In this article, we present to you the 12 best genomic stocks to buy now according to hedge funds. If you’re in a hurry you can skip ahead to the 5 Best Genomic Stocks to Buy Now.
The World Health Organization defines genomics as the study of genes and their functions and related techniques. Some may confuse genomics with genetics, the main difference between the two is that genetics focuses on a single gene where as genomics addresses all genes and their relationship with each other.
COVID-19 virus made the power of genomics more visible. Rene Hendriksen, Professor, and Researcher at the Technical University of Denmark mentioned,
“You can see if the continent has been infected with different clones [mutations of COVID-19] or the same clone and then track those to the point of entry,”
Gene sequencing stocks have been a bright spot for investors, as lower costs and added urgency from the pandemic for biotech solutions have created long-term growth in the industry. Please also see the 12 Best Large Biotech Stocks to Buy Now.
Copyright: nexusplexus / 123RF Stock Photo
With technological advancement, genomics does not only have the capability to allow billions of people to live longer and healthier lives but it will also transform healthcare as we know it.
In a study conducted by Zion Market Research, the global genomics market was valued at approximately $16.4 billion in 2018 and is expected to generate around $41.2 billion by 2025 at a CAGR of 14.2% between 2019 to 2025.
According to research from BMC Genomics, the United States spent more than any other country on genomics research, corresponding to 35% of the overall worldwide public funding.
The growth of the genomics market has been evident with the growing government support. In 2016, the project Genomic Data Commons was launched where $70 million funding was allocated to the National Cancer Institute for cancer genomic projects under the precision medicine initiative. Right now investors are piling into technology stocks like Tesla (TSLA) or speculative software-as-a-service (SaaS) stocks that trade at 20 to 50 times revenues (see our detailed discussion), however, they have been mostly avoiding the genomic stocks until a couple of weeks ago. Editas Medicine (EDIT) shares returned more than 150% over the last month, but there are other genomic stocks that investors can buy at still relatively cheap prices.
In order to identify the 12 best genomic stocks to buy now, we narrowed down the 40 holdings in the Global X Genomics & Biotechnology ETF (GNOM) as of December 21, 2020, to the 20 biggest positions and we were able to sort them using the hedge fund sentiment scores. Editas Medicine didn’t make our list because hedge funds thought there are 18 other genomic stocks that are better values in this market.
Our in-house research shows that by using the hedge fund sentiment results, we can identify in advance a small group of stocks that can outperform the S&P 500 index on average by double digits annually. For instance, the portfolio of our monthly newsletter’s stock picks has beaten the market by over 78 percentage points since March 2017 (see the details here). We have also publicly posted some portfolio holdings of our monthly newsletter. In October we shared this real estate stock idea and it’s been up more than 50 percent since then.
Based on our hedge fund sentiment data, we present to you, the 12 best genomic stocks to buy now among the 800+ hedge funds tracked by Insider Monkey:
12. PTC Therapeutics, Inc. (NASDAQ:PTCT)
No of HFs: 25
Total Value of HF Holdings: $209 Million
We start our list of 12 best genomic stocks to buy now with PTC Therapeutics, Inc. The company provides biopharmaceutical products and develops orally administered drugs for genetic disorders, oncology, and infectious diseases. During the third quarter of 2020, the company reported total revenue of $118.4 million.
Recently, the company announced an expanded partnership with Centogene NV. The companies will work together to provide genetic testing and 3-O-Methyldopa biomarker analytics to help identify patients with Aromatic L-Amino Acid Decarboxylase deficiency. Centogene’s Senior Vice President of Business Development mentioned that the partnership will help widen the geographical scope of the no-cost testing program.
We are pleased to expand our partnership with PTC to support the REVEAL CP study, a global screening study designed to determine the prevalence of AADC deficiency in patients with cerebral palsy of an unknown cause. Together, we will offer genetic testing and 3-OMD biomarker analytics and widen the geographical scope of the no cost testing program, all of which are critical steps as we work together to bring hope to patients living with this rare genetic disorder.
In an article, PTCT was mentioned as one of the top 10 healthcare stocks for the future.
11. Caredx, Inc. (NASDAQ:CDNA)
No of HFs: 25
Total Value of HF Holdings: $228 Million
Caredx, Inc. is a leading precision medicine solutions company that is focused on the discovery, development, and marketing of clinically differentiated healthcare solutions for transplant patients. During the third quarter of 2020, CDNA reported revenue of $53.4 million, an increase of 58% compared the same period of 2019.
The top hedge fund holder of this stock is D.E. Shaw’s DE Shaw which had $48 million invested in the stock at the end of September.
10. Pacific Biosciences (NASDAQ:PACB)
No of HFs: 25
Total Value of HF Holdings: $380 Million
PACB ranks 10th in our list of the best genomic stocks to buy now. Pacific Biosciences is an American biotechnology company that was founded in 2004. The company develops and produces systems for gene sequencing. The company’s first instrument was called the “PacBio RS” and was selected by GATC Biotech as its first European service provider in late 2010. During the third quarter of 2020, the company reported total revenue of $19.1 million.
In an article, we mentioned Baron Discovery Fund’s comments on PACB
“Pacific Biosciences of California, Inc. (“PacBio”) offers a differentiated long-read DNA sequencing platform for genetic analysis. We initiated a position in August when the company did a $100 million secondary share offering with proceeds to be used to support the company’s organic growth. Its proprietary SMRT cells and chemistries enable longer strands to be read at a time, which can capture lengthy genomic variations that may be missed by short-read sequencers such as those made by market leader Illumina. PacBio’s “HiFi” reads are based on circular consensus sequencing, which not only enable long reads, but also achieve high-read accuracy (a critical deficiency in early long-read technologies). The total addressable market for long-read analyzers is estimated at $2.5 billion by 2022, and with just single-digit penetration, we believe PacBio has room for significant growth as it commercially executes on its innovative platform. Cost has historically been a barrier to adoption, but the company has been investing in significantly improving throughput and cost per sample. In September 2015, it announced the Sequel System with SMRT Cell 1M, which improved throughput 7-fold relative to the legacy RS system. Then, in April 2019, it introduced the Sequel II system with SMRT Cell 8M to improve the throughput a further 8-fold (15-fold when taking into consideration chemistry and software upgrades released in the fourth quarter of 2019). Furthermore, PacBio recently appointed Christian Henry as its new CEO. Christian was previously Chief Commercial Officer at Illumina, and we believe his expertise can help guide PacBio to a commercial inflection point. We are excited to be able to own a company of this quality that is still a small cap.”
9. Crispr Therapeutics AG (NASDAQ:CRSP)
No of HFs: 26
Total Value of HF Holdings: $405 Million
CRSP ranks 9th in our list of the best genomic stocks to buy now. CRISPR Therapeutics AG is a bio-technology company that operates in Switzerland. The company focuses on the manufacturing and marketing of biological transformative gene-based medicines and other related products. During the third quarter, the company reported a total collaboration revenue of $0.1 million.
The top hedge fund holder of this stock is Joseph Edelman’s Perceptive Advisors, which had over $112 million invested in the stock at the end of September.
8. Qiagen NV (NYSE:QGEN)
No of HFs: 29
Total Value of HF Holdings: $580 Million
Qiagen NV is a provider of sample and assay technologies for molecular diagnostics, applied testing, academic and pharmaceutical research. The company provides its workflows to customers in molecular diagnostics, applied testing, pharma, and academia. During the third quarter of 2020, the company’s sales rose 26% at actual rates and constant exchange rates to $483.88 million as compared to $382.7 million in the same period of 2019.
Recently, Qiagen NV mentioned that they would be expanding their Germantown manufacturing facility as they ramp up Covid testing. Chief Executive Officer of Qiagen NV mentioned
2020 has demonstrated QIAGEN employees worldwide stepping up to deal with demanding changes. We have responded to the demands of the COVID-19 pandemic by launching novel testing solutions and ramping up production capacity.
As we finish 2020 with an improved outlook, we have confidence in our future and in the benefits of our unwavering focus on our five pillars of growth. We expect another strong performance in 2021, balancing investments in our portfolio to create new organic long-term growth opportunities with improved near-term earnings to deliver significant value creation
7. Blueprint Medicines Corp (NASDAQ:BPMC)
No of HFs: 34
Total Value of HF Holdings: $1.2 Billion
BPMC ranks 7th in our list of the best genomic stocks to buy now. Blueprint Medicines Corp is a biopharmaceutical company that focuses on the distribution and development of treatments for patients with genomically defined diseases driven by abnormal kinase activation. During the third quarter of 2020, the company reported a revenue of $745.1 million.
The top hedge fund holder of this stock is Eric Bannasch’s Cadian Captial, which had over $249 million invested in the stock at the end of September.
6. Sarepta Therapeutics, Inc. (NASDAQ:SRPT)
No of HFs: 35
Total Value of HF Holdings: $880 Million
SRPT ranks 6th in our list of the best genomic stocks to buy now. Sarepta Therapeutics, Inc. is a biotechnology company that focuses on research and drug development for treating rare, infectious, and other diseases.
Recently the company announced the results of their ongoing MOMENTUM study, a global Phase 2 clinical trial of the next-generation treatment for patients with Duchenne muscular dystrophy. Doug Ingram, President and Chief Executive of Sarepta mentioned,
“Sarepta’s PMO RNA technology is a vital platform on which we design therapies to treat those with Duchenne muscular dystrophy. Our next-generation PPMO technology is designed to increase cell penetration with the goal of offering significantly improved efficacy with more convenient dosing in Duchenne patients amenable to exon skipping, While patient numbers in each dose arm are small, the higher tissue concentration, exon skipping and dystrophin production in the 20 mg/kg dosing group were observed at an early 12-week timepoint and with far less cumulative drug exposure when compared to our current PMO technology. We know from our experience with PMOs that exon-skipping and dystrophin increase over time, and these results along with our preclinical experience, give us confidence as we dose escalate and continue to advance our PPMO exon-skipping therapies for Duchenne, including another five potential therapies that have already been designed, and explore the utility of the PPMO RNA platform for new disease indications.”
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Disclosure: None. 12 Best Genomic Stocks To Buy Now is originally published at Insider Monkey.
