Surgical robot manufacturer Intuitive Surgical (NASDAQ: ISRG )
has committed the cardinal sin for high-multiple growth stocks -- the
growth has stopped. Investors need only pull up a chart of Heartware or Edwards Lifesciences
to see what happens when the music stops and growth investors can't
find enough chairs. Intuitive is going to need to show convincing
improvements in system placements and procedure volumes to regain the
Street's love. Unfortunately, I think that will take a few quarters at a
minimum.
I feel like I am in a strange place with Intuitive. Above $450 a
share, where the stock has spent most of the past two years, I thought
the shares were overvalued and that almost everything had to go right
for the stock to work from those levels. Although I wouldn't go as far
as to say that Intuitive has been beaten into a value stock, I do
believe that robot-assisted procedures are here to stay and that
Intuitive has a major lead on any prospective rivals. Moreover, with
growth harder to come by in the device world these days, maybe Intuitive
could actually find itself in play if the stock languishes further.
Please read the full article here:
http://www.fool.com/investing/general/2013/10/18/intuitive-surgical-in-the-penalty-box.aspx
No comments:
Post a Comment