Bought Intuitive Surgical, some thoughts
Intuitive Surgical had long been a TMF recommendation. For quite some time, I had thought the stock was overpriced. However, I recently bought around $100 a share.
ISRG's technology is very attractive. The Da Vinci system is, as most people interested in the stock would know, a minimally invasive technology. The system is being used in an increasing number of procedures. Also, the installed user base is increasing. The firm is generating an increasing amount of revenue from service contracts, which is a stable revenue source.
The market overreacted to management's relatively weak guidance for 2009. No surprise there. The market had, I thought, overreacted on the upside.
Although health care is adding jobs, a lot of hospitals are still under financial stress. ISRG, being a monopoly, has held the line on pricing, anticipating significant future sales when conditions pick up. I don't think pricesin the $90-110 range are justified unless they experience a prolonged period of zero sales growth.
This is definitely a no-brainer pick.