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.

This fund has posted an average annual return of 28.9% since Daniel Loeb founded the firm in 1995. That's more than double the 12.5% gain logged by similar hedge funds during that period, according to Credit Suisse First Boston Tremont Index LLC.

Third Point likes to find underperforming companies with a lot of cash in the bank. Candela has $42 million in cash and no debt. My guess is that as the company ramps up its sales force to deal with new products, Candela should experience massive growth due to the sheer growth of the industry.

Other Third Point positions include

Nabi Biopharmaceuticals

(NABI)

and

PDL Biopharma

(PDLI) - Get Report

. And passive holdings of Third Point, where they have not (yet) taken activist stances, include

Sears Holding

(SHLD)

,

McDonald's

(MCD) - Get Report

and

NYSE Euronext

(NYX)

. The last three are all positions that overlap with other activist funds and other super-investors.

For the rest of the companies on the tattoo removal index, please check out our portfolio of

Tattoo Removal Stocks

.

Again, these are companies that are involved in all aspects of minimally invasive cosmetic treatments, which is riding a huge demographic trend. I plan on covering this space in more depth over the next few weeks. One of the companies I'm particularly interested in has more than $60 million in net cash and 230% year-over-year earnings growth.

Please note that due to factors including low market capitalization and/or insufficient public float, we consider CLZR to be a small-cap stock. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.

At the time of publication, Altucher and/or his fund had no positions in stocks mentioned, although positions may change at any time.

James Altucher is president of Stockpickr LLC, a wholly owned subsidiary of TheStreet.com and part of its network of Web properties, and a managing partner at Formula Capital, an alternative asset management firm that runs several quantitative-based hedge funds as well as a fund of hedge funds. He is also the author of

Trade Like a Hedge Fund

and

Trade Like Warren Buffett

. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Altucher appreciates your feedback;

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to send him an email.

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