My 2 cents on $TRXC -> Trust the process

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.

What process are you referring to?

The process of getting Senhance to the surgeons and hospitals who needed it.  Capital expenditure (CapEx) by any hospital is a stretch-out process that required due diligence, budgeting, comparison, justifications, profit & loss analysis, etc.

Let me begin by using two articles below:

Article 1:

3 Ways Hospitals Can Maximize Their Capital Expenditures

September 12, 2012

Below is an excerpt:

Quick hypothetical: Your hospital or health system just completed its major capital initiative, raising hundreds of millions of dollars, perhaps even billions. The plan is to spend those funds strategically over the next five years across a spectrum of needed projects. With a larger set of potential projects than the budget will allow, where should a hospital or health system allocate that money to generate the biggest bang for its buck?

That single question will undoubtedly lead to more. “What is the optimal approach to getting the maximum value out of a network’s physical footprint from a location standpoint?” says Matt Montgomery, senior vice president and head of the healthcare division at Buxton, a consumer analytics firm. “And in a related sense, how do you program those facilities? What services should be provided in what locations based on relevant factors (market demand, competition, etc.)?”

My comment: Biggest bang for the buck will naturally be at the top of anyone participating in executive decision making in approving the CapEx. While it may not be the dominant factor, I believe it’s logical that it’s an undertone in any major CapEx decision.

Article 2:

How to Be Strategic in Hospital Capital Budgeting

Posted byHEPACART on Sep 19, 2016 10:00:00 AM
Below are an excerpts:

Why Strategic Capital Budgeting is Critical
Your capital expenditure planning is how you spread out the costs of important upgrades, renovations, healthcare construction projects and other big ticket items. When you can allocate these funds well, you will not only be able to improve your facility’s overall performance but will have the necessary budget left over for unplanned expenditures that will undoubtedly come up over the course of your year. On the other hand, if you are not strategic with your planning, you can run into shortages that can become real problems.

My comment: Allocating funds well is of utmost important.

Always Solve for ROI
Many capital expenditure requests that come in are necessary improvement, but not all are. What is most important in deciding how to spend your capital budget is determining how the investment will pay off regarding your facility’s goals. You must be able to demonstrate the ROI of each investment for it to be strategically sound.

My comment: How the investment will pay off?  Demonstrate the ROI is essential for a well-run healthcare facility.

No two healthcare facilities will be the same, but when you make capital expenditure choices with the ROI for your unique needs in mind, you will be confident that you are moving your facility in the right direction.

My comment: Making CapEx choice with ROI is critical for survival despite difference in healthcare facilities.

Despite the sources and dates of the article and its opinionated analysis, it’s my 2 cents that the suggestions made are universally common sense in any budgeting process.  Below are the summary based on the two articles above:

  • Biggest bang for the buck
  • Allocating funds well
  • Demonstrate the ROI

If you’re to use the above three criteria to be the primary objective in evaluating a CapEx on robotic surgical assistant, which one would you choose when there are ONLY TWO FDA approved robotic surgical assistant available?

Is it possible that those who hadn’t bought the Da Vinci by now is because their analysis failed the ROI test?  What is the “actual” state of competition between the two robotic surgical assistant right now at the healthcare facilities?  Senhance only got approved last October, a mere five months ago, so I figured (aka my 2 cents) it is WAY TOO EARLY for anyone claiming to know the demand for the Senhance when you factored in the time and effort of getting any CapEx to be approved..

However, I believe the results of 1st and 2nd quarters of 2018 will slowly reveal the nature of the competition by simply watching for possibility of declining Da Vinci system sales.  It doesn’t need to be a drastic change because a declining number means decision makings are now taking longer because there is a CHOICE.

Here is my 2 cents-> Anyone claiming to know the true demand of Senhance is simply offering an opinion at this point.  Anyone claiming authority on the demand of Senhance is STILL offering an opinion at this point.  Basically, we are in the neutral zone as far as knowing the true demand of the Senhance robotic surgical assistant.  Strong or weak demand, only time will tell.

It’s interesting to see how some bashers would show up and claimed to be an “authority” in the robotic field and started to bash Senhance by using the word “fact” as if by saying it their opinions became fact.  The way I see it, anyone who claimed to be an authority of anything lost their credibility when they hide behind a screen-name.  I suggest that instead of debating with a basher, question their credibility by drilling on their background and nothing else.  Don’t even engage in the discussion of Senhance because the whole debate is pointless if the basher is a fake.

  • “What is your credential?”
  • “What is the title of your job?”
  • “How can I verify what you said is real?”

I reckon that by keep asking these questions, you may be able to stop these fakes because the resemblance of any truth can only come out by revealing who you really are. Just by saying I’m (fill in blank) isn’t going to cut it.  “Can you show me proof you are who you say you are?”  Hence, it is literally impossible to substantiate who you really are in the medical field without giving up your name, your title, and where you work. And guess what?  EVEN if the basher revealed their true identity, whatever they had to say is STILL an opinion because it is too early to tell.  One surgeon (or even a few) who revealed his true name do NOT represented ALL surgeons (as in the WDR hit-report).  It’s conceivable that some Cadillac owners have no problem revealing their names and titles but they are still a biased group against the Mercedes Benz nevertheless. Even if everything is put into context, there is still an element of uncertainty that can only be remedied by passing of time.

Patience is required for BOTH the bulls AND the bears.

In summary, the risk I’m taking for holding $TRXC is based on my own probability assessment of the following:

  • Hospitals will follow the criteria mentioned regarding CapEx
    • Biggest bang for the buck
    • Allocating funds well
    • Demonstrate the ROI
  • Having a CHOICE will satisfy another group of surgeons who find the Da Vinci not compatible
    • CHOICE offers an element of competition to increase innovation
    • CHOICE reflects the diversity of the human race

Obviously, I’m putting high odd on the above to win over decision makers at the end to make Senhance a successful alternative to the Da Vinci. It’s my own version of calculated risk so to speak.

Like I said in my early posts, the shorts are jumping the gun way too early in the game in discounting Senhance as a valid CHOICE besides the Da Vinci.  Because CapEx is something you DON’T rush into, we must trust the process to work it way toward the decision making end before we know the real truth.  By 2019, we will know a lot more. Because I’m long $TRXC, I’m betting on Senhance being a viable option and will soon populate the medical community with its Senhance robotic surgical assistant with haptic feedback.

Don’t forget, all the above are my opinion only!

Good Luck and may fortune blesses all TRXC investors.

My 2 cents.

From my camera:

Sunday Home Depot 030

 

 



Categories: Daily trading Journal, trading journal

Tags: ,

1 reply

Trackbacks

  1. Weekly thought on $AEMD, $DFFN, $IBIO, $LRAD, TRXC – Trading my two cents

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s

%d bloggers like this: