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When you are in the dentist's chair, you are probably not thinking about who makes the crowns, alloys, anesthetics and instruments all around you. When you need them, however, you are glad they are there and just might be interested in knowing that one of the world's biggest manufacturers of such products is headquartered in York, Pennsylvania.
Dentsply International (NASDAQ: XRAY) designs, develops, manufactures and markets a broad range of products for the dental market. The firm is a leading provider of consumables (e.g: anesthetics, impression materials, tooth whiteners, topical fluoride and small equipment), laboratory products (e.g: artificial teeth, alloys, ceramics and crown/bridge materials) and specialty products (e.g: endodontic instruments, implants and orthodontic appliances). Dentsply's client list includes dentists, dental labs and dental schools in more than 120 countries.
The company pleased the Street last week, when it reported Q3 EPS of 39 cents and revenues of $488.1 million. Analysts
had been looking for 38 cents and $475.9 million. Management also guided FY07 EPS to $1.62-$1.66, versus consensus of $1.64. The CEO noted particular strength in international operations. JMP Securities and Barrington Research subsequently reiterated "outperform" ratings on the issue. The news popped XRAY shares into a bullish "flag" consolidation pattern. Stocks frequently exit flags moving in the same direction they were traveling on entry. In this case, that would be to the upside.
Altogether, brokers recommend the shares with four "strong buys", four "buys" and one "hold". The XRAY Price to Sales ratio (3.48), Price to Book ratio (4.64), Price to Free Cash Flow ratio (23.39), EPS Growth rate (18.18%), Net Profit Margin (13.13%), Return on Assets (9.83%) and Return on Investment (12.43%) compare favorably with industry, sector and S&P 500 averages. Institutional investors hold about 79% of the outstanding shares. The stock is one of those used to calculate the S&P 400 MidCap Index. Over the past fifty-two weeks, it has traded between $29.44 and $46.15. A stop-loss of $38.00 looks good here.
Larry Schutts is a contributing editor for Theflyonthewall.com and the Vice-President of Stockwinners.com.
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