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Sirona Dental Systems, Inc. (SIRO): David Blood and Al Gore’s GIM Picks Up Stake; Should You Follow?

David Blood and Al Gore‘s Generation Investment Management has reported adding more shares to its stake in Sirona Dental Systems, Inc. (NASDAQ:SIRO). According to a new filing with the Securities and Exchange Commission, Generation owns a passive stake that contains 2.96 million shares, which represent 5.1% of the company’s outstanding common stock. The position has been raised from 2.37 million shares that the fund disclosed in its latest 13F filing.

David Blood

Generation Investment Management was founded in 2004 by the former Chief Executive of Goldman Sachs David Blood and the former Vice-President of the United States Al Gore. The fund uses a long-only approach and focuses on equity. As of the end of September, Generation has an equity portfolio worth $6.41 billion and is concentrated mainly on technology stocks. The two largest holdings in terms of value in the fund’s equity portfolio are represented by QUALCOMM, Inc. (NASDAQ:QCOM) and Edwards Lifesciences Corp (NYSE:EW). The fund owns around 7.71 million shares of Qualcomm, whose stock inched down by 3% since the beginning of the year, while Edwards Lifesciences jumped by 97% during the same period.

Sirona Dental Systems, Inc. (NASDAQ:SIRO) is a $4.80 billion healthcare company, which is focused on producing dental equipment, as well as developing solutions for dentists around the globe. Generation initiated a position during the first quarter and over the following months has been raising its exposure from around 2.01 million shares held initially. Meanwhile, the stock gained around 24% since the beginning of the year and trails a P/E of 27.6, which is slightly below the industry average of 30.5. Moreover, the company has an average revenue growth of over 8% over the last three years, outperforming the industry average of 5.6%.

Amid Sirona’s stock appreciating, some investors have been reducing their positions to pick some profits, such as William Von Mueffling‘s Cantillon Capital Management, which inched down its exposure by 1% to 2.47 million shares and Robert Joseph Caruso‘s Select Equity Group, which cut its stake by 35% to 1.11 million shares. On the other hand, Sirona Dental Systems, Inc. (NASDAQ:SIRO) also attracted the attention of other investors. For example Ken Griffin‘s Citadel Investment Group and John Burbank‘s Passport Capital added the stock to their equity portfolios during the third quarter and own 331,600 shares and 48,700 shares respectively.

Some insiders have also decided to profit from the stock gaining ground. In this way, Jeffrey Slovin, Chief Executive Officer of Sirona Dental Systems, Inc. (NASDAQ:SIRO), has converted some of his options and purchased 56,500 shares, and then sold around 10,750 shares for $85.50 per unit, reducing his holding to 115,850 shares.

Moreover, analysts are also bullish on Sirona Dental Systems, Inc. (NASDAQ:SIRO) and earlier this year, several agencies have raised their price targets and/or upgraded the stock’s rating. At the end of September, Robert W. Baird upgraded the stock to ‘Outperform’ from ‘Neutral’ and raised the price target to $88.00 from $83.00. Overall, the average price target for Sirona’s stock stands at around $88.10 per share.

Disclosure: none

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