We share weekly commentaries with investors on stocks in our strategies that have appreciated or dropped more than 15% in a day during the course of the week. We hope you find this commentary useful.
ExOne (XONE) closed up more than 24% on Monday. ExOne, a leader in binder jetting 3D printing technology, may have been responding to Stratasys’s fourth quarter report in which both revenues and earnings topped expectations.
Pacific Biosciences (PACB), a leading provider of highly accurate, long-read sequencing solutions, surged 15% on Monday as investors and speculators bid it up in advance of the Advances in Genome Biology and Technology (AGBT) conference this week. During AGBT, spokespeople from Pacific Biosciences and Children’s Mercy Hospital unveiled preliminary data suggesting that PacBio’s HiFi long read whole genome sequencing (WGS) significantly outperforms short-read sequencing the diagnosis of rare and Mendelian diseases. In a prospective setting, HiFi WGS generated a 67% diagnostic yield compared to 45% for short-read sequencing. Based on the organic adoption of long read sequencing, a sizable $900 million investment from SoftBank, and a transformational technology partnership with Invitae (NVTA), we believe PacBio is well positioned to dominate the WGS market in both clinical and population-research settings.
Silvergate Capital (SI) traded up 16% on Monday in line with rising cryptocurrency prices, then traded down 17% on Thursday during a broad-based equity market correction. In our view, the Silvergate Exchange Network (SEN), with its strong network effects, positions it as both a facilitator and prime beneficiary of increased crypto adoption.
Vuzix (VUZI), a company developing wearable display technology, traded up 25% on Monday in response to a press release announcing that Microsoft Teams will support its M400 and M4000 Smart Glasses. On Thursday, the stock dropped 22% in a broad-based equity market correction.
Schrödinger (SDGR), a computational drug and material discovery company leveraging its highly-differentiated, physics-based platform, dropped 27% on Thursday after reporting quarterly and full-year results that disappointed investor expectations. In its 2021 guidance, Schrödinger highlighted that growth in its core software is slowing down as the size of its customer contracts increases, extending sales cycles and limiting near-term revenue visibility. Additionally, Schrödinger’s internal drug development pipeline progress has slowed down slightly, pushing IND-submissions into early 2022 instead of late 2021. Despite these concerns, we believe Schrödinger’s medicinal chemistry platform offers a powerful and unique view into chemical space, which should become more apparent as its internal and collaborative programs enter clinical stages.
Veracyte (VCYT), a vertically integrated provider of molecular diagnostic and prognostic testing, closed down 15% on Thursday in a broad equity market selloff. We believe investors are concerned about the stability of tissue-based biopsies in the face of delays associated with the COVID-19 pandemic. In our view, Veracyte is extremely well positioned in the molecular diagnostics space, especially after its recent acquisition of Decipher Biosciences, which will move it into a market-leading position in 7 of the 10 most lethal cancers in the United States.