As the pandemic forced the world into lockdowns over the past year and accelerated the adoption of next-generation technologies, services like video chat and telehealth have taken center stage.
Meanwhile, a technology with the potential to up-end the way we carry out everything from medical testing to data storage has come into its own. I’m talking about the process of figuring out the DNA makeup of just about any organism you can think of, known as genomic sequencing.
Researchers in the field describe the advent of the far-reaching technology as on par with the importance of discovering the microscope.
And while we’re likely still just in the beginning stages, recent advances in computer technology have lit a fuse under the industry.
Nearly every aspect of the public health response to COVID-19 has involved genetic sequencing or testing of some sort. Moderna, Inc. (MRNA) developed its SARS-CoV-2 vaccine at a quick pace with only the genetic sequence of the virus at its disposal, as opposed to the typical approach to vaccine production that relies on collecting actual samples of the virus.
Genetic sequencing was needed to develop the COVID-19 testing kits used in the testing devices called P.C.R. machines.
The technique has also been used to track dangerous variants of the virus that have begun to spread worldwide, in the meantime rapidly advancing the scientific field of genomic epidemiology.
The Human Genome Project, which for the first time sequenced the human genome’s three billion “base pairs” of genetic code, came to completion in 2003 after 13 years of work and more than $3 billion in funding.
By 2014, researchers began to use the technique to track variants of the deadly Ebola virus in Africa. They learned they may be able to interrupt or impede the spreading infections by finding unseen pathways of transmission through contrasting genetic codes. Scientists deployed this genetic surveillance strategy with the Zika virus in Central and South America.
According to the pioneering Harvard geneticist George Church, sequencing genomes is currently about 10 million times cheaper and 100,000 times better quality than it was only a few years ago.
That’s led to the rise of a massive market. The genetic sequencing market alone is expected to grow from $3.99 billion in 2020 to $11.7 billion in 2028, according to Grand View Research.
Genomics also has the potential to usher in a new wave of technologies in various fields, from personalized medicine to environmental monitoring. The gene-editing technology known as Crispr, which uses genetic sequencing, may help scientists repair mutations in our genome that cause life-threatening diseases, like sickle cell anemia or Huntington’s disease.
Just last month, Washington University researchers showed that whole genome sequencing can now be used as a routine part of patient care. The study, published in the New England Journal of Medicine, showed that genome sequencing for patients with blood cancer is typically better and costs about the same (about $2,000 per patient) as using conventional testing methods.
New research from the Massachusetts General Hospital and the Harvard T. H. Chan School of Public Health uncovered 13 new variants of Alzheimer’s disease using whole genome sequencing.
Genetic sequencing is used in what are known as “liquid biopsies,” which analyze a small amount of blood to spot cancers early.
Researchers are also looking for ways to store our massively growing buildup of electronic data on tiny strands of DNA, which have the capacity to far surpass the storage abilities of any existing electronic device. In fact, Church and his colleagues determined that the bacterium Escherichia coli can store 1019 bits per cubic centimeter. That’s dense enough to store the entire world’s data supply for a year on a one side of metric cube of such DNA material.
One fundamentally superior company that’s taking full advantage of this revolution in genomic sequencing is Fulgent Genetics, Inc. (FLGT).
Last month, the company announced its fourth-quarter revenue surged an incredible 3,400% to $295 million, compared to $8.4 million in the same quarter a year ago. During the same period, the company’s earnings rose to $166.3 million or $6.16 per share, compared to a loss of $0.3 million, or $0.01 per share. The analyst community was expecting revenue of $199.4 million and earnings of $4.05 per share, so Fulgent Genetics posted a 77.4% revenue surprise and a 52.1% earnings surprise.
For 2021, the company expects to bring in about $800 million in sales, which would represent 90% year-over-year growth. Of that figure, about $70 million will come from next generation sequencing testing. Interestingly, the Centers for Disease Control and Prevention (CDC) recently awarded Fulgent a contract to test for SARS-CoV-2 variants on an ongoing basis.
CEO Ming Hseih said that while the majority of Fulgent’s business of late has come from COVID-19 testing, the company is laying a strong foundation for continued growth, including its direct-to-customer genetic testing platform, Picture Genetics.
Fulgent currently earns a Total Portfolio Grade of “A” from my Portfolio Grader, with an “A” for its Quantitative Grade, which tracks institutional investor buying pressure, as well as an “A” for Sales Growth and Earnings Surprises. It also earns a spot on my Platinum Growth Club Model Portfolio, as does another company that’s benefitting from the surge in genetic testing.
How to Play the Genomic Sequencing Trend
I fully expect genetic sequencing technology will grow even cheaper and will become a regular part of our healthcare visits in the coming months and years.
As researchers use the information encoded in our genome to more quickly and efficiently target diseases and find potential treatments, as well as map the spread of contagions around the world and invent new ways to store data, savvy investors will take note.
However, the real profit potential will come from the fundamentally superior stocks, like the one I mentioned above.
In fact, I personally recommended several in my services, all of which my Platinum Growth Club subscribers have full access to.
But the genomic sequencing industry isn’t the only way to make money, there are a variety of other sectors, technologies and trends that are poised to prosper. Cloud computing, artificial intelligence (AI) and 5G are just a few others I have on my radar. And I’m pleased to say that my Platinum Growth Club subscribers are perfectly positioned to benefit from these trends and much more.
You see, I have more than 100 stocks across all of my services, and each and every one boasts strong earnings and sales growth. This is important because we’re about to head into the first-quarter earnings season. This should be a phenomenal earnings season as it represents peak momentum for earnings and sales. So, I fully anticipate my stocks to post wave-after-wave of positive earnings results, which, in turn, should drop kick and drive them higher.
Of course, you don’t have to invest in all 100+ stocks. If you’d rather start small, I’ve got you covered there, too. My Platinum Growth Club service comes with my exclusive Model Portfolio.
I handpick all of my Model Portfolio recommendations from my different stock services – Growth Investor, Breakthrough Stocks and Accelerated Profits – so you can rest assured that you’re always invested in the crème de la crème.
The Editor (Louis Navellier) hereby discloses that as of the date of this email, the Editor (Louis Navellier), directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Fulgent Genetics, Inc. (FLGT)