Columbine does purely quantitative "analysis." They downgraded it on both current P/E and forward P/E, with the latter based on Wall Street consensus. They also disliked the price to cash flow ratio.
Oddly, they considered price action to be neutral, because ISRG didn't show enough relative strength. Even though ISRG was up 243% over the past 12 month to the market's 6%, they risk-adjust the figures so it all washes out.
Usually I ignore Columbine, and all the other pure-quant research shops.
quant guys take all the emotion out by focusing on "just the numbers"...
the reality of that approach, in a pure vaccum vs hybrid of fundamental/tech and quantitative analysis, is that while it furnishes the opportunity filter/screen a huge number of companies without any emotion, it also doesn't require much thinking once you have set the screen parameters.
but that is where a thinking cap and a finance background (vs just math or gear-head approaches) adds otherwise unseen value to the investment arena. put simply, a quant screen focused on earnings growth and p/e ratios would likely filter out isrg on the lack of continuing high earnings growth 06 vs 05... because the quant screen doesn't read the footnotes, doesn't understand sfas #109 and the accounting treatment for net deferred tax assets, and wouldn't begin to consider the differences between cash flow and reported tax expense in isrg's lovely federal tax position.
i for one don't care if they and their myopically focused readers don't own isrg for a quarter or two -- we have enough flakes playing momentum and ibd charts!
"Oddly, they considered price action to be neutral, because ISRG didn't show enough relative strength. Even though ISRG was up 243% over the past 12 month to the market's 6%, they risk-adjust the figures so it all washes out."
So, does that mean 237% downside in the next 12 months?
<<On December 9, 2005 Columbine Capital Services, Inc. downgraded INTUITIVE SURGICAL, INC. - COMMON STOCK from FAVORABLE to NEUTRAL.>>
Yeah, they really hit the ball out of the park on that one. Thanks for the "warning".
Is that the firm where the analysts shot everyone up and then committed suicide?