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.
Ginkgo Bioworks (DNA)
+16%
Shares of Ginkgo Bioworks traded up 16% on Thursday during a broad market rally. The Boston-based synthetic biology company has developed extensive domain expertise and large automated lab facilities and is partnering with companies* to develop or optimize microbes for valuable downstream products. In our view, intellectual property, equity, and royalty streams from its growing partnerships are Ginko’s primary value drivers.*Ginkgo often takes both a fee and an equity stake in and/or royalty rights from its customers.
Shares of Nubank rose 16% on Thursday as part of a strong tech rally. The company recently reported strong first-quarter earnings that surpassed consensus expectations by ~35%. Nubank is the leading digital wallet in Brazil and is seeking to expand its offerings throughout Latin America.
Shares of UiPath traded up nearly 17% on Thursday after the company reported strong first-quarter results including 50% year-over-year growth in annual recurring revenue (ARR). Despite its downward guidance and the uncertainty around macro conditions and customer demand last quarter, UiPath executed quite well and raised its full year ARR guidance by one percentage point to 32% year-over-year. UiPath provides a suite of robotic process automation (RPA) products that automates complex processes under specified compliance and governance standards.
Shares of Roblox traded up nearly 16% Thursday, rebounding from the weakness after Atlantic Equities’ downgrade last week. Roblox provides a creator-first digital entertainment platform and a 3D engine that allow third-party developers to create games and experiences for users globally. We hold high conviction in the trend to user-generated content and believe Roblox is the prime platform to monetize on this trend.
Shares of Repare Therapeutics closed up 44% on Thursday after the precision oncology company announced a new licensing agreement with Roche. Structured around camonsertib––a small molecule inhibitor with the potential to improve outcomes for patients with solid tumors––this deal commits Roche to downstream royalties and an up-front payment of $125 million.
Shares of Invitae traded down roughly 15% on Friday, a weak day for diagnostic companies overall. We believe the company fell disproportionately because Piper Sandler initiated Invitae at an underweight rating, partially on the premise that Invitae's competitors have material first-mover advantages in newer areas like liquid biopsy. We respectfully disagree with both the rationale and the rating. The first complete human genome was sequenced last year using long-read sequencing (LRS), a technology that Invitae is scaling through its partnership with Pacific Biosciences (PACB). According to our research, LRS can unlock vast amounts of clinical utility and economic value from the human genome. As one of the largest growing genetic testing companies in the US, Invitae is at the leading edge of medical genetics, based in part on the company’s scalable variant interpretation engine, its suite of digital and clinical services, and its innovation in liquid biopsy. Our research suggests strongly that Invitae is at the vanguard of a market that will take decades to mature and that it is one of the few public companies operating beyond the legacy, fee-for-service diagnostic model. Invitae is leveraging patient- and population-level data to empower patients, physicians, care teams, and families. We look forward to Invitae’s Technology Showcase during the week of July 11th.
