Intuitive Surgical, Inc. (ISRG)

From Brian Richards:
Disruptive product: The da Vinci robot benefits patients, doctors, hospitals, and insurers -- a rare win-win-win-win.
High barriers: Intuitive owns or has use of more than 600 U.S. and foreign patents, as well as FDA approvals.
Near monopoly: Intuitive acquired its closest competitor several years ago. At the end of 2008, the company had more than $200 million in free cash flow, but as my colleague Devon Rackle recently wrote, management indicated that "there was no other company it could acquire that would provide any strategic advantage." Intuitive's the only game in town for robot-assisted surgeries.
Macro tailwinds: Americans spent $2.3 trillion on health care in 2007 -- 16% of GDP! The trend ever higher is clear, as 78 million baby boomers approach (or are in) retirement. Moreover, President Obama has made health care a priority for his administration, so the industry has full governmental support.
Predictable revenue: Innovating, manufacturing, and selling the da Vinci systems is not inexpensive. But the beauty of Intuitive Surgical's business is that only about half its revenue comes from the one-time system sales. "Instruments and accessories" -- i.e., the razor blades -- accounted for a third of 2008 sales, while the fat-margin "service agreements" made up another 15%. Most importantly, these two segments were predicted to grow between 25% and 35% in 2009, while systems sales stay flat (not bad in this economy).