Sunday, February 11, 2018

Battered Back Below $3, PacBio's Shares Offer High-Risk Upside

If you like to trade, Pacific Biosciences (or “PacBio”) (PACB) may be right up your alley. If you’re an investor looking to play the ongoing growth in sequencing with a company that has brought differentiated technology to lab, well, this stock may well give you grey hair and some sleepless nights. These shares were at $2.50 in the spring of 2013, over $6 in the spring of 2014, in the $5-$6 range in the spring of 2015, close to $10 in the spring of 2016, in the $5’s again in the spring of 2017, and now back in the $2’s (albeit with a higher share count than in 2013).

This volatility has not come without good reasons, as PacBio has yet to really break through with its technology and products. The installed base does continue to grow, as does usage, but the adoption curve has been very unpredictable due to company missteps, budget uncertainties, and competitive offerings. While this is a very high-risk stock, I continue to believe that there are legitimate, meaningful uses for PacBio’s technology and that ongoing improvements will help reliability and drive a more consistent adoption curve. With a fair value in the $5 range, this very speculative name is worth another look today.

Read more here:
Battered Back Below $3, PacBio's Shares Offer High-Risk Upside

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