Next up, a full copy of your DNA and analysis of it. This venture could save lives or drastically improve them with faster results.
On the China front GOOG has about 25.9% versus BIDU’s 60% Q4 market share for search engines. YHOO has a 9.6% share and could be a strategic asset on this front if YHOO decided to forgo their search endeavors and align themselves with GOOG.
These metrics are from a consulting company called Analsys International.

The key technical level to watch are GOOG’s 50 week MA at $551.64. This moving average has been a major uptrend support line for the past two years. A sustained breakdown and violation of this major trendline could technically end the uptrend.

The Incredible ISRG
ISRG reports after the bell on Thursday with GOOG, very fitting as both will be super volatile. I’ve known about the story for ISRG for a long time. Their da Vinci machines are out of a sci-fi novel and are truly one of man’s greatest examples of the progression of technology in the medical field IMO. The price of the machines are high, the services and parts to maintain it are expensive and recurring, there is no competition and the global demand, marketplace and patient population growing. What’s not to love? There are some fund managers and institutions who are saying that this is ISRG’s year (it has been for years now). If ISRG starts really penetrating the global marketplace steady sustainable long term growth will occur. If you don’t know the story of ISRG and feel your too late and the stock too high, do your due diligence and you will find out there is only so many million dollar machines they can sell but thats not the real story about the Incredible ISRG. The story is in the expensive maintenance and the high profit margin replaceable parts that will act as a revolving door into the Incredible ISRG coffer. The more machines you sell, the higher future exponential growth in revenues you should incur. BUT it is a win-win-win-win situation, ISRG wins because of adoption and recurring revenues, hospitals win and are made more profitable by using the machines in many ways(more surgeries, high patient turnover, more efficient surgeries and ease on doctors), patients win due to less recovery time, smaller incisions with less scarring, improved healing time, etc., and of course insurance companies who are made more profitable due to less complications and shorter recovery times meaning lower in-hospital patient costs and shorter stays.

ISRG is suppose to bring in $1.04 a share this quarter with $175.36 million in revenue. High estimates are at $1.08 a quarter and $179 million in revenues. They have beaten the heck out of earnings for the past four quarters. Current growth estimates for this quarter YoY is 67.7%. On Jan. 8th, Wachovia downgraded ISRG from Outperform to Market Perform saying they believed the shares were fully valued and notes that the company may guide 2008 below consensus. They believed the expectations were too lofty and that hospital capital spending might be at risk this year. If this comes to fruition and they do pull an AAPL, they will get a haircut. Machine sales is the key metric in this week’s report. On Jan. 4, Zack’s came out with an update on ISRG maintaining a Hold rating. They also issued this comment,

“Without direct competition, ISRG’s main challenges to growth are overcoming the capital investment challenges and gaining physician adoption for each procedure specialty. At its current price of $323.95 per share, ISRG is trading at roughly 68x our 2008 EPS estimate and at roughly a 1.7x P/E/G on 2008 EPS, which is at a significant premium to the average peer group multiple of roughly 33x 2008 EPS and at a premium to the group 1.5x P/E/G. A significant premium is warranted on a P/E basis given the company’s growth prospects relative to its peers and lack of direct competition. We believe at this stage the majority of these growth prospects are already reflected in the company’s stock price. If financial results fail to meet growth expectations, the stock price could be negatively impacted. We believe the stock is fairly valued at roughly 73x our 2008 EPS estimate, or at roughly a 1.8x P/E/G on 2008 EPS. Our price target remains at $345 based on roughly 73x FY08 EPS estimate.”

If they thought it was fairly valued at $325 I bet they like it here and on great earnings at $269! The P/E ratios show growth and possible justification in their growth EPS estimates. ISRG will be a big mover no doubt. It really wouldn’t surprise me to see it move 30 points or more after earnings up or down. The biggest reason for its volatility is due to the float size of the shares at 37 million. They could split the stock and that could cause a short squeeze with great numbers and guidance. On a side note, in the chat room I was asked about short squeezes and what I look for. I look for a catalyst (earnings or news) and also a small stock float (under 100 million roughly, the lower the better) with a high short interest (above 5%, the higher the better) and high short ratio (above 3, higher is better), these a really rough estimates and each case is different. It also depends on price/action volume (no volume, no squeeze). Depending on the market environment I might do an even weighted strangle after hopefully a successful pre earnings play if it materializes. Other high level traders in the chat room could do more complex option plays.

The Marvelous MA
Cue ABBA’s Mamma Mia…Mastercard has been a darling for investors and has held up fairly well during the recent market downturn. MA reports Thursday before the bell. MA is estimated to bring in $0.71 a share and $983.24 million in revenues. High estimates are for $0.89 a share with possibly $1.03 billion in revenues. They have obliterated earnings four out of the last four times. It seems analysts have had a hard time counting all the money. COF and AXP warnings have put investors on alert though but those could just be company specific problems. On Jan. 11th, Deutsche Bank lowered their price target from $250 to $200 due to the AXP warning saying it expects likely near-term multiple pressure on MA shares. UBS on the other hand came out the same day and said many of AXP’s problems are company specific and that MA has no consumer credit risk and is a more globally diversified company.
Another noteworthy event happened the day before as Fidelity Investments lowered their passive stake in MA from 12.3% to 5.23%. But the most telling note IMO was on Jan. 8th by Calyon. Calyon made comments to clear up these misconceptions in the market about MA and said that MA is not in the lending business and does not issue cards and that banks use them to process transactions. MA has no credit risk or lending-related credit exposure. MA is not losing share to AXP and the foreign exchange is actually a benefit. Calyon is right, MA doesn’t issue credit cards, they simply process them and debit use has grown greatly and MA benefits from that trend but a consumer slow down and a sluggish holiday season could be the factor that either lowers guidance going forward or hits earnings performance now. MA’s technicals look great in the face of this vicious market selloff and I will be looking for a good strangle position going into earnings hopefully with a good pre earnings run beforehand.

ICE, ICE Baby!
ICE is just an incredible flexible marketplace. ICE reports earnings Thursday before the bell. ICE is expected to bring in $0.92 per share and $154.22 million in revenue. High estimates are for $0.95 a share and $159.5 million in revenues. ICE has largely met or exceeded consensus estimates for the past year. Volatile moves in gas prices and commodities bodes very well for future revenue growth and ICE’s management is one of the best in the biz. ICE’s mangement is very experienced and saavy and still looks to cut costs in many ways to streamline their revenue to profit. They are always looking for an accretive strategic alliance or buyout and reminds me of a restless shark. I remembered how management made CME pay up for CBOT even though there was only a remote chance that they would have been successful in attaining CBOT. A thorn in CME’s side for sure. On Jan 17, 18 and 21st, ICE futures established new electronic and exchange-wide volume records for three consecutive days. That is a great trend to start the new year and quarter for possible guidance. Although on Jan 17th, Wachovia issued cautious comments regarding monthly activity with lower volume by banks due to lower proprietary activity, followed by the next day with Goldman removing ICE from its Conviction Buy List but maintaining their Buy rating. NMX and ICE are constantly talked about as potential buyout targets for NYX, which is still looking to grow. ICE has shown volatility to earnings and to news and this week should be no different.

The Voracious VMW
VMW is expected to bring in $0.24 a share and $417.37 million in revenue. High estimates are for $0.28 a share and $435 million in revenues. VMW is announcing earnings on Monday after the bell. VMW is so dominate in their market it is estimated to own over 80%.