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Investing.com -- On Monday, Wolfpack Research, a firm known for its short-biased research, has expressed a favorable stance on Intuitive Surgical (NASDAQ:ISRG), a developer of robotic-assisted technologies. The research firm’s bullish view is based on Intuitive Surgical’s recent announcement of a significant increase in its stock repurchase program.
Intuitive Surgical has declared that it will buy back up to $4 billion of its own stock, effectively tripling the size of its existing buyback program. This move by Intuitive Surgical is aimed at enhancing shareholder value.
Wolfpack Research’s positive outlook on Intuitive Surgical is also influenced by the company’s decision to insource the production of surgical drapes. This move has implications for UFP Technologies, a company that has relied heavily on Intuitive Surgical as its biggest customer.
The research firm pointed out that UFP Technologies’ dependence on Intuitive Surgical for growth was never a sustainable strategy. Given Intuitive Surgical’s scale and desire to improve margins, the decision to produce surgical drapes in-house is a logical one. This change in strategy significantly reduces any leverage UFP Technologies had with Intuitive Surgical to drive its own growth.
While Intuitive Surgical’s management team is investing in the company’s future and enhancing value for shareholders, UFP Technologies’ insiders, including the CEO and CFO, have sold $48 million worth of their own stock.
This shift in Intuitive Surgical’s strategy, coupled with the increased stock repurchase program, has led Wolfpack Research to take a long position on the company. The research firm’s stance is based on the belief that Intuitive Surgical’s actions demonstrate a strong commitment to improving its financial performance and shareholder value.
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