Serious Money: You asked about Intuitive Surgical?

This company produces the hardware, software, replacement parts and services all aspects of their robot assisted surgical technology. They are the leaders in this field and hold numerous patents and FDA approvals that provide a deep and wide moat around the company protecting them from competition and giving them pricing power.

Intuitive Surgical is the only company I own where the stock's fundamentals are ridiculous but for you Google fans, this company is growing faster, has less competition and is entrenched in its niche to a greater degree. For example, how hard would it be to switch search engines if someone created a better one - only a moment, the click of a mouse. But a hospital that is using ISRG's da Vinci System (TM) would not change if you offered a better system for free. It would have to be a significant order of magnitude better and you would have to pay the millions of dollars in changeover costs, to even be considered. Another thing that contributes to the large moat - once you have trained your surgeons in the methods and procedures required to use the ISRG system, and certified them, what are the costs of training them in something else. Surgeons have not been commoditized yet.

ISRG shares have been erratic over the past year so anyone considering buying in should wait for a dip. I myself would like to buy more but not at the current price, which at yesterdays close was $122.51. The trailing P/E ratio is 65, going forward it is probably closer to 45, however I would wait until the P/E is less than the growth rate for two quarters in a row as one sign of a possible buying opportunity.

Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm. Check out his other posts for BloggingStocks here.