Intuitive Surgical (ISRG) is an undervalued equity whose position in the medical device industry places it for prime appreciation in the years to come. Taking a conservative estimate of 13% EPS growth (far less than current rates) and a 21 P/E  (far less than historical), the stock which is presently trading in the low $90’s at a P/E of 17.7 should  approach $225 by 2014. This would represent an annual appreciation of 20%.  

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One of the problems with many companies today is that their business model has been broken.  No one is quite sure how the Goldman Sachs’s of the world are going to return to their previous sky high profit (and bonus pool…) with the new era of increased regulation and oversight.  And I have frankly still not heard a convincing argument for the viability of the large car manufacturers or their suppliers.  Even the proverbial king of American capitalism, General Electric, appears to only be able to come up with half-hearted responses where their business model of the modern conglomerate is called into question.  All of this could make even the most confident CEO question his or her own business model, unless of course you see no end in sight for the demand of a product you sell.  This is exactly the situation that Portfolio Recovery Associates finds itself in.  Yahoo finance summarizes their business as follows,

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There are two reasons to be weary of going long gold at this point as an investment. The first is that not only are the financial commentators prodding the public but so too are commercials on nearly every channel. This is the quintessential example of what should raise an investor’s eyebrow.  The second is that gold has formed the typical double top at $1,000 as shown on the GLD chart.

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Rick Santelli’s Rant