by Corey Hajim, FORTUNE Magazine

(FORTUNE Magazine) - What we said

In "Stocks to Sink Your Teeth Into" (Nov. 28, 2005), we argued that dental-supply companies were a good baby-boom bet for investors--the demographic momentum of health care without the headaches of heavy regulation and pricing pressure. We cited two stocks with low-double-digit profit expectations and opportunities to expand into specialty areas with higher margins and grow through acquisition: Dentsply (Research) (XRAY) at $57 and Sybron (Research) (SYD) at $43.

What happened

No cavities here. Sybron, the smaller of the two, popped 10% on news that Danaher is offering to acquire it at $47 a share. Dentsply is up 3% to $59, and industry trends still look good. The aging population is growing, and people are spending more on their teeth.

Product innovation in the sector continues, helping a shrinking dentist population address increasing demand. In addition, Dentsply remains the market leader in most product areas, has a large sales force and an impressive R&D pipeline, and should benefit from an upswing in the German market, which accounted for 21% of sales in 2005. While Sybron may get a competitive boost from a new, powerful parent company, Dentsply has "a long history of successfully operating in the highly competitive dental industry," says Robert W. Baird analyst Suey Wong, who expects 5% to 6% internal growth in 2006. Still looks like a good buy to us Top of page