Every sector has one. By “one,” we mean that story stock that soared to unprecedented heights, generating three- and four-digit returns for investors in the process. By now, everyone knows Apple (Nasdaq: AAPL) has done this for savvy investors in the tech sector. Amazon (Nasdaq: AMZN) and Google (Nasdaq: GOOG) have done the same for investors that embraced the Internet theme.

In the medical device sector, Intuitive Surgical (Nasdaq: ISRG) has proven to be the stock of a lifetime. Next month, Intuitive Surgical will celebrate its twelfth year as a public company and since its June 2000 IPO, the stock has returned almost 3,000%. That’s simply an astounding figure and it explains why the stock currently trades over $500 a share, a stratosphere that only Apple, Google and a few others can lay claim to.

Hyper growth potential from two cent microcap

There’s no need to go kicking yourself about missing out on Intuitive Surgical because the next great growth story in the medical device sector may have just arrived and smart investors can get a hold of this stock today for less than two cents a share. That company is Vycor Medical (OTCBB: VYCO).

Florida-based Vycor Medical, which has been in business since 2005, sells surgical access systems to hospitals and medical professionals. More specifically, the company’s Viewsite Brain Access System, which is used by neurosurgeons to access the surgical site in the brain.

Vyco’s NovaVision system is the first to provide permanent (albeit partial) restoration of vision lost due to stroke or brain injury, potentially helping millions of sufferers worldwide.

Two stellar products with billion dollar potential

Viewsite and NovaVision may sound like complex medical products, and they are, but what investors need to concentrate on is the potential these products offer. At the end of the day, that’s what most micro-cap medical device companies start out as: High-risk, high-potential, high-reward plays that make products most folks without “MD” after their name cannot easily explain.

To this day, most average investors probably can’t explain what Intuitive Surgical makes, but it’s unlikely they care given the stellar returns the stock has provided.

In the case of Vyco Medical, a recent research report published by Harbinger Research proclaimed the company could enter hyper-growth over the next two or three years.

From that report: “Vycor’s ViewSite is already making good inroads into the relatively small neurosurgery market, both in the U.S. and overseas, and we expect sales to grow robustly beginning in early 2013. However, we are most excited about the long-term potential of the NovaVision subsidiary, as its products have no real competition and address a global market that could be up to $20B in size.

“Although NovaVision’s products could require several years to achieve market penetration of even 5%, this would still equate to a huge win for a company of this size.”

Translation: Vyco Medical serves a high-demand, $20 billion market where there are no legitimate competitors at the moment. Even if competitors do appear, Vyco’s first-mover status could prove to be too much to overcome and the company’s appealing valuation could encourage a larger rival to consider an acquisition of Vyco.

Vycor Medical – Three key investment highlights make sense

Obviously, buying a stock just because it might be a takeover target down the road doesn’t make for sound investing. However, buying a stock because of its disruptive technology, potentially large market and reasonable valuation does make sense.

Strong BUY Rating Issued

“Based on solid near-term growth prospects and extreme upside in potential in 2013 and beyond, we are initiating coverage of Vycor with a Strong Buy rating and a target price range of $0.05 per share. Assuming the Company executes on its plan over the next 12-18 months, we believe its current valuation multiple of just 4.2x our 2013 revenue forecast is far too low, and believe a multiple in the 12x to 15x range is more appropriate,” according to Harbinger Research.

Good risk/reward potential

So even if an investor buys just 1,000 shares of VYCO at two cents and the stock rises to five cents, that means every $20 invested turns to $50. That sounds like a pretty good risk/reward scenario, doesn’t it? Now…picture a $10,000 investment turning into $25,000. OR, if VYCO turns out to be the next Intuitive Surgical and returns 3,000%, then $10,000 turns into $300,000.

Mike Casson
Executive Editor