Align Technology (ALGN) Fell on Concerns Over Weakening Consumer Sentiment

Parnassus Investments, an investment management company, released the “Parnassus Value Equity Fund” second quarter 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the Fund (Investor Shares) returned -3.81% (net of fees) underperforming the Russell 1000 Value Index’s -2.17% return. Stock selection in the Health Care sector drove most of the portfolio’s underperformance. The firm believes the Fund is well positioned for future returns with AI-related investments in Information Technology complemented by holdings that should benefit from improved performance across other sectors. If investor uncertainty increases, it anticipates finding more bargain opportunities. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Parnassus Value Equity Fund highlighted stocks like Align Technology, Inc. (NASDAQ:ALGN) in its Q2 2024 investor letter. Align Technology, Inc. (NASDAQ:ALGN) designs, manufactures, and markets Invisalign clear aligners, and iTero intraoral scanners and services. The one-month return of Align Technology, Inc. (NASDAQ:ALGN) was 3.10%, and its shares lost 21.16% of their value over the last 52 weeks. On September 25, 2024, Align Technology, Inc. (NASDAQ:ALGN) stock closed at $242.45 per share with a market capitalization of $18.11 billion.

Parnassus Value Equity Fund stated the following regarding Align Technology, Inc. (NASDAQ:ALGN) in its Q2 2024 investor letter:

"Align Technology, Inc. (NASDAQ:ALGN), the manufacturer of leading dental aligner Invisalign, logged solid first-quarter earnings and improved guidance. Shares fell over concerns of weakening consumer sentiment since orthodontic costs are often not covered by insurance. We maintain our view that Align will take market share from metal braces."

An orthodontist examining a patient's teeth with a intraoral scanner, demonstrating the precision of the company's technology.

Align Technology, Inc. (NASDAQ:ALGN) is not on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held Align Technology, Inc. (NASDAQ:ALGN) at the end of the second quarter which was 56 in the previous quarter. The total revenues of Align Technology, Inc. (NASDAQ:ALGN) for the second quarter were $1,028.5 million, an increase of 2.6% from Q2 2023 and up 3.1% from Q1 2024. While we acknowledge the potential of Align Technology, Inc. (NASDAQ:ALGN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Align Technology, Inc. (NASDAQ:ALGN) and shared the list of worst 3D printing and additive manufacturing stocks to buy. Polen Focus Growth Strategy exited Align Technology, Inc. (NASDAQ:ALGN) in Q2 2024. In addition, please check out our hedge fund investor letters Q2 2024 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.