Envista (NVST)
World class dental company on the cheap
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The dental sector did for many years see strong performance and high interest from investors globally. It’s such a compelling long term investment story. An aging population and teeth that doesn’t last longer than they used to (rather the opposite due to our eating habits). Add to that the whole beauty aspect of dental which is just growing. I have been pitching different dental companies to small groups of investors over the past years and I came to use this picture to drive home that point:
So with all of this positive backdrop maybe it’s somewhat surprising that a lot of dental stocks have been dropping like stones the past few years. Some people call it Covid hangover, a lot of demand for dentistry was pulled forward when stimulus checks gave people money to improve their teeth. Others point to the high interest rates and inflation where the average Joe has been squeezed financially and can no longer afford as much dental care as in the past. No matter the explanations the dental sector is going through a real soft patch, especially in the US, and stocks have corrected accordingly. For the long term investor this creates opportunities.
I have tried my best to understand the dental sector globally, turned a lot of stones, looked at most of the listed companies and for me Envista is the most compelling de-risked case. As previously was the case with my investment in ZimVie (link to write-up) this idea is also from a spin-off from a larger company. ZimVie was spun-out from Zimmer Biomet and Envista is spun-out from the quite famous Danaher group. Just the fact that Envista has been part of Danaher should be some type of quality mark.
As usual for my deep-dives I have written a comprehensive deck for you to flip through. I hope you enjoy it!
