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Insider Trade Spotlight – Dentsply (XRAY)

by | Mar 5, 2021

Dentsply (XRAY) with a notable insider buy on 3/4 from a director who added 5,000 shares at $58.95, a near $300,000 buy. XRAY last saw insiders buying stock in 2019 around the same levels, $53.50 to $55, including a $536,000 investment at $53.60. XRAY recently had buyers of 3,350 April $60 calls which remain in OI, a more than $1.45M buy. The $12.68B company trades 24.5X earnings, 3.75X sales, and 10X cash with a small yield. XRAY is guiding to 25% sales growth in FY21 and 6-7% growth in FY22. XRAY is in year two of a turnaround plan that involved simplifying its portfolio, organizational framework, and shedding some slower growth units. In January, the company bought Byte, a maker of clear aligners for $1.04B. The deal adds SureSmile to their clear aligner business and gives them a major position in the DTC market. They noted on a recent call:

“When we think about this transaction, it offers multiple strategic benefits. The first is the increase in scale in the clear aligner space; second, leveraging each of Dentsply Sirona’s and Byte’s unique capabilities, the combined clear aligner business is well positioned to unlock additional growth and profitability; next, this combination will now have both in-office and at-home solutions and will allow us to expand our total addressable market and extend access to additional patients.”

Analysts have an average target for shares of $55 and a Street High $71. Barrington upgrading to Outperform on 3/2 as the company is managing through the pandemic headwind effectively due to a combination of good expense management and innovation. Piper positive on the Byte deal in January noting that it’s a good strategic fit into a large and fast-growing market opportunity and the financial benefits translate to immediately stronger sales growth. Short interest is 1.3% and the lowest level in five years. Hedge fund ownership rose 1.5% in Q4, Melvin Capital a buyer of a new 2.2M share stake. Wedge Capital also a new stake.

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