Envista Holdings (NVST-N)

NVST is a $4.5B market cap company serving the dental industry. It is reasonably-priced at 14X earnings. Net debt of $800M is fairly high compared with $235M cash flow in the last year. Cash flow is decent, and steady, but we do note that sales are essentially the same level as nearly eight years ago. It has been consistently profitable, but EPS next year is expected to be slightly lower than it was in 2016. Even with no growth, the company pays no dividend. Insiders own less than 0.5%. On the positive side, sharecount has not changed in many years. It typically beats estimates, but there is very little excitement here. We would be more interested in it as a value stock if debt was lower. As it stands, we would pass. 
Unlock Premium - Try 5i Free

Increased investments in R&D. Divested low-growth areas, repositioning for the future. Dental visits were down during Covid. Headwinds in Russia and China have hurt. She's underwater, but management is doing the right things. In US, dental costs are more discretionary. Demographics and low EM penetration rates are tailwinds.

(A Top Pick Sep 14/21, Down 23%) A leading provider of dental products and services. A spin-off from Danaher. A reason NVST is down is that dental expenses are only partially (50%) covered by plans, so people may defer going to the dentist. Also, 15% of their revenues are from Russia and China (impacted by lockdowns). That's a hiccup. Is trading cheaply now, and she likes the long-term prospects. NVST is introducing new popular products like new implants.

She started buying this last year. They revamped their dental product lines, which are doing well. Dental care has room to grown in emerging, markets, though mature in North America. She sees 10% upside one year out. Likes it.