Does calling something an “index” automatically make it sound safe? That seems to be part of the premise for the recent swath of ads from the Oxford Club for what they’re calling their “Recession-Proof White Cap Index.”

The ad, from Louis Basenese, is about a new investment newsletter service that they’re calling the White Cap Report. They go to some length to explain that their proprietary screening system allows them to find the stocks, usually smaller capitalization stocks with high growth rates, that will be the big winners. And he claims that they will release the “index” on January 2.

I don’t know what they’re talking about in terms of “releasing” this index, but from the looks of it they’re really just selling another newsletter — this one appears to have the normal price of $150 a year, though it’s of course “on sale” right now as they try to get it off the ground.

But more importantly, for us, Louis spends a fair amount of time in the letter teasing us about some of the picks this “system” or “index” has identified. He also gives some examples of past picks that would have met this criteria, like China Life and Intuitive Surgical, so we know that they can at least identify past performers — can they do the far more difficult thing, identify stocks that will perform in the future? We’ll see.

And no need to subscribe to this new “White Cap Report” if you’re just curious about what their top picks are right now — the Gumshoe is on the case, so let’s see what they’re teasing …

The first stock that comes to the forefront in this ad? It’s a robotic surgery company.

What comes to mind when those words are uttered? Yep, Intuitive Surgical, everyone’s favorite growth company for a few years (cut in half this year, but still growing nicely) — everyone is still looking for the “next Intuitive Surgical”, and the White Cap Report folks are no different.

So what do they have for us?

Well, they’re spinning it as a special report, “How to Cash In on the Next Robotics Revolution.”

“Days ago, our White Cap strategy identified a company poised to outperform even Intuitive Surgical (recall Intuitive Surgical surged 1,628% since being added to the White Cap index).

“It operates in the cutting-edge robotic surgery industry, too. But it doesn’t compete against Intuitive Surgical. It’s blazing trails in the entirely separate, $3 billion, non-invasive heart surgery market, with a technology that goes way beyond angioplasty.

“The firm’s FDA-approved product allows surgeons to operate on a beating heart, cutting away dead tissue and fixing problems as they’re discovered.

“And it does it without opening up the chest!

“The Cleveland Clinic, ranked one of America’s best hospitals by U.S News and World Report, dubbed the company’s invention “the top medical innovation of 2008.”

“Yet, this new technology has only penetrated 1% of the heart-surgery market. (Some 2.2 million Americans are in need of this company’s life-saving device.)”

Ring any bells? I could have sworn that I had written about this company, but if so I can’t find those old comments — maybe I was talking in my sleep.

This is, in all likelihood, Hansen Medical (HNSN)

Hansen Medical is a maker of another surgical robot, but their specialty is intralumenal robotics, essentially surgery done by robots that are tiny enough to be inserted into the body through catheters. I’m certainly no doctor, but it’s sort of similar to a balloon angioplasty — only instead of snaking in a balloon, you snake in a little prehensile robot that can perform more complex maneuvers. Intuitive Surgical’s da Vinci, by contrast, does an advanced type of laparascopic surgery, the traditional version of which looks like operating with chopsticks — fewer and smaller incisions, but still surgery through holes in the body cavity.

And if this is going to be the next Intuitive Surgical, they’ve got a looooong ways to go. Still, there are some similarities — beginning, perhaps, with the fact that Dr. Fredric Moll was involved in the founding of both companies (he’s the CEO of Hansen, I don’t think he’s directly involved in ISRG any more … and he also is on the board of MAKO Surgical, which seems to do surgical robotics for knee operations).

So where are they? Well, they’re still burning cash, and still losing market cap — the shares are down significantly from when they hit their highs of about $40 a bit over a year ago, and they’re down from when Jim Cramer anointed them the “next Intuitive Surgical” back in March of 2007. Of course, we can’t blame anyone for that — put ‘near every other stock is down during the past year.

Like Intuitive Surgical (and Gillette), they employ the “razor and blade” business plan — they hope to make some money on the sale of the initial machine/robot, but much of their revenue in the future will come from recurring sales of disposable tools that are used in the machine. They have only installed about 35 systems so far, and at this point it costs about twice as much to build and sell the devices as they get for selling them, so they’re going to have to get to an inflection point where the installed base is big enough to build margins for the disposable attachments. Intuitive Surgical is at that point now, but it took many years to get there.

Revenue growth has been good, but this is still the tiniest of niche products — their device has an installed base of 35 machines (20 in the US and 15 in Europe), and has been used in a bit over 1,000 procedures so far. In the year that Intuitive Surgical first became profitable, 2004, they had nearly 300 robots as an installed base, and those robots were used in about 20,000 procedures. Obviously, the numbers will be different for each company — I don’t know what the inflection point will be for Hansen Medical, but I would like to make a guess at that before considering buying shares. If you’d like to start looking into these guys, you could do worse than beginning with the last conference call — you can see the transcript of that call is here.

Personally, in this uncertain environment I have a bit more fondness for the proven growth of Intuitive Surgical — perhaps because I enjoyed some nice profits from ISRG over the past few years before I sold my remaining holdings some time ago. ISRG is still priced as a Cadillac in a Yugo market, but they have an installed base that just went over a thousand machines, each of which cost over a million dollars, and they have a huge market share in a surgery (prostatectomy) that should demographically be expected to explode in the coming decade. I don’t now own intuitive Surgical shares, but do have a lowball order that has been in for ISRG shares for a while now, though the shares haven’t dropped down to my buy price yet. At the rate the market’s declining, however, I may again be the proud owner of a small ISRG position by the time you read this.

They teased a second stock in this first “White Cap” report, one of the “dark pool” order facilitating brokers that handles large, anonymous institutional stock trades, but the best match for that teaser seems to be a company that has filed for an IPO but has not yet gone public (Liquidnet), so I’ll have to dig a little deeper on that — they did say in the ad that they’re looking in part for new IPOs, but I doubt they’d be writing about a stock that hasn’t even finalized a date for going public (as far as I know). And there were a few other little hidden goodies in there, so I’ll keep an eye out for anything worth sharing.

Oh, and if you’re really looking for an index? I don’t know of anything in this ad that makes it appear that there will really be an “index” tradeable product based on this, despite the fact that they say they will “go public” with the White Cap Index in January. There are “intelligent” ETFs that use various stock picking strategies and try to adapt and use some similar screening strategies, if that sounds like your kettle of fish — Powershares uses their own “Intellidex” indexes for their Dynamic ETFs that cover almost every sector and other broad market segment, for example, and others like Wisdom Tree use fundamental criteria to weight their indexes (this is not meant to endorse either ETF family, just wanted to give you an idea of what’s available). Neither of those, nor their competitors, in all likelihood, will create the kind of highflying return you can get from a single aptly (and luckily) chosen growth stock, but if you’ve got your eye out for an index-based investment you might find that ETFs like those might give you enough sexiness to keep the heart beating, and possibly even a market-beating return.

In the meantime — happy investing!