Sunday, September 16, 2012

"Do a little align on your teeth and your portfolio by adding the stock of Align Technology (ALGN)"

Dow Jones Industrial Average 13,593 (UP) Week ending 09-16-2012

As you know, no matter what you do or how much milk
your kids drink, you will ultimately end up at the orthodontist
for your kids to have braces installed to straighten their teeth.

Align Technology Inc. (ALGN, $38.22) has a solution that seems to solve the problem which is less invasive and
also probably less expensive.

First of all Align has zero long term debt which is always a
nice feature for a company. 2012 earnings per share is projected at $1.22 per share and for 2013,  $1.38 per share.
5 year sales growth has been 13.75%. Projected long term earnings growth is 21.76%.

Align Technology has their much recognized marketing brand name , "invisalign", which has defined this industry and the trend of moving away from the traditional metal brace appliances.The company has a 17.93% Return on Equity.

The company has had a One year Total return on the stock of 122.86% and a 3 year total return of 179.39%.  The stock has a PEG ratio of 1.63 here , so it is a little pricey with a forward PE (Price to Earnings) ratio of 31.59%. You might want to be patient and wait and see if you can get a better price in October when the market usually corrects a little bit. The company also runs at a very healthy 73.79% Gross Margin, so they have allot of profit going into the financials to make their way to the bottom line.

The company did about a 1/2 billion dollars in sales in 2011 ,so it is a small-cap stock heading towards being a small- mid-cap company. 

I see lots of room for growth here so consider it a 1 to 3 year holding in your portfolio.

I gotta run, hope you and your family are well,

(I missed last week because I was traveling to Washington, DC.)


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