Trade of the Day: A Look at XRAY Stock Shows Huge Promise

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Dentsply Sirona Inc (XRAY) — XRAY stock has been on a tear this week, breaking out to new all-time highs.

The dental products manufacturer is also attractive from a fundamental perspective. MarketWatch reports Dentsply Sirona is one of just 22 companies in the S&P 500 that has seen gross profit margins expand for at least 10 straight quarters.

And S&P Capital IQ Equity Research, which rates XRAY stock a “Buy,” considers shares to be low risk based on long-term earnings stability and geographical diversification. Its analysts also note Dentsply Sirona’s low debt-to-capitalization ratio and the merger with Sirona Dental Systems in September 2015 as positives. Capital IQ has a 12-month price target of $70 on XRAY stock.

The consensus estimate is for sales to jump 43.6% this year, boosted by the merger, and for earnings to increase 5% to $2.75 per share. Next year, they forecast 12.7% earnings growth on a 10.7% increase in sales.

Turning to the chart, XRAY broke from a triple-top on Tuesday, which completed a consolidation in a right triangle and took shares to new all-time highs. The breakout has initial support at about $63, drawn from a trendline that connects to the December and March highs.

A buy signal from my proprietary internal indicator, the Collins-Bollinger Reversal (CBR), is another strong technical sign that XRAY stock has begun a major move higher. And since the breakout moved shares into uncharted territory, there is no resistance in sight.

Buy XRAY stock under $64 for a trade to $70 and a potential return of more than 9%.

Longer-term investors can buy shares as a cornerstone investment in the health care industry for bigger capital gains and income. The company pays an annual dividend of 31 cents per share for a current forward yield of 0.5%, and the next ex-dividend date is scheduled for June 22.

XRAY Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/dentsply-sirona-inc-xray-stock-trade-day/.

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