| Stock (Symbol) | Stock Price | |
Intuitive Surgical (ISRG) |
$348 |
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| Data is as of | Expected to Report | Sector |
August 25, 2011 |
Oct 18 |
Healthcare |
| Sharek’s Take | ||
 Intuitive Surgical’s prospects turned up last quarter. When doing my ISRG quarterly updates, I usually focus on da Vinci system sales and recurring revenue from replacement parts needed for da Vinci’s. This quarter, I’m pleased to say the company beat by a solid margin and increased estimates, which wasn’t the case in my article three months ago.ISRG is a 30% grower in my eyes, and its selling at 30 times earnings. I think the stock is fairly valued around here. If ISRG pops over $400, investors could take profits, although they would be selling shares in one of the best buy-and-hold stocks of the decade. |
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| One-Year Chart | ||
 ISRG stock has been hanging in there through the current market correction, that’s a good sign. It has solid support between $325 and $350.Estimates show growth is expected to slow 2QtrsOut but I believe the company will be able to keep the 30% growth going. At 30 times earnings, the stock is neither a bargain or expensive — its around where it should be. |
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| Earnings Table | ||
 Profits jumped 33% last quarter, way better than the 22% 2QtrsAgo (see, momentum is improving). Sales rose 20%.3QtrsAgo ISRG crushed estimates by 78 cents. 2QtrsAgo it only beat by 9 cents and the stock lost momentum. Now earnings momentum is back after the 21 cent beat LastQtr. Annual Profit Estimates swelled. That’s a good sign. Da Vinci’s need replacement parts to operate. Those parts comprise over 50% of ISRG revenue. So the company has a steady stream of revenue each quarter. Quarterly estimates look decent. ISRG management usually beats the street so I’m not too concerned about the estimated “slowing growth” ahead. |
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| Fair Value | ||
 ISRG is right at its 2011 Fair Value. Upside is fair for 2012 and bet ISRG will have better earnings than is currently expected. |
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| Ten-Year Chart | ||
 ISRG stock has been fabulous for the past decade. I originally purchased the stock at $29 after the company beat the street on 10/27/04. I sold the stock during the downfall of 2008/2009 and bought it back on the way up (paying more). The point I’m trying to make is sometimes its better to hold this stock then sell it. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
18 of 19 |
Intuitive Surgical is where it should be. Investors who like to take profits can take profits in ISRG if it heads over $400. Long term investors can relax and sit with this stock, as there is solid support around these levels. |
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Aggressive Growth Portfolio
N/A |
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