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Align Technologies Was One of 2017’s Best Stocks

Stock (Symbol)

Align Technology (ALGN)

Stock Price

$225

Sector
Healthcare
Data is as of
January 2, 2018
Expected to Report
Jan 30
Company Description
Align Technology, Inc. designs, manufactures and markets a system of clear aligner therapy, intra-oral scanners and computer-aided design/computer-aided manufacturing (CAD/CAM) digital services used in dentistry, orthodontics and dental records storage. Source: Thomson Financial.
Sharek’s Take
David SharekAlign Technology (ALGN) is truly on fire. The stock was less than $100 a year ago and is now $225 (wait it was $225 when these charts were done 9 days ago, it’s $248 now). Align is the company that designs and manufactures Invisalign clear braces and iTero scanners, which dentists use to scan teeth for a fitting. Here’s some highlights from last qtr:

  • Sales growth of 38%, profits up 58%
  • 69,800 Invisalign shipments to teens, up 46% year over year
  • iTero scanner revenue up 25%

Align also supplies clear aligners to SmileDirectClub, and has a 19% stake in the company. SmileDirectClub is an at-home doctor-directed program which is less expensive than the regular routine. And three qtrs ago ALGN launched a lighter version of its braces, called Invisalign Light, which includes up to 14 stage aligners vs 40 or more sets in Invisalign when teeth are more crooked. This could prove to be a future catalyst for a company that doesn’t seem to need it. ALGN is flying higher, but now has a P/E of 51 (that’s as of 1/2 when these charts were done). The stock’s gone parabolic and it’s dangerous to buy a stock after such a strong run, thus I have ALGN on my radar for the Growth Portfolio and I’m dying to buy in.

One Year Chart
I’ve been watching this stock for more than a year, and almost bought when it was in the $90s. But notice how profit growth wasn’t great a year ago. The stock took off before the profits did. In fact, the company missed estimates 3QtrsAgo. Then it beat the street big time the last two qtrs. Last qtr’s profits were expected to climb 27% and jumped 58%. Qtrly Estimates are for 43%, 49%, 26% and 19% profit growth. But I bet the company beats.
Fair Value
Just last qtr I mentioned maybe the company could make $5 next year (2018), and a P/E of 45 on that figure would be a $210 stock. Boom! Plowed past that mark. What’s next? Maybe 2018 estimates soar from $4.43 to $5.51 and the stock is worth $250 this year? 2018 estimates did just jump from $4.07 to $4.43 in one qtr.
Bottom Line
Align Technologies is one of the best stocks in the market, but after a tremendous run the stock has gone parabolic and is dangerous to buy here. But I said that last qtr when the stock was $179. ALGN is one of the tops of my radar, but I feel we need a stock market correction for this stock to fall to a buyable level. ALGN is on the Growth Portfolio and Aggressive Growth Portfolio.
Power Rankings
Growth Stock Portfolio

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Aggressive Growth Portfolio

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Conservative Stock Portfolio

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