TS2B: Growth Edition, Second Monday of the Month
Good Monday everyone and welcome to the BCB Cyber Series that takes on the Tech stocks that can provide the cyber-fuel we need to pursue our digital wealth passions.
Today, we are back on track in the new month and a new year with Tech-Growth Companies. As always, we are digging for the cyber fuel we need. For all growth stocks, we are looking for top-line revenue growth of 20% or more!
Growth of Bionano Genomics
This week we are diving into Bionano Genomics, a much talked about stock opportunity as of late, to see what all the fuss is about. As BioTech, Health, and Genomics are all issues of particular importance to BCB Cyber, we couldn’t pass up this opportunity.
Before we dive too deep though, as always BCB Cyber loves the deep dive, we strongly advocate that you don’t act solely on anyone’s opinion, not even ours! Make sure we are all thinking for ourselves as self-definers and making our own decisions. In the end, the responsibility is on each one of us as individuals. So decide wisely!
Jumping right in now, we do these quick deep dives so we can all get the info we need but also do so in a way that keeps us going in our day. To do this the BCB Cyber way we cover 3 quick pieces of important information. First, we tackle the story to find out who and what the company is, second, we look at the numbers both positive and negative, and finally we discuss our own BCB Cyber position.
This is TS2B, Tech Stock to Buy, hi-tech growth edition, and this week we are going to take on Bionano Genomics, the San Diego, CA life science instrumentation company blowing the doors of genomics wide opening with its tech, known as Saphyr. This product is set to disrupt the way we visualize the genome and detect variation in the genome (a complete set of the genetic material in a cell) caused by disease.
Thanks to Bionano Genomics
We’re gonna be honest, Bionano Genomics is a rule breaker for us as it does break the 20% rule. In the chart above we did see that as BNGO from 2016 to 2018, did meet this guideline on revenue growth it has recently had a few slips. However, there is a lot going on with this company that requires further examination. So as always with the riskier plays, we are gonna wade in slowly and keep a watchful eye.
Bionano Genomic’s Saphyr though has incredible promise to help reset our baseline capacity for genomic mapping (examining the layout of our genetic material). Where they go from here will definitely be a story worth following.
1 – STORY
For us in this review, the story of Bionano Genomics is all about getting the bigger genetic picture on disease, more clearly, easily, and at a better cost. Better yet, that’s exactly the news we see coming out about this incredible BioTech.
Furthermore, there is little doubt that the quality of Bionano Genomic’s Saphyr has been given industry approval and new developments are underway that could lead to very big things not only in humanity’s ability to fight disease but also in the potential for Bionano Genomic’s ability to succeed as a company. Recognized in the US by the College of American Pathologists (accredited) and partnered with Praxis Genomics (a leading tech health company in end to end diagnostics), Bionanon Genomics is on a bright path.
Bionano Genomic’s technology, known as Saphyr, simply does it better and more easily; not to mention cheaper, as noted above. Where other programs have come up short in being able to image variations in a variety of diseases, Saphyr comes through.
Better yet, adoption is readily at hand by the medical community as not only does Saphyr perform genomic mapping for less and more completely, but they add ease of use and streamlined efficiency.
Industry recognized, reduced costs, and ease of adoption all provide a unique opportunity for this BioTech to play a significant role in genomic mapping of the future. We at BCB Cyber tend to agree with Maxim analyst Jason McCarthy in that this company has the potential to be a game changer.
2 – BY THE NUMBERS
BCB Cyber loves to follow five specific metrics: Sales/Revenue Growth (noted above), Forward Price to Earnings Ratio, Return on Assets, Operating Margin, and Debt Considerations.
Again we see here that revenues have stagnated for Bionano Genomics. However for 2021 analysts are predicting a revenue jump to $17.97 Million on average from a paltry $7.45 Million in 2020 (anticipated). This would be nearly a 50% increase over their high in 2018.
One of the biggest metrics that makes this stock such a risk is not only the lack of profitability demonstrated by not having a P/E but that Price to Sales and Price to Book have jumped to such extraordinary highs. Market Cap alone has jumped nearly 22x since December of 2019.
It is clear that with the leap and bound in market capitalization over the last couple of years that the market sees an opportunity. However an Operating Margin of -453% and a Return on Assets of over -68%, yes those are both negative, clearly demonstrate how tough being in this business can be.
These are tough statistics to overcome yes, but the opportunity is there. As the market too has realized this, the company has seized the opportunity as they should and begun to raise money at the increased market valuations. The most recent raise announced will price at $3.05 per share. In addition, the current balance sheet demonstrating a cash position that allows the company to cover debts, will in combination to the most recent raise offer Bionano the chance to whether the storm while they push for industry adoption of Saphyr.
Bionano has a tough uphill challenge ahead of itself. However, with a prime tech and a new, more well funded cash position provided by the market, there is a lot of opportunity here. However, it does appear that with a stock price that ran to around $7 last week, an settling in just under $5 as we predicted last week, we believe the stock to be a little hot. While we do like this stock a lot, we come into it with open eyes.
3 – THE BCB CYBER TAKE
As of this morning, on 01.11.21, our stake in Bionano Genomics sits at 0.95% of our portfolio with a cost basis of $4.74. As the stock continues to trade up (this morning it is moving to nearly $6 pre-market), we will remain patient. As our desired position, being such a risky position, sits at 1% and we are nearly there. As the price bounces around in the coming weeks and months, we’ll be looking to add if the market reacts down to maintain our position. We’ll be investing for the long term opportunity, our target to buy always under $5. However, we’ll also be prepared to ride the wave. We’ll be building!
Remember, we are just like the masses, struggling to make ends meet and build our future. So, we start building and keep doing our homework. This is just what we need to start us on our journey toward cyberizing our lives.
BCB Cyber believes in the potential for this risky, tech innovator and loves the story. However, this is definitely a stock worth buying at the right price and one that BCB Cyber believes to be the right fuel for the fire! Remember we balance our perspective and cyberize our wealth over a longer term of 5 years or more. We will definitely be looking to add to our position, with the right portfolio proportions of 1 percent and at the right price.
Remember, as always, think for yourself, do your own homework, and cyberize your life with the best in disruptive tech. Learn more in our Wealth Section and dive deeper into Establishing the Baseline on BCB Cyber.com!