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SCHK
Strong Buy 
 100.00%
1 members
Buy 
 0.00%
0 members
Hold 
 0.00%
0 members
Sell 
 0.00%
0 members
Strong Sell 
 0.00%
0 members
 
Average rating: 1.00 (Strong Buy) 1.00 - 5.00 (Strong Sell) Total: 1 members

Annual growth of SCHK:

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Dec. 21 2005, 6:41 PM ET
Nearest price: 33.10 (12/21/05)
by rookie (profile)
(all of rookie's ratings)
rating:
Strong Buy
Schick Technologies has just been relisted on the nasdq. Schick is the leading company in dental digital imaging. If you want to know the past story this is a good link:
http://www.valueinvestorsclub.com/value2/guests/view-thread.asp?delay=45&id=1531&more=dtrue

To make a long story short the company is now merging with sirona a leading german dental equipment company. They only make top of the line equipment.
http://www.sirona.com/

FTN Midwest just initiated coverage. Here is an excerpt:
FTN Midwest Excerpts:

We are initiating coverage of Schick Technologies (SCHK*) with a BUY rating and a $37 price target. In calendar 1Q06, SCHK will complete its merger with Sirona Dental Systems. We believe this combination will create the most exciting dental company in the industry.

Today, SCHK is a relatively undiscovered company with limited investment research coverage, and trades on the bulletin board. By early 2006, SCHK will transform into a NASDAQ-listed $1.8 billion company with growth characteristics and margins above its peers in the dental industry. Investors willing to wait for this metamorphosis will be rewarded with a $2.50 per share special dividend (8%) to be paid some time in 1Q06 in conjunction with the closing of this transaction. The specific record date will soon be announced in a company proxy statement.

The new Sirona Dental Systems (New-SCHK) will be a global leader in high technology dental equipment with sales in excess of $500 million, internal growth in the mid-teens, and earnings growth exceeding 20%. New-SCHK will benefit from penetration of two of the most exciting growth markets in dentistry: digital radiography and the CAD/CAM market with its CEREC product line. Today the U.S. digital radiography market is less than 20% penetrated, and CAD/CAM technology has only been adopted in 5% of dental practices. Ultimately we believe it is reasonable to assume digital radiography will achieve over 90% penetration, and over 50% of dentists will adopt a CAD/CAM system. We believe New-SCHK is best positioned to benefit from this trend.

Since the investment community is relatively unfamiliar with the privately-held German company Sirona, and its historical financials have been prepared in accordance with German accounting standards, many investors are waiting for the converted United States GAAP filings. We have followed both SCHK and Sirona’s business for many years through our public and private industry contacts. As a result, we are very comfortable with this merger and expect the combined entity to generate internal growth of 15-16% and meet or exceed our $1.15 cash estimate for New-SCHK’s fiscal 2007 (Mar-06-07). We believe investors that initiate positions in SCHK today will capitalize on an information void and benefit from the strong future growth catalysts.

.....

Valuation
Once this merger is complete, the New-SCHK will have a very attractive investment profile. The new company will generate internal revenue growth that is more than twice the rate of the dental industry, with EBITDA margins that are over 40% higher than the dental peer group. From an earnings perspective, we believe New-SCHK can sustain a longterm earnings growth rates over 22%, or more than 50% faster than the publicly traded peers.

We believe our $1.15 forecast represents a reasonable initial look at this business. Once the combined financials are completed and available in U.S. GAAP and the two businesses merge, we will have an opportunity to further review our estimates.

Given its strong revenue, margin, and earnings growth characteristics relative to the peer group, we believe New-SCHK should trade at a substantial premium. Currently the dental peer group is trading at nearly 21x forward earnings, as shown in the following table.

{Table omitted}

We believe New-SCHK could trade at a 25-30% premium on forward earnings, or 26x-27x, our conservative $1.40 earnings estimate for FY08 (Mar-07-08). As a result we believe New-SCHK shares could reach the $37-$38 range over the next 12 months. Our formal price target is $37.

When we consider that SCHK shareholders will be paid $2.50 per share in cash sometime in 1Q06, the effective return of our $37 price target is 23% upside from current levels.




I bought shares at 16. To bad I didn't buy them at . I am a dentist and I am familiar with both companies. The future for this company is very bright.

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