Intuitive Surgical (ISRG) is trading at $163, far below its Morningstar.com's revised estimate of its fair value and its July 26 estimate of $175, which was made when the stock was at a lofty $322.07. Morningstar's current fair value estimate is $223, but given current economic conditions, that could be revised downward at any time.
I have blogged on ISRG 14 times, and profiled it in depth last April here. This is a case where Barron's correctly called the stock overpriced in its July 28 edition, as I reported here. Indeed, a few days later, ISRG's insiders reacted to the Barron's piece by selling $6 million worth of their holdings in the stock. But ISRG isn't the only medical device company on the ropes.
As these charts show, they're down sharply from last summer's prices along with the overall market. Indeed, medical device stocks are oversold and may be for quite a while. This is just more evidence that health care stocks and medical stocks are not good places to hide when markets crash and the economy is facing a recession.
ISRG has been what I call a "groupie stock." It's fans flame anyone who suggests it may go down. They fall in love with their stock, which always is a mistake. Wonder who they're flaming now?
Disclosure: I don't own these stocks.