ISRG

What If You Joined Valuentum on January 1, 2013 and Followed Our Transaction Alert Emails…

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Let’s get this out of the way first: we’re not perfect. Though investors can look at our track record over a longer horizon to great satisfaction, as the Best Ideas portfolio (click here) and Dividend Growth portfolio (click here) are doing quite well for long-time members, what about new members that may have joined recently? How would they have fared by following our transaction alert emails? Would they have made money on our ideas? Before we answer these questions, let’s walk through a few ways members use our services. Many like to replicate the actively-managed portfolios that are housed in the monthly newsletters in their personal accounts in their entirety. Others like to use our transaction alert emails for incremental … Read more

Surveying Fourth Quarter Earnings at Health Care Firms

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The broader equity markets have been under pressure for much of January, and while it may be tempting to consider completely exiting stock investing for a time, we’re staying the course with both of our actively-managed portfolios. We had been expecting a contraction in price-to-earnings (P/E) multiples across the broader market (see our outlook here), and the performance thus far in 2014 has not been surprising. In case you may have missed it, I sent out some very important thoughts over the weekend to keep in mind as uncertainty and volatility increase through the course of 2014: Stay focused on @Valuentum portfolio holdings (best ideas), #asset allocation (cash) in portfolios and #prudence in allocating new capital. — Brian Nelson, CFA … Read more

Intuitive Surgical Surges Back to Life

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The maker of the da Vinci Surgical System, Intuitive Surgical (ISRG) has been under a tremendous amount of equity pricing pressure following a short attack and controversial comments from the American Congress of OB/GYN (ACOG) president James T. Breeden. We think Intuitive Surgical has managed well in what we’d describe to be a “perfect storm of negativity.” On Tuesday, Intuitive Surgical revealed a sense of resiliency when it issued preliminary fourth quarter and full-year 2013 results. The company noted that it expects revenue for the fourth quarter to fall just 5% from the fourth quarter of 2012, a huge win for a company that has been pummeled from almost every direction. For the full year, the company expects total revenue to advance 4%. Intuitive … Read more

Has the Time for Robots Finally Arrived?

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The 1980s were filled with ideas that robots would take over our personal lives. There was, of course, The Terminator, which ingrained a sense of fear within society about the potential dangers of advanced robotic use. But there were other “friendlier” movies, too. Who could forget the beloved ‘Johnny 5’ in Short Circuit or Paulie’s robot “girlfriend” in the fourth installment of the Rocky series? Unlike depicting a robotic assassin from a post-apocalyptic future, these movies showed the humanization of robots with feelings like fear and love. Are we now re-living a bout of 1980s nostalgia, with Amazon (AMZN) and UPS (UPS) recently talking about unmanned flying drones delivering packages to consumers’ door steps? It’s probably not too far of … Read more

The Curious Cases of Intuitive Surgical and Teva Pharma: What We Have Learned

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Within every portfolio, there will be a couple companies that do not live up to immediate expectations. Two such companies in our Best Ideas portfolio that haven’t yet delivered on our theses are Intuitive Surgical (ISRG) and Teva Pharma (TEVA). We hold the Healthcare Select SPDR ETF (XLV) in the Best Ideas portfolio as well (it has been a top performer) and our healthcare picks—Johnson & Johnson (JNJ) and Medtronic (MDT)—have performed wonderfully in our Dividend Growth portfolio, but we’re still waiting for our theses to be confirmed with respect to Intuitive Surgical and Teva Pharma. Before we go any further, however, we think it is important to reiterate that the size of the weighting of a position in our … Read more

MAKO Receives a Tremendous Offer from Stryker; Is Intuitive Surgical Next?

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The M&A flurry continued Wednesday morning as medical devices giant Stryker (click ticker for report: ) announced it would acquire MAKO Surgical (MAKO) for $30 per share, or roughly $1.65 billion. The deal represents an 83% premium to MAKO’s Tuesday closing price, but the value remains below MAKO’s peak in late 2011 and early 2012. MAKO remains unprofitable, though the firm has experienced solid revenue expansion during the past few years, going from $34 million in revenue during 2009 to $103 million during 2012. The firm isn’t expected to earn a profit in 2013, though revenue is estimated to jump 23% from the year-ago period. Given existing conditions, MAKO might not turn a profit until at least 2015, in our … Read more

Intuitive Surgical Reduces Its Outlook Amid Regulatory Concern

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Thursday afternoon, medical device maker Intuitive Surgical (click ticker for report: ) reported weak second quarter results and reduced its full-year outlook. Revenue jumped 8% year-over-year to $579 million, falling short of consensus expectations. Earnings per share increased 4% year-over-year to $3.90, below consensus estimates. Of course, these headlines are no surprise after the company pre-announced weak results earlier this month. We’ve of the firm but are sticking with our small position in the portfolio of our Best Ideas Newsletter. The big news in the press release was the extremely bearish revenue guidance given by management. After announcing first-quarter results, the firm provided a revenue growth outlook of 16%-19% for fiscal year 2013. With the market for da Vinci systems … Read more

Core System Sales Slowed at Intuitive Surgical

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Shares of da Vinci surgical systems maker Intuitive Surgical (click ticker for report: ) fell in after-hours trading Monday afternoon after the company released weak preliminary results. Fiscal year 2013 second quarter revenue is expected to be 7% higher than the same period a year ago at $575 million—well below the consensus estimate calling for $630 million. Net income is expected to be marginally higher at $160 million compared to $155 million during the same period last year. This net income figure implies earnings per share in the $3.85-$3.87 range, well below consensus estimates calling for $4.29 per share. Management was quick to blame other parties, saying on the press release:  “The slowdown in benign gynecologic procedures reflected a number … Read more

Why Valuentum’s Email Transaction Alerts Are Worth Paying Attention To

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Valuentum subscribers have noticed that we’ve been quite busy as of late, adding protection to our portfolio in the form of a broader-market put option and taking some large profits in Astronics (ATRO) and eBay (EBAY). We’ve highlighted our best-in-class hit rate–meaning that a large percentage of the firms we added to the portfolio are outperforming the broad market benchmark. But there are a couple ways of looking at our performance–the first is relative outperformance versus the market since inception, which is at 28 percentage points. Investors duplicating our portfolio are enjoying this outperformance. Another way of looking at our track record, however, is to evaluate the performance of additions to the portfolio on the long side (purchases) since inception–i.e. … Read more