Third Point Lasers In On Tattoo Stocks

I thank God I never got a tattoo, and apparently I'm not alone. Six million Americans want to be tattoo-free, but their problem is they actually have a tattoo.

According to the Sunday New York Times, 45 million Americans have tattoos and 17% of them regret it.

But tattoo removal treatments are painful and expensive. The process consists of lasers basically disintegrating tattoos in anywhere from six to 20 separate treatments. According to the Times story, each treatment is like rubber bands snapping against your skin, but as the baby boomers age, what was once a picture of Satan on your right shoulder is now just a flabby red grinning face laughing at you. This is a trend we can invest in.

Stockpickr member 4Michah set up a tattoo removal portfolio and found all the companies that benefit from this trend.

These companies don't focus only on tattoo removal, but offer any cosmetic procedure involving lasers, including wrinkle removal, skin tightening, scar removal, etc. These procedures are growing industrywide at a pace of 30% per year.

One interesting stock in the space is Candela(CLZR). The small-cap company has actually had declining sales and profits for the past two quarters despite industry growth. This is a direct result of the company introducing four new products over the past year and making missteps in ramping up its sales force to deal with new products. But what makes it interesting is that activist hedge fund Third Point has recently acquired 8.7% of the company.