Top Stocks for 2013: #3 SIRO and #2 ALGN

I love the dentist!  Not because it is an enjoyable experience (though it is vastly improving every year) or because it makes me healthier and more attractive. No, I love the dentist because the dental industry is an industry that is going to explode with the improvement in life quality for billions of people worldwide. As billions of Chinese and Indians join the middle class they are first going to try and improve their appearance and their health. The dental industry, and specifically SIRO and ALGN, are perfectly positioned from this boom.

Sirona Dental Systems, SIRO, provides the dental equipment, while Align Technology created Invisalign. Invisalign is the next generation of braces where they 3D scan your teeth and 3D print clear molds for your mouth to gradually straighten your teeth. Millions of teenagers world wide will owe ALGN their eternal love for saving them from mangled cheeks, excrutiating braces tightening at the dentist office, and walking around with half your lunch stuck between your braces.

SIRO has made a significant move this year, but with a FPE of 17 I think this stock can trade to $95 (FPE of 25). This would indicate an upside of 46%. I would place a partial stop beneath 60 and another full stop beneath 55, risking about 10% on the first half of your money and 15% on the 2nd.


ALGN missed earnings and sold from $40 to $25. I like buying in the $25-$28 range with a stop beneath $22, risking about 17%. With a FPE of 23, I think this stock can easily return to its high of $40 and even reach $50 by end of year for a return of 75% from current levels.


I see SIRO and ALGN as major long term positions (several years) and part of a major theme I want to be invested in long term. I think 2013 is the year to begin building positions in the dental industry and as of now these two stocks are my favorite.