Is Align Technology (ALGN) A Smart Long-Term Buy?

Harding Loevner, an investment management firm, published its “Global Equity” fourth quarter 2020 investor letter – a copy of which can be downloaded here. A net return of 13.73% was recorded by the fund in the fourth quarter of 2020, trailing both its MSCI All Country World benchmark that delivered a 14.79% return and its MSCI World Index that had a gain of 14.07% in the same period. You can view the fund’s top 5 holdings to have a peek at their top bets for 2021.

Harding Loevner, in their Q4 2020 investor letter, mentioned Align Technology, Inc. (NASDAQ: ALGN) and shared their insights on the company. Align Technology, Inc. is a San Jose, California-based orthodontics company that currently has a $42.98 billion market capitalization. Since the beginning of the year, ALGN delivered a 1.59% return, impressively extending its 12-month gains to 245.32%. As of March 30, 2021, the stock closed at $524.33 per share.

Here is what Harding Loevner has to say about Align Technology, Inc. in their Q4 2020 investor letter:

“If you must head to one of the economy’s hot spots, perhaps look for soft wear rather than software. Align Technology was founded in 1997 in a Silicon Valley duplex with a singular vision: use technology to straighten teeth. Align pioneered computer-aided invisible orthodontics as an alternative to metal braces, and has now treated over 9 million patients with its Invisalign clear aligners. Align utilizes direct-to-consumer advertising to pull patients into participating dentists’ offices, equipping practitioners with real-time visualization and algorithm-assisted treatment planning to create and fit bespoke flexible plastic aligners. The company has been expanding its acceptance among practitioners for decades, but during the pandemic the numbers of those seeing the benefits of being able to treat patients with less chair time and fewer visits seems to have reached a tipping point. Like Disney, Align has also used the crisis to expand its digital marketing, reaching stay-at home teens and adults spending hours on Zoom, increasingly focused on how their teeth look on camera. As dental offices have reopened, Align’s earnings have benefitted from pent-up demand. It is emerging from the pandemic with a larger market share in orthodontics and a larger mind share with consumers.”

Robert Przybysz/

Our calculations show that Align Technology, Inc. (NASDAQ: ALGN) does not belong in our list of the 30 Most Popular Stocks Among Hedge Funds. As of the end of the fourth quarter of 2020, Align Technology, Inc. was in 50 hedge fund portfolios, compared to 47 funds in the third quarter. DIS delivered a 3.53% return in the past 3 months.