Two stocks to watch today are Google and Intuitive Surgical (other than Goldman Sachs after the fraud accusation).
Intuitive Surgical reported spectacular results today far ahead of analyst expectations with earnings coming in at $2.12 per share compared to the expected $1.69. Intuitive has beaten expectations in 6 out of the last 8 quarters and more than tripled in a year. In spite of that it continues to remain a good investment as it continues to surpass expectations. The stock price was driven up a lot in anticipation of great earnings over the last couple of days. Suddenly after the report today the stock price has fallen nearly 5%.
Google also dropped over 6% in spite of beating analyst expectations because they plan to spend more aggressively to maintain their search lead. Google has also beaten analyst estimates in the past 7 quarters.
So what makes people drive down the stocks of companies that show repeated excellent performance. Why do investors question decisions form companies that have consistently done things right? The answer is because they can. Well, not really. The answer is that the stock prices are needlessly driven way up before earnings and that leads some investors to sell to take profits as soon as results are announced.
I put both these stocks at a buy and today with the negative tone that the market has taken might be a good time to get into either one.
Disclaimer: I own both stocks.