This column was originally published on RealMoney on Aug. 11 at 1:36 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

Fans of Jim Cramer have heard and read him enthusiastically sing the praises of aesthetic device maker and distributor

Syneron Medical

(ELOS)

.

What has Cramer so excited?

As he said on his

Aug. 8 "Mad Money" show, the vanity play is the big macro driver for Syneron and other

laser companies. Americans constantly seem to be searching for ways to improve their looks, and the simpler the method, the better.

Add aging's effects on the body and the graying of Baby Boomers in the U.S., and you have plenty of folks looking for ways to improve their appearance. More and more of them are finding a solution in noninvasive aesthetic medical procedures.

According to a recent study by

Medical Insight

, 40 million noninvasive aesthetic treatments were performed worldwide in 2004. By 2006, that figure is expected to exceed 60 million. Around $650 million was spent last year on equipment needed to carry out these treatments, and the market is expected to grow as much as 25% annually over the next five years.

Syneron looks poised to be one of the biggest beneficiaries of this trend.

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The company launched its first product platform, the Aurora, in December 2001. The Aurora is used by physicians for hair removal, rejuvenating the skin's appearance, and acne. In 2003, the Pitanga and Polaris were released, addressing the nagging issue of wrinkles.

In all, it now sells five products that cater to America's obsession for short cuts to looking glamorous, targeting a broad menu of noninvasive aesthetic treatments. Make that six. On June 13, Syneron received FDA approval for its VelaSmooth medical device, designed to temporarily reduce the appearance of cellulite.

Just how big is the cellulite market? More than 80% of women over the age of 18 have cellulite, regardless of their age, weight or physical fitness. According to data from the U.S. Census Bureau, as of July 1, 2004, there were more than 113 million women older than 18. By my math, that means that around 90.6 million women had cellulite last year -- and that's just here in the U.S.

It's no surprise, then, that some analysts think VelaSmooth has potential for $100 million annual sales eventually, a tidy sum for a company that did just $71.2 million in sales over the past 12 months. In fact, shortly after receiving the FDA news, management increased its revenue guidance for the year. Smith Barney thinks the upwardly revised projection is still conservative.

VelaSmooth works to melt and then rearrange the fatty tissue by gently heating layers below the skin using a combination of radio waves, infrared light, rolling massage heads and suction.

In fact, it's Syneron's proprietary Electro-Optical Synergy technology, or ELOS, that differentiates it from the competition.

Other noninvasive aesthetic products rely solely on optical energy from lasers or intense pulsed light (IPL), limiting the safety and effectiveness of many procedures because optical energy alone isn't able to adequately penetrate the skin. Rather, it undesirably gets absorbed in the outer layer of skin. High-power optical energy also requires relatively large and heavy equipment, which can be cumbersome and costly.

Syneron's ELOS technology adds radio-frequency energy to the mix. The combination of electrical and optical energy enhances the ability of physicians or other practitioners to accurately target the tissue to be treated, and allows for greater skin penetration. It also enables real-time measurement of the skin's temperature, improving patient safety and comfort. Lightweight and with a small footprint, Syneron's consoles require fewer costly handpiece replacements because they use less optical energy.

Next up? New technology is currently under development for nonsurgical liposuction. "This is a technology designed to perform what we call non-invasive liposuction -- the fat is actually removed non-invasively," CEO Moshe Mizrahy said in a recent article in

Australian Cosmetic Surgery

. That sounds like the holy grail in catering to American's sense of vanity. If botox was a home run in cosmetic treatment, then noninvasive lipo seems like a grand slam.

With a technological edge and a strong portfolio of patents, Syneron aims to expand its customer base beyond traditional users like the 30,000 or so dermatologists, plastic surgeons and other cosmetic surgeons in the U.S.

The company has its eye on the 200,000 physicians who have not traditionally incorporated aesthetic treatment into their practices -- at least not yet. Then there's the newly developing medical spa market. Just this week, Syneron announced a North American distribution deal with a division of EuropeLab, one of the largest distributors of specialized equipment for the spa market.

Ultimately, though, there's the possibility of selling directly to the consumer for home use. That's right: Sometime in the future, distressed people everywhere will be able to treat unwanted fat in the privacy of their own home. For the time being, though, Syneron is making fat profits making people look thinner.

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At time of publication, Norton's firm, GNI Capital, was long Syneron Medical, though positions may change at any time.

Charles L. Norton, CFA, is a principal of GNI Capital, Inc., an SEC-registered investment advisor that provides investment management expertise for separately-managed equity, fixed income and ETF portfolios and a hedge fund. In addition, Mr. Norton authors a twice-monthly newsletter, Supernova Stocks, which focuses on investments in market-leading stocks with unique and extraordinary growth potential. Mr. Norton had been a vice president in the equity research department of a New York-based hedge fund, where he also managed separate accounts for high net worth clients. Prior to his experience on the buy side, Mr. Norton worked in the investment banking division of Salomon Smith Barney, where he was an analyst in the health care group, reporting directly to the head of the group. While Mr. Norton cannot provide investment advice or recommendations, he appreciates your feedback;

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