ALIGN TECHNOLOGY (ALGN) INVESTMENT THESIS
Align Technologies is the provider of the Invisalign aligner system and one of the most recognized brands in the dental and orthodontic market. The company takes a uniquely aggressive strategy, in a conservative industry, to drive consumer
demand through integrated direct to consumer marketing programs leveraging traditional media, search, digital marketing, PR and social media to engage consumers and grow adoption.
INVESTMENT THESIS
The Investment
Thesis for Align Technology focuses on four strategic growth drivers
1. INTERNATIONAL EXPANSION
2017 Invisalign volume increased 52.3% over 2016 with central/Eastern Europe, Middle East and Africa Region up 42.9% and Asia
Pacific 63%. A manufacturing plant is being developed in China.
2. INCREASING ORTHODONTIST USE OF INVISALIGN
The company is growing its product offerings such as the introduction of an aligner which combines all the benefits
of the clear aligner system with features for moving the lower jaw forward, while simultaneously aligning the teeth.
3. ENABLING GP DENTISTS TO TREAT AND REFER MORE INVISALIGN CASES
iTero is Invisalign’s oral scanner which
allows dentists to assess and treat patients, where orthodontists have traditionally maintained treatment through corrective devices.
4. GENERATING CONSUMER DEMAND AND CONNECTING THEM WITH AN INVISALIGN DOCTOR
The
company has a direct to consumer marketing program focusing on teens and moms. Two Invisalign stores have been opened in the US with additional stores planned, to educate consumers on how Invisalign works and show them a scan of how they
might look with straighter teeth and connect them with a doctor.
Invisalign also owns 19% of SmileDirectClub which allows consumers to bypass doctors and order direct.
What does that mean at MONEYWISEHQ?
Align Technologies has been a stock with a 36% revenue growth rate, international expansion, a disruptive technology and an aggressive marketing strategy to attract consumers. The company offers a simpler, more convenient and affordable
option to an increasing patient demographic. It is estimated that 300 million people could benefit from Invisalign treatment and the company has less than 10% of global market share.
The Health Sector encompasses a very broad range
of companies from hospital services, drug providers, surgical equipment and even orthodontics. Align is considered a 'growth stock', which by it's nature carries a higher level of price volatility than more conservative Health related
companies.That price volatility also provides the potential for big rewards or the opportunity to increase returns through strategies such as Trading Around a Core Position, Channel Trading or Catalyst Investing. A successful trader
has to be aggressive to make money, but if you are not defensive, you won't keep your money and that is important when investing or trading growth stocks so always carry a 'Stop Loss' price.
Align offers a niche product and service
with first mover advantage in an industry with high barriers to entry.