I follow quite a lot of companies, so the usefulness of a watchlist to me cannot be overstated. Without my watchlist, I’d be unable to keep up on my favorite sectors and see what’s really moving the market. Even worse, I’d be lost when the time came to choose which stock I’m buying or shorting next.
Today is Watchlist Wednesday, so I’m discussing three companies that have crossed my radar in the past week — and at what point I may consider taking action on these calls with my own money. Keep in mind that these aren’t concrete buy or sell recommendations, nor do I guarantee I’ll take action on the companies being discussed. What I can promise is that you can follow my real-life transactions through my profile and that I, like everyone else here at The Motley Fool, will continue to hold the integrity of our disclosure policy in the highest regard.
I know I’ve highlighted Intuitive Surgical, Inc. (NASDAQ:ISRG) as a Watchlist worthy stock previously, but following yesterday’s out-of-the-blue revenue warning I think investors would be foolish not to add the robotic surgical device maker to their Watchlist if they haven’t done so already.
While I’m not advocating buying or selling Intuitive Surgical, Inc. (NASDAQ:ISRG) here, I think it’s a groundbreaking stock for both optimists and pessimists to keep their eyes on.
For current and prospective shareholders in the company, Intuitive Surgical, Inc. (NASDAQ:ISRG) offers a revolutionary method of minimally invasive soft tissue surgery that’s been shown in certain studies to be as effective as traditional laparoscopic surgery while also requiring, on average, less recovery time in the hospital. Because of its unique niche, Intuitive Surgical, Inc. (NASDAQ:ISRG) is able to command unheard of pricing power for its da Vinci surgical system, it’s healthfully profitable, and it’s based in the health-care space, which is only expected to see a boom in demand as the baby boomer population ages. In that respect, yesterday’s drop could make for an incredible buying opportunity.
On the flipside, skeptics have a lot of reasons to be licking their chops, as I pointed out yesterday, primarily because of what I believe are the uncertainties associated with the Patient Protection and Affordable Care Act, a.k.a. Obamacare. Questions about Medicare reimbursement rates for hospitals, as well as whether or not uninsured individuals will understand how to get the subsidized health care that the PPACA will entitle them to, has hospitals skittish about spending big money on expensive machinery. Likewise, insurers aren’t likely to approve more expensive robotic procedures until they’re certain they get a new influx of members under the Obamacare Medicaid expansion.
What’s more, what goes for Intuitive Surgical, Inc. (NASDAQ:ISRG) likely goes double for MAKO Surgical Corp. (NASDAQ:MAKO), a robotic surgical device maker for orthopedic knee and hip procedures. Because MAKO Surgical Corp. (NASDAQ:MAKO) is currently unprofitable the boom and bust it could experience because of its unique niche versus the effects of Obamacare could really be a huge catalyst. Take clues from MAKO Surgical Corp. (NASDAQ:MAKO)’s management as another indicator of where Intuitive may head next and keep your eyes fixated on Intuitive’s July 18 report.
If you’re looking for an intriguing short-sale idea where you just might beat everyone else to the punch, consider digging a bit deeper into memory chip specialist Micron Technologies.
For Micron Technology, Inc. (NASDAQ:MU), things are going well. The company crushed Wall Street’s expectations in the third quarter with its first profit in quite some time on the heels of a six percentage point boost in gross margin. Yet for memory companies, the time to run away is precisely when everything seems to be going their way.