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That's a great question on valuation. The presenter should have touched on that because simple valuation ratio works for $SDGR. Right now its around 16 (3571 / 228 | market cap / annualized revenues) so that's a bit high (our catalog average is 6.5). We wouldn't invest in anything over 20, so yes, it's starting to get rich for us.
Great job 👏 Joe . I have Abcellera & Recursion , both less than 1 % of my Portfolio Also I have ABSCI which would not be on your radar due to its low market capitalization of 140 million Bought all three of these at or near their 52 week lows
Glad you enjoyed Doug! Wonder if ABSCI was using the "generative AI drug creation company" prior to the emergence of ChatGPT hype? This one didn't make it into this piece but noted for the next catch up on the AI drug discovery niche. We covered a few small ones this time around just to show that size does matter when you're a drug developer. Great to hear you are properly diversified for what appear to be quite risky investments. As someone once said, "if it's the next Microsoft, all I need is a little - if it's not, glad I only invested a little." Not that we advocate taking a "find the next Microsoft" approach. ;)
You should do a video or article breakdown on the companies that make the equipment which these popping bubble biotech companies need to use. Because that stuff is going to remain relatively stable even as these firms rise and fall. I got to thinking about this because I worked at a Life Sciences lab during my undergraduate, and one professor told me that the university had just bought this 100 million dollar machine whose lenses were then bought by a contract which Canon, which would have made the machine cost maybe 10,000 dollars. I'm actually not sure that story relates to my comment, but when it comes to biotech, as someone not directly involved in research I am just lost, so I usually go with ETFs. (I know this is sort of an old video so hopefully you see this comment)
We see all comments and respond to all of them ;) This brings up the name Thermo Fisher, a stock our Premium subscribers have asked us to cover. It may be an article of video. Stay tuned, and thank you for the suggestion!
Thanks again, always value your analysis and insight. Just wondering what’s your opinion on Certara or similar companies? From what I understand, it accelerates drug trial process via biosimulation. Seems like a tail wind for drug discovery companies if they succeed
Do you have some valuation metrics to back up those numbers? When we give price targets we need to provide our audience with reasoning leading to them. :)
Once again, a very good video! (We are used to with nanalyze team) I agree with the fact the next milestone will be a marketed drug. We shouldn’t wait too long before it happens. Anyway that’s an interesting field with a lot of potential.
Hi Joe. Have you looked at pick and shovels companies in this space, I.e. clinical trial contract research companies? They get paid whether drug candidates bomb or not. Limited upside, but some risk management there. Am looking into $MEDP etc. A thought...
Well, what we're looking for here is to leverage the power of AI to discover perfect drugs that get approved faster and treat more effectively. That value add won't be realized by the contract research companies (they don't care if the compound was discovered by AI or not), unless they start using AI very effectively in their own organizations (not just lip service). We haven't looked at that angle, but it's on our radar now. Good comment Tafadzwa.
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We invest in companies, not stocks. That's still a very small company, well below our threshold of $1 billion, though we'll probably include them in the next update we do on this topic.