Serious Money: GOOG has blowout quarter -- but ISRG beats it roundly

Posted Oct 22nd 2007 4:30PM by Sheldon Liber
Filed under: Forecasts, Rants and Raves, Google (GOOG), Serious Money, Stocks to Buy, Intuitive Surgical Inc (ISRG)

Hey there Google Inc. (NASDAQ: GOOG) fans, congratulations on another fantastic earnings report. But I wouldn't be too smug if I were you.

Amazingly, there is a company out there that did even better. That company is Intuitive Surgical (NASDAQ: ISRG).

While Google is getting most of the press, this rapidly growing company is not just "high-tech"... it may be the "highest-tech" stock in the market, or close to it. ISRG, which makes robotic surgical equipment, beat Google last year, it trounced it this year, and it is highly likely it will surpass it next year.

Looking at a chart for the past three years it may be shocking to some investors to imagine anything leaving Google in its dust...but Intuitive Surgical has, take a gander:

For a while after Google's IPO and immediate run-up, the stock almost kept pace. But with each passing quarter ISRG has been on a blistering path. As reported by The Motley Fool: "The company behind the robotic arms that are revolutionizing the surgical process on operating tables everywhere earned $1.04 per share during the third quarter. Wall Street was looking for a profit of only $0.80 a share. Intuitive has now beaten estimates in each of the past 20 quarters." Last quarter I wrote Intuitive Surgical jumps over 32% - where's the ceiling? I guess it still has none.

GOOG reported Q3 45% growth; ISRG reported 65% Q3 growth and it's accelerating. Speculation abounds about when Google -- closing today at $650.75, gaining $6.06 (+0.94%) -- will reach $1,000 dollars a share. No one is talking about when Intuitive Surgical, which closed today at $285.86, gaining $16.52 (+6.13%) will reach $1,000 a share?

Anybody out there agree with me that ISRG gets there first? Yes, I think ISRG, capitalized at about $10.5 billion, has more room to fly than Google, which is capitalized at $151 billion. So after glowing about ISRG, I cannot close without stating that both companies offer phenomenal products, have great management, great futures and should be on your watch list. To anyone who was astute (and lucky) enough to get in early on both -- my hats off to you!

Disclosure: I own ISRG stock.

To find potential opportunities and verify my track record, read Chasing Value or Serious Money.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm.

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