Top 5 Best Genomics Stocks to Watch 2024
The term ‘genomics’ is likely not the most known term amongst the general public.
That said, have you ever heard of genomics stocks? For those taking an interest in trading and finance, one may have come across it – Especially considering the booming trends in biotechnology and biohacking.
Genomics stocks, also known as genetic stocks or genome stocks, and the genomic industry can be considered one of the leading revolutionary innovation areas in the future regarding human evolution.
Sounds exciting, right? It is. Keep reading to learn more about what genomics is, exactly, and what are some of the potentially best genomic stocks to watch, along with advantages and disadvantages.
Table of Contents
What are Genomics Stocks?
Before we get into genomics stocks and the best genomics stocks to watch, let’s give you a bit of background on the genomics industry.
Coming from the term ‘genome’, genomics is basically the study of genes or genetics and their functions (and how to manipulate them).
While we don’t want to go too deep into biology, genomes are what make up our DNA which is very much associated with our hierarchical composition that makes up our characteristics as individual humans.
So, why would genomic stocks be popular in the first place for traders and investors?
Perhaps you’ve heard of, or even done yourself, a DNA test – which has arguably become very popular over the last few years.
People in general have become more interested in understanding their DNA and the potential solutions to manipulate or ‘hack’ them for a healthier, longer life.
To overview the sub-vertical of the genomics industry, we can break it down into three categories.
First, genetic sequencing/analysis; this is basically covering genetic research which is conducted through genetic testing.
Second, genetic diagnostics; helps to identify genetic variations which in turn can help to identify potential future underlying health conditions. One can imagine how in demand this testing could become within the healthcare industry.
Lastly, genetic editing; by, literally, having the technology to edit our genetics, we can make disease recovery and prevention a viable solution.
Now that we’ve covered a reasonable understanding of genomics and hence the importance of genomics stocks in finance, let’s take a look at some of the advantages and disadvantages of genomics stocks.
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Advantages and Disadvantages of Genomics Stocks
As with any industry, regardless of how exciting or trendy it is, there are simply always advantages and disadvantages.
Especially with a relatively new industry such as genomics, risks and volatility can run high and it's important to consider all scenarios before investing or trading.
Advantages of Genomics Stocks
- With many innovation investors, such as Cathie Wood, this stock sector currently appears to be up-trending and attracting new investors. Cathie Wood has established a Genomic Revolution ETF via her Ark Invest company.
- While genomics is a trendy topic, the science behind it could potentially benefit humanity in that it is a revolutionary technology to aid disease prevention and recovery.
- According to USNews.com finance analysts, the genomics market could reach $59.5 billion by 2027.
Disadvantages of Genomics Stocks
- Like any new and trending stock sector, it naturally comes with much added risk and volatility compared to established sectors. This is a very important disadvantage to consider as well as a reminder to always first establish your risk tolerance in line with your risk management strategy.
- According to the S&P Biotechnology Select Industry Index, genomic stocks were generally in decline during the year 2022.
- Given the immaturity of the genomic stock sector, it yields a risk that companies which exist today, may not in the future; this can be due to acquisition, bankruptcy or other factors.
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What are the Best Genomics Stocks to Watch?
Now that we understand both the advantages and disadvantages of genomics stocks, what are potentially some of the best genomic stocks to watch?
- Illumina is considered to be one of the leading companies in the sub-sector of genetic sequencing.
- Illumina has a current market cap of $23.82 billion (as of September 2023), showing a strong position in the sector.
- From when the company started in 2001 up until 2021, they have had consistent growth in its market cap.
- However, in 2022, the market cap was down -46.51% from 2021.
- The potential for growth in gene sequencing is not what it used to be, which could be a negative sign if Illumina can’t establish strong long-term leadership.
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Exact Sciences Corp works with molecular diagnostics, or genomic diagnostics, with a main focus on various cancers and how to detect such cancer at an early age. They are a US company.
- Exact Sciences developed the Cologuard, an at-home colon cancer test. It is considered the company’s biggest revenue driver ($1 billion in 2022) and is one of the most popular options in the US consumer market.
- Exact Sciences have established its niche in genomic cancer diagnostics, which could be a positive for investors considering the business has a very specific vision. They have also been established since 1991, displaying authority in the sector.
- As of September 2023, the 52-week range is between $29.27 - 100.31, suggesting high volatility and higher risk.
- The company does not offer a dividend, which can be a downside for some investors.
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3. Invitae Corp
Invitae offers genetic testing which can be integrated into medical practices easily and efficiently. They were also established in the US, in San Francisco, CA.
- Compared to competitors, Invitae offers less expensive genetic testing which can test thousands of genetic variants (rather than only one). Their product offering appears competitive.
- With the current price of around $2.50 per share (January 2023), it would be considered an affordable stock for all levels of traders and investors.
- With a 52-week range of $0.79 - 3.77, it appears to be a very volatile stock which increases risk.
- Invitae also does not offer a dividend which can be unattractive.
Fulgent Genetics works within the sub-sector of genomic sequencing specializing in the area of infectious and rare diseases. They are also based in California, USA.
- Fulgent had its big breakthrough in 2020 during the pandemic, where it capitalized on covid-19 testing. This has opened the doors for growth in their other testing product offerings, which could be a positive for the future stock price.
- According to their income statement on YahooFinance!, they have grown steadily Year-over-Year (YoY) from 2019 to current (September 2023).
- Fulgent faces much competition in the sequencing and testing sector, which could make the future volatile for stock price.
- The projected Earnings Per Share (EPS) trend is currently at –2.18 for 2023, which could mean a rough year for the company (although this is only a projection).
CRISPR Therapeutics is a Swiss-American genomic editing company based out of Switzerland. They focus on developing gene-based medicines for serious diseases.
- According to YahooFinance!, CRISPR has a projected revenue estimate of $151.09 million by the end of 2023. This is up from $2.56 million in the year 2022, a significant increase.
- The company has pending approvals from both Europe and U.S Food and Drug Admin for experimental gene-editing therapy. If approval goes through, this could be very beneficial to the stock price.
- While the gene-editing drugs could be a major breakthrough, the future of the success is still questionable making this stock potentially a higher-risk option.
- As of January 2023, the 52-week range is $38.94 - 86.95, proving it is highly volatile.
Conclusion: Genomics Stocks
While the genomics stock sector is certainly interesting, it is equally quite complicated. With a topic so advanced scientifically, it’s reasonable to understand why.
One thing we can establish is that this sector will indeed be volatile into the foreseeable future, which is likely the most important aspect for investors and traders to consider before getting involved.
On a final thought and elevated perspective, genomics stocks arguably have the same qualities as tech stocks, in that they are innovative and daring. Is this right for you as an investor or trader? Only you can decide.
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Are genomic stocks a good investment?
Whether or not genomic stocks are a good investment is always completely subjective; it depends on each individual investor, their knowledge in the sector, risk tolerance and investment style.
What is the future of genomic stocks?
In 20222, many genomic stocks saw a decline, however the market is projected to grow 17.3% annually and potentially reach $21 billion by 2030.
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