J.P. Morgan Challenge: Making Money Off Molars Edition

At its root, January's annual J.P. Morgan Healthcare Conference is for learning more about potential investments. For every Celgene (NASDAQ:CELG), which routinely reports preliminary year-end results at the conference, there are quite a few companies at the conference that are just giving investors an opportunity to learn more about their company. Why not take them up on the offer?

With that in mind, I went through the list of yesterday's presenters to find a company I knew less about. I only had to get to the D's before I ran across Dentsply (NASDAQ:XRAY). The ticker cinched the deal; even though they might not mean much, I'm a sucker for an interesting ticker.

Turns out, the company doesn't seem to make X-ray machines. Instead, Dentsply is heavily in the dental product field with about 120,000 different products for dentists.

The company's worldwide sales breakdown is 40% in the U.S., 40% in western Europe, and the rest scattered around the globe including 11% in developing countries. That last group is important because developing countries tend to have ever-increasing middle classes that go to the dentist. Spending on dentistry in developing countries often grows faster than the overall economy.

Back at home, growth will come from a shift in the age of the population -- as baby boomers age, their dental needs will increase. In fact, because of the advances in dental care over the last generation or two, more of the elderly population have their original teeth instead of dentures, unlike previous generations. More teeth means more need for dentistry.

With less involvement from the government -- Medicare doesn't cover dentistry -- dental companies have to worry less about reimbursement than drug companies like Eli Lilly (NYSE:LLY) and GlaxoSmithKline (NYSE:GSK), or medical device companies like Boston Scientific (NYSE:BSX) and Medtronic (NYSE:MDT). Of course that also means that Dentsply is more susceptible to the economy, especially for higher cost procedures like dentures and crowns, which patients might be able to put off. Dentsply's revenue was down over 5% year over year during the first nine months of last year.

In better times, however, the company has a goal of growing sales at a double-digit pace with 5% to 6% coming from internal growth, 4% to 5% from acquisitions -- there are literally thousands of small dental companies that could be potential acquisition targets -- and 2% to 3% coming from efficiencies of scale.

With five out of five stars in Motley Fool CAPS, the community intelligence certainly seems to think that Dentsply is worth a closer look.

Join in the fun
In addition to the live webcasts, the recordings of many of the presentations are available. Go have a listen to one of the presentations of a company you know very little about. After your introduction, head back here and tell us about the company. Or better yet, pitch it in Motley Fool CAPS.