It’s Hard Being A Stalker
2.00am-ish Thursday Melbourne, Australia.
I’m up late stalking the Australian Dollar and ISRG. The price of both is attractive with Intuitive Surgical falling below a ton and AUD:USD at 0.66, but I’m looking for better. “They can be significantly cheaper” I chant. To reassure myself I glance at ISRG’s falling 2009 eps estimates. I resist buying, but place a limit order for both my prey before hitting the hay.
ISRG report their already announced earnings on the 22nd Jan. My plan is to wait for investor reaction to the earnings and guidance. I really prefer to see rising eps estimates, investors reacting positively to news and a rising share price. Three strikes for Intuitive Surgical, but its long term growth opportunity keeps ISRG at the plate.
Downside: Two bad quarters in 2009, market down. EPS falls to $4 and multiples compress for price of $60.
Upside: Three years $300 at a stretch. Call it a $80-220 probable range over three years. That’s a 6/1 reward risk setup, but ONLY based on my rough estimates.
More on ISRG. http://www.fusioninvesting.com/tag/isrg/
I do not own any ISRG or derivative. But I am now long my second AUD carry trade. So expect me to trash talk the temporarily inflated, destined to fall USD.
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