A market pullback always provides an opportunity for investors to buy quality stocks at a lower multiple. In the last few trading sessions, the equity market has remained choppy allowing noted investor Cathie Wood to buy beaten-down growth stocks.
Here, we take a look at three healthcare stocks that Cathie Wood’s company Ark Invest has been purchasing hand over fist.
Shares of life-equipment manufacturer Berkeley Lights (NASDAQ: BLI) are down 75% from all-time highs. Recently, it has grossly underperformed the market due to a short-seller report that tore into the company. However, Cathie Wood’s Ark Genomics ETF increased its position in Berkeley Lights that is trading at a massive discount right now.
A company that manufacturers lab equipment, Berkeley Lights is currently valued at a market cap of $1.7 billion. These equipments are quite expensive as they can categorize individual cells on a semiconductor plate enabling pharma companies to inspect responses on experimental medications.
In the first six months of 2021, Berkeley Lights sales have risen by 54% year over year to $8.3 million and are forecast to grow by 41.5% to $91 million this year. The top-line is expected to accelerate by 43.4% to $130.5 million in 2022. This top-line expansion will allow the company to narrow its loss per share from $1.39 in 2020 to $0.85 in 2022.
Analysts tracking the stock have a 12-month average price target of $73 for Berkeley Lights which is almost 200% higher than its current trading price.
Personalis (NASDAQ: PSNL) stock touched an all-time high in January 2021 and has since declined by 56%. The company operates in the cancer genomics segment and provides sequencing and data analysis services to support the development of cancer therapies. Personalis offers a platform called NeXT which provides data for cancer therapy development, personalized therapies, therapy selection as well as diagnostics.
The company serves biopharma customers, universities, government entities, and diagnostics companies. It derives a significant portion of sales from the MVP (Million Veteran Program) which is a government-backed research program to understand how genes, lifestyle, and other factors have an impact on health.
The NeXT Platform tracks over 20,000 genes to learn what causes few immune systems to attack tumors while the same is not possible in several other cases.
Valued at a market cap of $950 million, Personalis is forecast to increase sales by 8.1% year over year to $85 million in 2021 and by 14.2% to $97 million in 2022. The stock is trading at a forward price to sales multiple of 11x which is steep considering its growth estimates and widening losses. Wall Street expects a loss per share to touch $1.91 next year, up from $1.2 in 2020.
The final stock on my list is Invitae, a company valued at a market cap of $6.63 billion. Invitae (NYSE: NVTA) is a medical genetics company that integrates genetic information with healthcare decision-making.
It offers genetic tests in several clinical areas including pediatrics, oncology, hereditary cancer, neurology, metabolic conditions and rare diseases. The stock is down 45% from record highs allowing Cathie Wood to buy the dip.
Wall Street expects Invitae to increase sales by 73.8% to $486 million in 2021 and by 40% to $680 million in 2022. This will help the company to narrow its loss per share from $2.78 in 2020 to $2.35 in 2022.
Analysts have a 12-month average price target of $41 which is 30% above the current trading price.
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