“We Remain Confident in the Long-Term Growth Opportunity”

Polen Capital, an investment management firm, published its “Polen Global Growth Fund” second quarter 2022 investor letter – a copy of which can be downloaded here. During the second quarter of 2022, the Global Growth Composite Portfolio (the “Portfolio”) was down -18.08% and -18.34% gross and net of fees, respectively, versus a decline of -15.65% for the MSCI ACWI (the “Index”). Since inception, the Portfolio has compounded at an annualized rate of 11.04% and 10.12%, gross and net of fees, versus 6.88% for the Index. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, Polen Global Growth mentioned Align Technology, Inc. (NASDAQ:ALGN) and explained its insights for the company. Founded in 1997, Align Technology, Inc. (NASDAQ:ALGN) is a San Jose, California-based orthodontics company with a $17.3 billion market capitalization. Align Technology, Inc. (NASDAQ:ALGN) delivered a -66.16% return since the beginning of the year, while its 12-month returns are down by -66.38%. The stock closed at $222.36 per share on October 06, 2022.

Here is what Polen Global Growth has to say about Align Technology, Inc. (NASDAQ:ALGN) in its Q2 2022 investor letter:

Align Technology shares declined significantly during the second quarter when management reported a meaningful deceleration in growth. Management cited a host of challenges, including COVID19 impacts, especially in China with restrictions and lockdowns under their zero-COVID policy, a weaker economic environment, inflationary pressures, supply chain disruptions, and the war in Ukraine, to name a few. Tough comparisons were also a reality— Invisalign case starts in 1Q22 were roughly flat, having lapped the 66% growth from the prior year. It’s not completely surprising that growth is slowing on such tough comparisons, but the company’s shares declined on the news.

By looking at Align’s three-year compound average growth rate (CAGR) to smooth out the ups and downs through COVID, key metrics like Invisalign case shipment, clear aligner revenue, and earnings per share have all grown ~20% during the trailing three years. We think this is quite respectable given the challenges during this period, but the lack of near-term momentum or visibility has not been well received in the current environment. According to our research, Align is the clear market leader, has global scale, a superior product, and still very modest market penetration. While growth may be challenged near term, we remain confident in the long-term growth opportunity.”

Smiling. Smile, Happy

Smiling. Smile, Happy

Photo by Karlo Tottoc on Unsplash

Our calculations show that Align Technology, Inc. (NASDAQ:ALGN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Align Technology, Inc. (NASDAQ:ALGN) was in 33 hedge fund portfolios at the end of the second quarter of 2022, compared to 45 funds in the previous quarter. Align Technology, Inc. (NASDAQ:ALGN) delivered a -14.36% return in the past 3 months.

In September 2022, we also shared another hedge fund’s views on Align Technology, Inc. (NASDAQ:ALGN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

 

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Disclosure: None. This article is originally published at Insider Monkey.

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