RGAIA Investment Advisors, an independent, privately owned asset management firm recently published its second-quarter 2022 investor letter – a copy of which can be downloaded here. RGAIA Investment Advisors believe over the long run, letting winners ride is critical to exceptional results, and letting companies intrinsically compound is critical for optimizing after-tax results. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.
In its Q2 2022 investor letter, RGAIA Investment Advisors mentioned Align Technology, Inc. (NASDAQ:244.51) and explained its insights for the company. Founded in 1997, Align Technology, Inc. (NASDAQ:ALGN) is a San Jose, California-based orthodontics company with a $19.0 billion market capitalization. Align Technology, Inc. (NASDAQ:ALGN) delivered a -62.79% return since the beginning of the year, while its 12-month returns are down by -66.11%. The stock closed at $244.51 per share on September 05, 2022.
Here is what RGAIA Investment Advisors has to say about Align Technology, Inc. (NASDAQ:ALGN) in its Q2 2022 investor letter:
“Align Technology (NASDAQ:ALGN)– we have followed Align with admiration for years. The company has consistently executed its combination of profitable growth, while disrupting the orthodontics industry and enhancing its offering beyond the pure product. Specifically, Align’s Invisalign is by far the best clear aligner and the company has used its offering to build what is essentially the “operating system” foran orthodontics practice. COVID Stimulus led to a surge in demand from which there is now a hangover.
Consequently Align is at its lowest valuation multiple in a decade (sub 15x EV/EBITDA); lower than when fears of a patent expiration led some to believe emergent competition could derail Align’s momentum (it did not). Align is more “discretionary” than the typical healthcare company, because their core clientele are adult patients with orthodontic problems. This means there is some portion of cyclicality; however, the really long-term opportunity is capturing the core teenager orthodontic industry, which remains the vast majority (over 80%) treated with metal braces.
It is inherently more challenging to drive adoption in this demographic considering invisible aligners are more expensive and require patient compliance, though we think the generation growing up seeing themselves on Instagram and TikTok will inevitably steer towards clear, where Align is dominant. As they say, the future here is bright.”
Photo by Karlo Tottoc on Unsplash
Our calculations show that Align Technology, Inc. (NASDAQ:ALGN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Align Technology, Inc. (NASDAQ:ALGN) was in 33 hedge fund portfolios at the end of the second quarter of 2022, compared to 45 funds in the previous quarter. Align Technology, Inc. (NASDAQ:ALGN) delivered a -9.11% return in the past 3 months.
In August 2022, we also shared another hedge fund’s views on Align Technology, Inc. (NASDAQ:ALGN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.
Disclosure: None. This article is originally published at Insider Monkey.
