Intuitive Surgical: A Rich Stock, but Like No Other

Well we have a few highly valued companies who actually are going up when they open their mouth this earnings season - Intuitive Surgical (ISRG) is one. I don't own this for the fund or in personal account but follow it with 1 eye. I once owned this stock, quite a few years ago, in the $40s. Kind of like watching your kid grow up into an adult with this one. That said, I've had many kids go Britney Spears on me as well. They don't all work out this well when you buy them as small caps. I'll give Motley Fool credit for catching this one VERY early in it's life.

I've been debating mentally as to whether to add this name, but didn't want to buy ahead of earnings due to how these stocks have been treated, but it is now up 20%. The valuation has been very rich for a long time, but it's essentially a monopoly. The fear has been hosptials (due to credit crunch) would begin pulling back on purchases of the very high end robotic machines. Again, we have to fight the "hidden shadows behind every corner" in a bear market. Thus far it does not appear to a true thesis that the bears are advancing in this name.

This is an impressive report and shows the benefit of its "razor and shaver" strategy - sell the shaver, and make long term, consistent profits off selling the razors indefinitely.

• Shares of Intuitive Surgical Inc., maker of the da Vinci robotic surgery system, surged in premarket trading Friday after the company reported a much stronger fourth quarter than analysts expected.
• The company's earnings more than doubled, rising to $1.24 per share, and revenue rose 68 percent to $189.4 million. On average, analysts surveyed by Thomson Financial expected profit of $1.04 per share and $175.9 million in sales.
• The stock gained $41, or 16.1 percent, at $295 premarket before the opening bell. Shares closed at $254 on Thursday.
• Jefferies & Co. analyst Mark Richter called the quarter "stellar." He noted that almost half of the company's revenue came from sales of accessories to facilities that already own da Vinci systems, and he said that portion is growing.
• He added that Intuitive sold 78 da Vinci systems during the quarter, 12 more than he expected, and sale prices were higher than in the third quarter.
• Oppenheimer & Co. analyst Amit Hazan said Intuitive also expects a strong 2008. He wrote that the company forecast a profit of $4.92 per share for the year, a total he called surprisingly aggressive. Intuitive expects revenue to grow 40 percent in 2008, which implies $841.1 million.
• Analysts expect profit of $4.70 per share on $811.2 million in sales.

Again, very very rich stock - but it has scarcity value. There is no other Intuitive Surgical out there.

Disclosure: No position

Comments

[Proud Canadian:]

I expect this stock plunging very deeply.

2008 Feb 04 07:44 PM

[HarMegiddo:]

haha, might dropped to 250, thats about it. ISRG is a juggernaut. if you haven't realized that yet. you must be living in the 70's

2008 Feb 05 12:37 AM

[rmiers1:]

One of the least favorable stocks of the street. It's like Bush invented it. It illustrates the ignorance of old doctor's and the intelligence and enthusiasm of the newer ones. It also illuminates the ugly business side of hospitals who have for years put the bottom line before first rate healthcare and patient recovery.
If all prostate cancer/hysterectomy patients where told truthfully the advantages of this technology 75% would insist on it's use.
Ask the 85,000 patients who used it last year and you will find a completely different story than the one told by the old guard medicine men, the cheap hospitals, and wall street who continues to sell short an unstoppable company and stock. Ten years from now, you will not find a surgical center without one.....even if they cure cancer. As a side note, sales outside the United States have been growing over 60% each QUARTER. Many Hospitals have five and one I know in particular has a several week wait. O yes, it can fix your heart without sawing your breastbone in half.
For investors, I own this stock, however I am a cancer survivor and am familiar with what this machine really does and have watched it's adoption and growth. It is a priceless product and a gift for mankind.
Despite it's detractors, watch for a stock to roar past Google and be the conversation piece of others whom listened to the naysayers (in Texas, we call them liars). I think it closed at 340+ today. Others know what I have just described. Earnings April 17, Usually goes up 25-50......Just One Man's Humble Opinion

2008 Apr 01 09:49 PM