ISRG

Shares of Best Ideas Newsletter holding Intuitive Surgical (click ticker for report: ) are experiencing some relative weakness today after negative commentary from the American Congress of OB/GYN’s president questioned the cost effectiveness of robotic surgery. To read more, please click here. We identified this as the major risk for the company going forward, and we’ll be keeping a tight leash on the position going forward. Momentum is working against the company at this time, and the fundamental position could deteriorate. Still, we like the long-term trend at work for robotic surgery, even if there are some near-term headwinds.

Shares of Intuitive Surgical (click ticker for report: ) plunged in trading Thursday afternoon, but recovered much of the loss Friday morning after the FDA announced it was launching an investigation into issues arising from use of the da Vinci systems. The FDA sent surveys to several hospitals, and it is looking to determine whether a rise in incident reporting from robotic surgeries is an issue with the system, the patient, or the surgeon. From initial reports, it appears that few of the issues have originated from robotic malfunction, but rather from user error. We also think it’s important to note that Intuitive Surgical hasn’t experienced any increase in the already small death rate. While it appears the firm is … Read more

After reports from short sellers claimed growth was slowing at Intuitive Surgical (click ticker for report: ), the company’s fourth quarter performance provided evidence to the contrary. Revenue advanced 23% year-over-year to $609 million, handily exceeding consensus expectations. Earnings were also better than anticipated, growing 13% year-over-year to $4.25 per share. Earnings trailed revenue growth due to a substantial increase in the firm’s tax rate. Gross margins fell during the quarter, down approximately 110 basis points year-over-year and 60 basis points quarter-over-quarter to 71.9%, but it’s hard to complain about the decline when gross margins are so strong. Some of the margin compression resulted in a revenue shift to lower-margin services (a benign mix shift), as well as older da … Read more

To read the full report, please click the link below. We’re not budging with our position. “Short-seller” reports are quite common, but they can and do impact a firm’s price in the near term: http://www.citronresearch.com/wp-content/uploads/2012/12/isrg-final.pdf

Medical device maker Intuitive Surgical (click ticker for report: ) reported strong third quarter results Tuesday after the market close. Revenue surged 20% year-over-year to $538 million, roughly in-line with consensus expectations. Earnings surged 46% year-over-year to $4.46 per share, but after adjusting for a one-time tax benefit, they grew about 16% to $3.54 per share—still slightly better than expected. The firm’s performance was consistently strong across all segments, with Instruments and Accessories growing 24% year-over-year to $218 million. Procedure growth during the quarter was 22% thanks primarily to an increased number of gynecological procedures performed in the US. However, the pace was negatively impacted by a decline in US prostatectomy procedures and slowing growth in Europe. The pressure in … Read more

Surgical device maker Intuitive Surgical reported another strong quarter on Thursday.

Intuitive Surgical (), one of the more well-known momentum firms on the market today, reported excellent first-quarter earnings after the close Tuesday. We don’t view the firm as yet a ‘Valuentum’ stock (a style of investing that we ascribe to) as it has yet to reach a valuation that we find attractive. We’re sticking with our fair value estimate for Intuitive Surgical at this time. << More on ‘Valuentum’ Investing The robotic medical-equipment firm, best known for its da Vinci Surgical System (click here), reported first-quarter 2012 revenue of $495 million, which advanced an impressive 28% from the same period a year ago (consensus was at $477 million). The key drivers continue to be higher robotic procedure adoption and higher … Read more