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14 Week Winning Streak

Stock (Symbol) Stock Price

Intuitive Surgical (ISRG)

$576

Data is as of Expected to Report Sector

April 25, 2012

July 20

Healthcare

Sharek’s Take
David SharekISRG is on a 14-week winning streak! Wow! The market’s been up in 10 of those 14 weeks, so the stock’s had wind at its back, but still 14-straight weeks is better than Apple (AAPL), Priceline (PCLN) or even the just-as-hot Chipotle (CMG).
 
Intuitive sold 140 da Vinci units last quarter — at an average price of $1.47 million each — compared to $120 units a year ago. Replacement parts for da Vinci’s already in hospitals is 50% of sales ($208 million in instrument sales last quarter. the company sold $207 million worth of da Vincis). Although the numbers are great, ISRG’s P/E is on the high end. The stock is fairly valued.  
One-Year Chart

ISRG’s gone from $350 to $575 during the last year (+64%). But now there’s two issues I have with the one-year chart. First the P/E of 39 is high. Second the stock hasn’t had a correction in a long time. When this stock starts to fall, I think it will drop 15%.

Earnings Table
Profits were up 35% last quarter. Sales have risen 28% in each of the last two quarters.
 
Intuitive Surgical has crushed estimates every quarter since 2009 Q2 (the previous two quarters, 2008 Q4 and 2009 Q1, the company missed really bad, by 23 cents and 30 cents respectively). 
 
Annual Profit Estimates keep increasing. ISRG’s beating the street and the annual numbers keep rising. This combination keeps the stock in the zone.
 
Quarterly estimates show profit growth is expected to slow, but it looks as though ISRG will keep humming along anyway.
Fair Value
ISRG is priced high, I think its overvalued, but estimates keep rising so the stock does too.
Ten-Year Chart
This stock looks extended in the ten-year view. Profit growth is expected to be 19% this year, but 35% growth could be coming. Gosh, this is a parabolic move higher. ISRG, take a break. Rest for a while.
Power Ranking Bottom Line
Growth Portfolio

16 of 18

Intuitive Surgical is one of the hottest stocks in the market. The P/E is high, but momentum is so strong I think the stock will be up for the 15th week starting Monday.
 
Although the stock is timely, I would rather sell shares than buy them. ISRG is ranked 16th of 18 stocks in the Growth Portfolio Power Rankings. ISRG is not in the Aggressive Growth Portfolio.

Aggressive Growth Portfolio

N/A

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