As I mentioned in yesterday’s blog, stock buybacks are a big deal for several reasons. Well, today, I want to share with you another one of my favorite companies offering a generous buyback program right now. When you couple this recent news with this stock’s fundamentals, you’ll quickly see why this company is one of my personal favorites. But first…
Align Technology, Inc. (ALGN) is a global medical devices company known for designing and producing Invisalign clear aligners, OrthoCAD digital services and iTero Intraoral scanners, all of which are used by dental professionals. And as I alluded to above, ALGN just boosted its stock buyback program by a massive $600 million. This is in addition to the $100 million already planned under its existing share repurchase program.
Now, if you remember from yesterday, stock buybacks bode well for a company for three specific reasons. First, they’re a sign that the company considers its shares a good bargain. Second, having fewer shares on the market reduces share price fluctuations. Third, stock buybacks increase earnings per share–helping a company beat analyst estimates when they announce quarterly results.
All these factors boost investor confidence in the company, and that in turn, helps boost the company’s share price. And when you couple this news about Align Technology with a few more facts about this company, it becomes apparent why ALGN is one of my favorite stocks on the market right now.
For starters, the company’s near-term outlook is great. For the second quarter, Align Technology expects net revenues between $460 million and $470 million, or 29% to 31.8% annual sales growth. Also, second-quarter earnings per share are forecast to be between $1.02 and $1.06, which represents 20% to 24.7% annual earnings growth.
What’s more, Align Technology’s long-term outlook is good, too. In fact, it just lifted its long-term sales target from 15%-25% to 20%-30%. That means we can expect even more positive growth from this company in the year to come.
I’m sure you can easily see now why ALGN maintains an A-rating in my Portfolio Grader tool today. Not to mention, Align Technology has already brought my Emerging Growth members an absolutely incredible 229% return. And if you look back at everything I’ve shared with you about ALGN today, I think you can easily see why I believe this stock still has a ton of room to run.
All in all, given this recent buyback news, Align Technology is a great investment for my Emerging Growth members and anybody else interested in breakout stocks.