The last time I went to my dentist, I wanted to talk about Young Innovations (NASDAQ:YDNT), a manufacturer of supplies and equipment used by dentists and hygienists, instead of talking about whether or not flossing will actually prevent heart disease (I'm told that it does). But for this particular visit, while spitting and rinsing, I wanted to know if St. Louis-based Young Innovations could be considered a Hidden Gem.
From the dentist's perspective, Young Innovations makes good products. He even called in his hygienist -- which also happens to be his wife -- to put in a good plug for the company. But I, of course, being the diligent pursuer of information, wanted to know more details. I'm not one to blindly follow recommendations. (For example, the dentist still instructs me, every time that I visit, that I need to floss more.) So, I've been following the numbers over the past few quarters and even called the company to have the latest annual report sent to my office.
So far, it is looking like Young Innovations is one of those rare companies not talked much about in the financial press or covered much by analysts. In its latest quarterly numbers, released this week, its net income increased 16.2% to $3.3 million or 35 cents a share compared with $2.8 million or 30 cents a share during the comparable quarter last year. Net sales increased 5.1% to $19 million during the quarter compared to $18.1 million last year.
Its first nine months was a similar story. Net income was up 16.3% to $8.1 million or $1.01 a share during the same period last year. Sales totaled $55.4 million, up 5.4%. And Young Innovations expects more good numbers in the future, including earnings per share of $1.39 for all of this year and $1.55 to $1.57 a share during 2004.
Plus, while trading at $31.36 with a price-to-earnings ratio of 24, Young Innovations seems reasonably priced. So the next time when you are at the dentist, instead of thinking about the drilling and the spitting, think about Young Innovations. It may be just the thing to put a smile on your face.
Brian R. Hook is the publisher of BizBlip.com and can be reached by email at [email protected].
