The S&P 500 is in full swing proper now, having entered the third 12 months of a bull market. However one factor historical past reveals is that it’s only a matter of time earlier than the inventory market crashes once more. It’s an inevitable a part of investing.

To be clear, a correction is a drop of 10% from current highs, whereas a crash is a decline of 20% or extra. Neither is the tip of the world. In actual fact, the second lesson from historical past is that the market has all the time ultimately bounced again to scale new highs.

Due to this fact, I’d see a crash as a good time to do a little bit of discounted purchasing. And that is the one world-class S&P 500 share I’d like to purchase extra of throughout a market meltdown.

Surgical robots

I’m occupied with Intuitive Surgical (NASDAQ: ISRG), the pioneer in robotic-assisted surgical procedure. Its flagship da Vinci system helps surgeons carry out minimally invasive procedures, which frequently result in sooner restoration instances and shorter hospital stays.

Final 12 months, 2.2m procedures had been carried out worldwide utilizing da Vinci machines. And over 15m have now been carried out over the previous twenty years.

In Q3, worldwide procedures grew roughly 18%, and the put in base grew to 9,539, a rise of 15% in contrast with Q3 2023. Income jumped 17% to $2.04bn, whereas web revenue rocketed 36% to $565m.

Highly effective enterprise mannequin

What I like right here is that the overwhelming majority of Intuitive’s income is recurring (83% final 12 months). You see, each surgical procedure with the robots require particular devices and equipment that want common alternative, producing constant gross sales.

And as extra techniques are put in, this creates a recurring-revenue flywheel, the place extra put in techniques drive extra demand for equipment and providers. Alternative devices and equipment contributed 62% of complete income for Q3.

Plus, as soon as the agency’s merchandise are put in in hospitals and surgeons are skilled on them, there are very excessive switching prices. In different phrases, extremely expert professionals comfy with the da Vinci system are unlikely to wish to change. This offers Intuitive a large aggressive benefit (or moat).

What am I ready for?

That each one sounds nice, so why watch for a giant dip earlier than shopping for extra shares? Properly, after surging by round 100% up to now 12 months, the inventory could be very costly. At $513, it’s buying and selling on a price-to-earnings (P/E) ratio of 82.

Whereas the inventory isn’t ever low-cost due to the agency’s dominant aggressive place and high-quality income, that’s nonetheless very dear. In actual fact, its above the five-year P/E common of 72.

Additionally, Intuitive isn’t with out threat, as shareholders came upon through the pandemic when many elective operations had been postponed. Income took a success and the inventory dropped 35% in a single month in early 2020.

Due to this fact, one other international pandemic is a key threat, whereas the corporate faces rising home competitors in China.

A brilliant future

Nonetheless, I’d like to personal extra shares (on the proper price) for the long run. The corporate’s next-generation da Vinci 5 system provides improved 3D imaginative and prescient for larger surgical precision, and elevated computing energy and data-gathering capabilities, providing the potential for self-improvement.

Wanting forward, the worldwide marketplace for robotic surgical procedure seems nowhere close to saturation level. In line with most estimates, it’s set to develop briskly at a compound annual charge of round 17% by to 2030.