The first time I bought Intuitive Surgical Inc (NASDAQ: ISRG) I paid around $7 per share and that is about the lowest point since it went public. Those shares have been sitting in our portfolio as our largest position and our best investment for quite some time.ISRG makes computer assisted robotic surgical equipment to assist doctors in a growing range of less invasive procedures.
The stock closed yesterday at $214.80. I have been tempted to buy more shares many times over the last few years and regular readers know how much I like this stock: Intuitive Surgical jumps over 32% - where's the ceiling?
Until today I hesitated to buy more because the stock was jumping so fast that I always thought it was slightly ahead of the value. Each time it just went up more.
After the market closed yesterday ISRG reported an increase in revenue and earnings.
- Revenues for the quarter grew 50% over the same period last year. The company's third quarter 2008 net income was $57.6 million, up 41% from $40.9 million reported for the third quarter of 2007. Earnings per share increased to $1.44 from $1.04 in the prior-year comparable quarter. Eleven analysts polled by First Call/Thomson Financial expected the company to earn $1.27 per share for the quarter.
Today, with the share price 50% off its high; with investors afraid of their own shadows; with world financial markets in turmoil; I bought more at $180 per share. That is 10 times what my kids shares cost and almost 26 times what I first paid.
This one is a keeper and one of the few stocks besides Berkshire Hathaway (NYSE: BRK.A) that I have ever recommended that does not pay a dividend. Even Warren Buffett has been buying and recently posted a bullish story in the NY Times. The following is the five-year chart for ISRG.
In these troubled times where extreme leverage is a recipe for disaster, ISRG has no long term or short term debt at all, and cash flow is increasing every quarter. It has a huge moat around it's enterprise and hospitals are using the company's products to a competitive advantage, see: Radio! Radio! Intuitive Surgical is now on the radio!
In our mixed up world the stock is down even though they beat analysts numbers and said during it's conference call it now expects 2008 revenue of $895.2 million to $901.2 million. The company's previous guidance was revenue of $871.2 million to $883.2 million and the current consensus estimate is revenue of $889.8 million for the year ending December 31, 2008.
In the past I have said it is most certainly worth a look. Today I really liked what I saw.
Update: Closing price 189.13
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of ISRG and BRK.B.
Ray of light: U.S. temp worker hiring increased by 34k in October
Closing Bell: Bulls gutting bears (ATVI, EWBC, GE, JASO, ENZN, MCD)
Goldman Sachs CEO Lloyd Blankfein pulls a Jeff Skilling in an interview
