Fear Shakes Up Intuitive Surgical's Stock

Shares of medical robotics maker Intuitive Surgical (NASDAQ: ISRG  ) are in free-fall today after yesterday's earnings, with the stock plummeting 4.7% after losing a bundle yesterday as well. Earnings aren't the disappointment, however: Intuitive destroyed analyst expectations and showed solid growth in both procedures and device sales. Investors haven't been so kind to the stock, however, and with shares of the company down almost 8% in the last five days alone, it's time to ask: Why is everyone selling this stock?

Investors in a panic attack
The company's financial footing certainly isn't the culprit. Intuitive drilled earnings-per-share expectations, topping projections by $0.58 and beating revenue estimates by almost $30 million. The firm also racked up double-digit growth in both categories over the quarter a year ago, including growth of more than 30% in EPS.

So, what's really behind Intuitive's fall? It's fear.

The company has been in the spotlight recently with concerns mounting about the safety of robotic surgery. Shares weren't helped when the Food and Drug Administration announced it would investigate the company's da Vinci surgical device's complaints, looking to evaluate if the costly machine (da Vinci devices cost around $1.5 million each) added any value over traditional surgeries. That was enough to spark fear among investors, who have panicked over the thought that robotic surgery could come under fire by safety regulators. The FDA's investigation isn't an indictment, however; it's simply a follow-up on complaints.

Yet when we examine the claims more closely, it's too early to pin the blame of surgical complaints on Intuitive. The company went to trial recently over the first of several lawsuits over the da Vinci, and details are emerging that Intuitive has warned physicians about the type of patients operated on with the device. Intuitive also recommends the device for sufficiently skilled surgeons, and while at least one witness has argued that the company targeted surgeons with limited skills, for now it seems just as likely that physician failure, rather than the device itself, is responsible for da Vinci injuries.

Furthermore, the number of injuries and deaths attributable to the da Vinci is minute compared to how many operations the devices have performed. The system performed more than 300,000 operations last year alone and around 1.5 million since 2000. While justifying deaths on an operating table is never acceptable, fatalities happen in robot-assisted and traditional surgeries alike due to complications and over adverse effects.

Overall, investor fear over the da Vinci's negative PR shouldn't outweigh what this company's done in terms of growth. Between growing procedures at a steady clip (Intuitive saw 18% procedural growth last quarter despite the negative spotlight) and increasing both its top and bottom lines, Intuitive's performed as well as any major company in the health care field recently. Don't let fear drag down your investment: Intuitive's dip is a great opportunity to buy into a standout company for less.

Are stories of Intuitive's demise greatly exaggerated?
Recently, some investors have questioned Intuitive Surgical's future. However, Intuitive Surgical expert Karl Thiel believes a visible path to long-term growth persists. Will Intuitive capitalize, or be crushed by unforeseen pitfalls? His report highlights all of the key opportunities and risks facing the company -- and includes a full year of ongoing updates as key new hits -- so be sure to claim your copy by clicking here now.

William Hill Hails Grand National "Major Success"

LONDON -- The shares of William Hill  (LSE: WMH  ) rallied 5% to 410 pence during early London trade this morning after revealing net revenue was 15% higher for the first quarter.

William Hill, the U.K.'s largest bookmaker, delivered an 8% improvement in operating profit from last year, boosted by such "good sporting results" as the unlikely Grand National winner, Auroras Encore.

Mobile and online revenues continue to drive the company's growth, expanding by 21% from last year, as punters rushed to download William Hill's mobile app 96,000 times during the Grand National and Cheltenham combined. With operating profits of 43 million pounds, the segment now represents 45% of the group's operating profits, 13% higher than last year.

While revenues at the company's brick-and-mortar betting shops were marginally higher on an adjusted basis, operating profits declined 3%, mostly due to a higher tax charge hiking operating costs by 5%.

Chief executive Ralph Topping commented:

It has been a successful start to 2013 in trading terms, moving forward with our strategy, expanding into Australia and taking full control of William Hill Online.

Cheltenham results were not as good for us this year but just after the quarter end, Auroras Encore made the Grand National a major success for William Hill, even beating our record win achieved on the race in 2009 when Mon Mome romped home at 100-1. Both of these big meetings proved to be significant attractions for mobile bettors.

With a market cap of 3.5 billion pounds, William Hill trades at just under 13 times expected earnings and on a prospective dividend yield of 3.2%.

Of course, whether the economics of the U.K. betting industry are attractive, or the shares are still reasonably priced after today's price increase, is something only you can decide.

However, if you already own William Hill shares and are looking for another attractive growth opportunity, this exclusive in-depth report reviews a solid possibility within the FTSE 100.

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