"I'm just curious if you hung on to your ISRG or if you bailed on it... I've been following it since this article, and man, its really heading down to the boiler room... Doctors seeem to be making cuts all over the place, and it looks like ISRG is being taken for a ride... I'm looking at getting in, but maybe if it hits 112 to even as low as sub 100... But I'm curious how you've taken to it?"As the old saying goes in regards to the stock market, beware trying to catch a falling knife. Regardless, I have been a buyer of late. But first questions first. We did sell 20% of our position for a large gain just under $200 per share, having originally bought in at $7.70. We did not bail out but we did take our original money off the table, and then some.
When I last wrote about ISRG in Chasing Value: Intuitive Surgical Earnings -- what now? I had bought a small portion back at $180 and put in a GTC (good till canceled) order for the stock at $140 which triggered today. The stock is trading around $130 as I type so I am losing on the new positions.
Concerns expressed by analysts are blamed for the stock sinking today. Wachovia issued a research note earlier saying that capital spending within the hospital industry has further deteriorated. The firm cites recent checks indicating that hospitals are having trouble raising capital, in turn, "forcing them to ration capital expenditures to increase free cash flow."
It may be true that capital spending is down, however if ISRG goes lower, I may be buying even more stock instead of buying into the fears of the crowd. Intuitive Surgical remains a unique company, with no meaningful competition, supported by doctors, patient demand and insurers alike.
If President-elect Obama wants to improve the health care system while improving the cost structure I think ISRG will be one of the benefactors.
UPDATE: ISRG closed today at $123.34, down -25.07, (-16.89%)
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.