COMMENTS POLICY: People are expected to behave in a manner that enriches the conversation. Criticisms are strongly encouraged as long as they are presented in a civil manner. Any rude obnoxious attack-the-messenger rubbish will be given one warning. After that, comments will be removed and the individual who made them will be blocked.
I was hoping twist would be a good buy during this current dip. Of the existing small cap genetics companies I’m really interested in who has the fundamentals to still be around for 20+ years, I’d love to see a video on someone in this space you’re optimistic about. Btw keep up the great content 👌🏼
Cheers for the feedback Adam! Twist may very well be a good buy during the dip, but that also depends on where your current position sits. We've been rather shy about adding to existing positions given the market volatility so we've set a loose rule that says we want to be well below our cost basis before adding to any existing position. Twist is getting there, but not quite yet. There's also the obvious concern about DNA Script. If we do add some shares of Twist, we'll let premium subscribers know when we do. We are actively adding to positions and added a stock last week and another stock the week before. That information is passed on to paying subscribers who help make this possible. That said, your suggestion is a good one - post optimistic pieces, not just negative ones. In the synbio space that's a bit tough right now. We can always preach about how much we admire Illumina, but we're waiting for that whole Grail thing to sort itself out first.
We've researched both extensively - just check our website. Also some videos out there we did on Ginkgo, last being this one: ua-cam.com/video/eBuQJCAeNfU/v-deo.html
@@joepiv ginkgo is my largest holding at $3, however I notice they refer to Twist a lot as their partner but i struggle to understand the difference between writing DNA and what Ginkgo do when they receive that DNA.
@@MrEvertonian20 The best thing to do is go through all our research as it's a rather complicated story that's not easily summer up. It's all under our synbio tag here: www.nanalyze.com/tag/synthetic-biology/ If you run into the paywall, just sign up for free 30 days and read all you want. :)
This is a really good analysis, an objective view of the pros and cons, much appreciated. I tried using a DCF model to project out their future cashflow assuming that the current rate of revenue growth outpaces the rate of increase in expenses, looks like they could become profitable in 5-6 years. Of course, my projections are arbitrary and meaningless without a good understanding of their business fundamentals, sector trend and competitions. Your research brings tremendous value, hope to see more content.
Thanks so much for taking the time to share your thoughts Jeff as we look to our readers to help provide direction. We always try and analyze stocks while assuming that the reader should have no prior knowledge of finance or technology. Trying to understand what a business actually does can be quite challenging. As you said, that's a prerequisite to then being able to run proper valuation models. Great to hear you're finding value in our content!
Why do you think they burn so much money on SG&A if they have a leadership position in DNA synthesis? I am not too worried about benchtop instruments. Their large customers would much rather outsource the oligo production and QC.
Thank you for the comment. The typical concern around high SG&A is the company is spending $1.50 on sales commissions for a $1 in sales. This stuff better be selling itself otherwise it's a solution looking for a problem.
@@Nanalyze Any insight on the nature of the spend? I am not aware of active marketing programs. The most worrisome trend is the absence of leverage in the business model. The ratio of SG&A to revenue has stayed around 1 even as quarterly sales have increased 7x
Sales people actively selling perhaps? We're not aware of any way to get insights into such spending aside from hearing from industry people who actively understand the business very well. Good observation.
Very good question. Hate to direct you to an article behind a paywall but we covered their IPO here: www.nanalyze.com/2021/06/codex-dna-stock-desktop-dna-factory/ You get a freebie though so you should be able to read that piece. It's a very small company ($300 million) so we wouldn't invest unless it was a $1 billion MC or higher. We actually were considering an update post-IPO so stay tuned. If we do that, we'll drop it as a synbio video. Also, we mention them briefly I believe in our UTHR piece which talks about what happened to Synthetic Genomics.
COMMENTS POLICY: People are expected to behave in a manner that enriches the conversation. Criticisms are strongly encouraged as long as they are presented in a civil manner. Any rude obnoxious attack-the-messenger rubbish will be given one warning. After that, comments will be removed and the individual who made them will be blocked.
I just started working for twist and they give you stock as an employee, it's really neat how you covered this. It's almost a little surreal 😂
The typically give you stock "options" which is the option to purchase the stock at a particular price (the strike price). Thank you for the comment!
I was hoping twist would be a good buy during this current dip. Of the existing small cap genetics companies I’m really interested in who has the fundamentals to still be around for 20+ years, I’d love to see a video on someone in this space you’re optimistic about. Btw keep up the great content 👌🏼
Cheers for the feedback Adam! Twist may very well be a good buy during the dip, but that also depends on where your current position sits. We've been rather shy about adding to existing positions given the market volatility so we've set a loose rule that says we want to be well below our cost basis before adding to any existing position. Twist is getting there, but not quite yet. There's also the obvious concern about DNA Script. If we do add some shares of Twist, we'll let premium subscribers know when we do.
We are actively adding to positions and added a stock last week and another stock the week before. That information is passed on to paying subscribers who help make this possible.
That said, your suggestion is a good one - post optimistic pieces, not just negative ones. In the synbio space that's a bit tough right now. We can always preach about how much we admire Illumina, but we're waiting for that whole Grail thing to sort itself out first.
What’s the difference between ginkgo and twist then? They both build DNA?
We've researched both extensively - just check our website. Also some videos out there we did on Ginkgo, last being this one: ua-cam.com/video/eBuQJCAeNfU/v-deo.html
@@joepiv ginkgo is my largest holding at $3, however I notice they refer to Twist a lot as their partner but i struggle to understand the difference between writing DNA and what Ginkgo do when they receive that DNA.
@@MrEvertonian20 The best thing to do is go through all our research as it's a rather complicated story that's not easily summer up. It's all under our synbio tag here: www.nanalyze.com/tag/synthetic-biology/ If you run into the paywall, just sign up for free 30 days and read all you want. :)
This is a really good analysis, an objective view of the pros and cons, much appreciated. I tried using a DCF model to project out their future cashflow assuming that the current rate of revenue growth outpaces the rate of increase in expenses, looks like they could become profitable in 5-6 years. Of course, my projections are arbitrary and meaningless without a good understanding of their business fundamentals, sector trend and competitions. Your research brings tremendous value, hope to see more content.
Thanks so much for taking the time to share your thoughts Jeff as we look to our readers to help provide direction. We always try and analyze stocks while assuming that the reader should have no prior knowledge of finance or technology. Trying to understand what a business actually does can be quite challenging. As you said, that's a prerequisite to then being able to run proper valuation models. Great to hear you're finding value in our content!
Im intrigued good to know
Why do you think they burn so much money on SG&A if they have a leadership position in DNA synthesis? I am not too worried about benchtop instruments. Their large customers would much rather outsource the oligo production and QC.
Thank you for the comment. The typical concern around high SG&A is the company is spending $1.50 on sales commissions for a $1 in sales. This stuff better be selling itself otherwise it's a solution looking for a problem.
@@Nanalyze Any insight on the nature of the spend? I am not aware of active marketing programs. The most worrisome trend is the absence of leverage in the business model. The ratio of SG&A to revenue has stayed around 1 even as quarterly sales have increased 7x
Sales people actively selling perhaps? We're not aware of any way to get insights into such spending aside from hearing from industry people who actively understand the business very well. Good observation.
Thanks Joe for this excellent analysis.
I am holding a few shares at a steep loss as well
How does what DNAY Codex does, compare with TWST?
Very good question. Hate to direct you to an article behind a paywall but we covered their IPO here: www.nanalyze.com/2021/06/codex-dna-stock-desktop-dna-factory/
You get a freebie though so you should be able to read that piece.
It's a very small company ($300 million) so we wouldn't invest unless it was a $1 billion MC or higher. We actually were considering an update post-IPO so stay tuned. If we do that, we'll drop it as a synbio video. Also, we mention them briefly I believe in our UTHR piece which talks about what happened to Synthetic Genomics.
Absolutely great content! Thank you.
Thank you very much for taking the time to leave some kind words Teemu!