I’d like to Get Aggressive

Add to Your Intuitive Surgical March 115 Calls

By Bryan Bottarelli
Monday, February 06, 2006 11:38 AM EST
Mon, 6 Feb 2006 16:38:00 GMT

Dear Bottarelli Research Member,

I’d like to do something that involves taking on more risk for a higher potential gain.

Instead of getting stopped out on our Intuitive Surgical March 115 Calls (AXQ CC), I’d like to add onto the position.

At one point today, Intuitive Surgical was down $10.58 to $104.11. At the most extreme low, it dipped under $100.00, trading for $98.37 before quickly rebounding to close at $106.67.

This marks the second dramatic day of losses for the maker of robotic medical equipment. News reports credit the downside to forecasts of “sluggish sales in the current quarter.” But in reality, there’s no truth to that assessment.

As of their latest earnings announcement, the company earned $1.31 a share for the fourth quarter. That was way beyond the $0.49 analysts expected and the $0.32 it earned a year earlier. The shares are getting hit hard because the company failed to offer Wall Street any sort of raised guidance. Investors are taking this news as a weak short-term outlook, which is the wrong approach. In reality, Intuitive Surgical very rarely gives raised guidance, so I’m unclear why people were expecting it so much. Either way, I think we have another huge buying opportunity. So I’d like to get aggressive.

PLAY: Add to your Intuitive Surgical March 115 Calls (AXQ CC) at or under $5.00, good for the day tomorrow. This lowers your cost basis to $7.25. And remember, we have until March expiration!

Lock and load!

Sincerely,

Bryan Bottarelli

Bryan Bottarelli
Editor, Bottarelli Research

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