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With an aging baby boomer population who have substantial disposable income, it’s no wonder that companies that deal in cosmetic procedures have performed well. It’s no secret that this generation wants to recapture their youthful appearance, and as they continue to age, they will turn more and more to medical solutions.

When searching for smaller companies that show growth potential, it pays to take a look at Syneron Medical (NASDAQ:ELOS). This small Israeli company designs and sells medical products based on their own proprietary Electro-Optical Synergy, or ELOS technology. They promote their non-invasive procedures, like wrinkle reduction, hair removal, and skin rejuvenation.

Most interesting for long-term investors is the recent agreement signed with Proctor and Gamble (NYSE:PG) to develop an ELOS-based home-use device. David Schlachet, CEO of Syneron said:

The highlight of the first quarter was the signing of the collaborative agreement with Procter & Gamble for the commercialization of Syneron’s ELOS[TM]-based, home-use devices. Progress continues on the development of the product, and we recently completed our internal second phase clinical trial, which demonstrated excellent clinical results and high satisfaction levels. We are confident that the P&G partnership will not only position Syneron as a leader in the energy-based home use market, but also will allow us to achieve deeper penetration of our broad product offering.

As I have mentioned before, many Israeli technology companies start out hot because of the hype caused by the innovative technology they are creating, and then proceed to crash and burn. Syneron, however, has been executing its business model more carefully. And though the company was once a high flyer that crashed, the stock has re-emerged. The first quarter of ’07 showed a 36% rise in revenue over Q1 ’06. The company also re-affirmed Q2 estimates and has succeeded in the implementation of cost cutting measures by reducing investments in marketing and sales, which peaked in the fourth quarter of 2006, by approximately 7% (on a Non-GAAP basis) compared to the prior quarter. Trading with a PEG of 0.88, strong margins and with about $180 million in the bank and little debt, Syneron, looks like an attractive way to play the aging population game.

Source: Syneron Medical: An Attractive Baby Boomer Investment