Medicine that Scales

Andy Kessler recently said in an interview "It is doctors that are the problem with medicine. Why? Because they are human (after all), and humans donÂ’t scale, they get more expensive. The trick is to embed their knowledge and expertise in silicon and software and algorithms and deliver it cheaper every year."

After reading that, I instantly thought of among my favorite momo's - INTUITIVE SURGICAL (NasdaqGS:ISRG) - about one-fifth of doctors not using the DaVinci said they would like to but did not have practical access to a DaVinci device despite the hospital having a machine, which Piper Jaffray analyst Timothy B. Nelson said suggests potential future sales.

Valuation isdefinitelyy lofty, but the company continues to beat analyst estimates and at $1 million per machine, the company only has to sell 1000 Da Vinci's to do a billion in sales. With that kind of potential, I'm buying and holdinguntill the story is folding.


DISCLOSURE: I maybe long the stocks mentioned above for myself and clients. Not a recommendation to buy or sell any security. The information above has been obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The author and affiliatess shall have no obligation to update or amend any information contained above. For informational and educational purposes only.

ATI should beat on Wednesday

TITANIUM METALS CORP (NYSE:TIE) reported better then expected earnings today. ALLEGHENY TECH NEW (NYSE:ATI)is a more consistent producer with more conservative estimates. Given the current demand for titanium based on TIE's reported quarter, I am willing to say with a high degree of probability that Allegheny will beat on Wednesday.

DISCLOSURE: I maybe long the stocks mentioned above for myself and clients. Not a recommendation to buy or sell any security. The information above has been obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The author and affilates shall have no obligation to update or amend any information contained above. For informational and educational purposes only.

Playing the Heatwave

This is expected to be one of the hottest summers on record. People will be using their air conditioners which are known to consume alot of electricity. The clear winners in this case are the electrical utility companies. A few names I'm looking at are listed below.

AVISTA CORP (NYSE:AVA)
EMPIRE DISTRICT (NYSE:EDE)
F P L GROUP INC (NYSE:FPL)
MONTANTA DAKOTA UTIL (NYSE:MDU)
NISOURCE (NYSE:NI)
NRG ENERGY INC (NYSE:NRG)
PG&E CP (NYSE:PCG)
WESTAR ENERGY INC (NYSE:WR)
XCEL ENERGY INC (NYSE:XEL)

Earnings Plays for the Week of 7/17

This week is options expirations week and the start of earnings season, which creates good oppertunties for option plays ahead of earnings. I am looking at buying July out of the money calls for the following stocks.

SOUTHERN COPPER (NYSE:PCU) - 7/18
PLX TECHNOLOGY INC (NasdaqGM:PLXT) - 7/18
JEFFERIES GROUP INC (NYSE:JEF) - 7/18
C S X (NYSE:CSX) - 7/18
UNITEDHEALTH GROUP (NYSE:UNH) - 7/19
DXP ENTERPRISE (NasdaqCM:DXPE) - 7/19 - no options traded
ASML (NasdaqGS:ASML) - 7/19
GEN DYNAMICS (NYSE:GD) - 7/19
ORBITAL SCIENCES (NYSE:ORB) - 7/19
RADIAN GROUP INC (NYSE:RDN) - 7/19 - in the money calls
DECKERS OUTDOOR (NasdaqGS:DECK) -7/20
POOL CORPORATION (NasdaqGS:POOL) - 7/20
CHARLOTTE RUSSE HL (NasdaqGS:CHIC) - 7/20
GENTEX (NasdaqGS:GNTX) - 7/20 - in the money calls
JOHNSON CONTROLS INC (NYSE:JCI) - 7/20
RELIANCE STL & ALMN (NYSE:RS) - 7/20
STEEL DYNAMICS (NasdaqGS:STLD) - 7/20
FREESCALE SEMICONDUCTOR (NYSE:FSL) - 7/20
SKYWORKS SOLUTIONS (NasdaqGS:SWKS) - 7/20
SPANSION INC. (NasdaqGS:SPSN) - 7/20
WESCO INTL INC (NYSE:WCC) - 7/20
NOKIA (NYSE:NOK) - 7/20
HOKU SCIENTIFIC INC (NasdaqGM:HOKU) - 7/20 - stock maybe better then options
MCMORAN EXPLOR CO SC (NYSE:MMR) - 7/20
BRITTON & KOONTZ C (NasdaqCM:BKBK) - 7/20
CONTINENTAL AIRLINES CL B (NYSE:CAL) - 7/20
INFINEON TECH (NYSE:IFX) - 7/21 - in the money calls

DISCLOSURE: I maybe long the stocks mentioned above for myself and clients. Not a recommendation to buy or sell any security. The information above has been obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The author and affilates shall have no obligation to update or amend any information contained above. For informational and educational purposes only.

Growth VS Value

My issue with valuing investing has always been that its based on rearview investing, and most studies favor value over growth mainly because they have been done in hindsight with data flawed by survialship bias.

I decided to compile a small list of growth and value companies by sector, and will revist their performance at a later date, this way we can avoid the flaws that come with testing in hindsight.
TECHNOLOGY
GOOG (P/E 70) vs MSFT (P/E 18)

BEVERAGES
HANS (P/E 56) vs KO (P/E 20)

BUILDING PRODUCTS
VMC (P/E 20) vs LPX (P/E 5)

RETAIL
SHLD (P/E 23.5) vs WMT (P/E 17.6)

PHARMA
KG (P/E 40) vs PFE (P/E 14)

INVESTMENT FIRMS
SEIC (P/E 24) vs GS (P/E 8.6)

COMPUTER EQUIPMENT
HPQ (P/E 24.5) vs IBM (P/E 14.6)

TELECOM
Q (P/E -35 (negitive EPS)) vs VZ (12.8)