According to one report, the global digital surgery technologies market is expected to reach $5.11 billion by 2030 from $252.5 million in 2019, growing at a CAGR of 32.1% from 2020 to 2030. Hence, there is a lot to gain for a company like ASXC stock.
It would be best if you looked no further than its peer Intuitive Surgical in the last year to gauge how highly the market values the company and the niche it serves.
Besides, 2020 was not a great year for the sector.
Non-urgent elective surgeries have gone down in the last year due to the novel coronavirus pandemic.
However, that situation is changing. With vaccinations rolling out and the American economy starting to revive, there’s likely to be a bump in surgery numbers. That is a positive tailwind for companies like Asensus and Intuitive.
We have already seen numbers pick up in the fourth quarter. Topline for Asensus grew 61.1% sequentially in the fourth quarter, a heartening sign for the company’s investors. Total net operating expenses also fell to $14.2 million compared to $18.1 million in the year-ago period, some decent belt-tightening during a difficult period.
The cash position is also good, with $169.5 million in funds available as of Feb. 1. Granted, a lot of that has to do with the stock issuances, but then we cannot fault the company for taking advantage of its surging stock price.
FDA Nod Is Major News
ASXC bulls had another reason to cheer in March when the FDA extended clearance for its Senhance surgical system.
“The indication expansion allows Senhance to be used in many high-value, complex reconstructive surgeries such as those used to treat reflux and obesity,” Asensus Surgical president and CEO Anthony Fernando said on the occasion. “Including previous indications granted, the Senhance Surgical System can now be utilized in over 2.7 million general surgical procedures performed in the US annually.”
Well, that was a mouthful, but you get the point. General surgical procedures represent a massive market for Asensus. And the FDA approval is a major cause for celebration. Such announcements will help transform the company from a day trade to long-term investment.
My Final Word On Asensus
One cannot stress the importance of investing in disruptive trends. Artificial intelligence, machine learning, 5G, IoT will be the most important tech trends in the short term.
So, Asensus-like disruptors stand to make investors a lot of money.
If you are here for retail trading, then another run towards $7 is unlikely in the short run, but if you want to invest in the nascent stage of a company that is on the move, I recommend ASXC stock.
On the date of publication, Faizan Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Faizan Farooque is a contributing author for InvestorPlace.com and numerous other financial sites. Faizan has several years of experience analyzing the stock market and was a former data journalist at S&P Global Market Intelligence.