Intuitive Surgical (ISRG) is a good buy when it gets to $475. And the stock’s done that twice in the last two weeks, as the one-year chart shows. This week ISRG is over $500, so that dip is now gone, but with the market overbought we could see a correction coming out way shortly.
One Year Chart
ISRG’s profits rose 30% last quarter, which is solid. Revenue grew a respectable 23%, with more than half its sales coming from da VInci replacement parts (which is a steady revenue stream). The company sold 164 da Vinci robotic doctors last quarter, up from 140 last year. 75 systems were purchases from existing clients.
I sold ISRG recently, and am looking for a dip to get back in. Profits are set to grow only 19% this year and grew only 21% in 2012. This is down from 30% profit growth in 2011. This isn’t a 35% grower anymore — that’s why I sold the stock.
Fair Value
I feel ISRG is worth 30 times earnings. It’s within 10% of its 2013 Fair Value of $539.
Sharek’s Take
ISRG is in a long-term base where the stock goes from $475 to $550. I think the stock’s a good buy when it gets down to the $475 level. Traders can sell at $550, but this is also a good stock to buy-and-hold. The company usually beats the street and did so by a robust 56 cents last quarter.
View the Earnings Table here.View the Ten Year Chart here.
