Friday, February 1, 2008

Intuitive Surgical (ISRG) Very Impressive


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 it 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.

No position

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