5 Biggest Losers in Gabriel Plotkin’s Melvin Capital Portfolio

3. Align Technology, Inc. (NASDAQ:ALGN)

YTD Share Price Decline as of May 25: 57.84%

Number of Hedge Fund Holders: 45

Align Technology, Inc. (NASDAQ:ALGN) is an Arizona-based medical device company that manufactures and sells products for restorative and aesthetic dentistry. Align Technology, Inc. (NASDAQ:ALGN) stock has plunged about 58% year-to-date as of May 25. Gabriel Plotkin’s Melvin Capital has dumped 75% of the shares it previously held in Q1 2022. The hedge fund now owns 161,112 Align Technology, Inc. (NASDAQ:ALGN) shares worth $70.2 million. 

On April 27, Align Technology, Inc. (NASDAQ:ALGN) posted its Q1 financial results, announcing earnings per share of $2.13, missing estimates by $0.10. The $973.22 million revenue also fell short of analysts’ predictions by $26.37 million. 

Credit Suisse analyst Matt Miksic on May 4 trimmed the price target on Align Technology, Inc. (NASDAQ:ALGN) to $418 from $722 and kept an Outperform rating on the shares. The analyst noted that Align Technology, Inc. (NASDAQ:ALGN) experienced a decline in cases late in the March quarter, driven by economically sensitive behavior among patients. Due to the uncertainty around the magnitude and duration of this consumer behavior, management retracted guidance and the analyst lowered his expectations for Clear Aligner sales by $345 million. However, he continues to see Align Technology, Inc. (NASDAQ:ALGN) as a solid disruptive growth play.

Among the hedge funds tracked by Insider Monkey, 45 funds were long Align Technology, Inc. (NASDAQ:ALGN) at the end of March 2022, down from 51 funds in the earlier quarter. Fisher Asset Management is the biggest shareholder of the company, with 571,043 shares worth about $249 million.  

Here is what Harding Loevner Global Equity Fund has to say about Align Technology, Inc. (NASDAQ:ALGN) in its Q4 2021 investor letter:

“Align Technology, which we wrote about a year ago, employs computer-aided design and manufacturing to make custom invisible orthodontics—an application of established technology to a new market. In an imaginative exploitation of the work from home phenomenon driven by COVID-19, Align dramatically expanded its digital marketing efforts last year, establishing a direct relationship with potential end-users who were seeing their smiles up close every day on video calls. The results of this very effective campaign to win new patients has endeared the company to its key customers, the family orthodontist or dentist.”