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All tech stocks we hold are for the ultra long term. This firm needs to focus on surviving, and that's hardly a given. Your comment doesn't address any of the concerns we've raised. ;)
Are there any updates regarding $NVTA?? I also have a question, since you still believe in the company and its thesis, why don't you invest more to get your average down, so that you can still get a margin of profit?
Very good questions here. First, we check in with stocks about once a year and find that cadence to be sufficient (updates may happen sooner because of M&A events or large price movements). We always limit the total amount of capital allocated for any given position. Once that's exhausted, we're done. While it can be very tempting to add sometimes (think UiPath), we only ever invest what's been allocated and stop. Good question.
It was until it woke up with a hangover ;) This sort of price action - likely a short squeeze - creates a lot of unnecessary noise for long-term investors.
They aren’t run well. I’ve been waiting 5 days to have my appointment booked to test my baby for abnormalities. I’m so upset. Now I’m not sure I’ll even hear from them at all? It’s so important. Ugh. Their customer service is not good.
Need to be careful on anecdotal evidence. We spoke with a doctor who uses their tests and he said the process works quite well. Of course that was anecdotal too ;) Some products works so well that companies don't have to have great customer service and they know it. In industry parlance, NPS is a measure of customer satisfaction that one should watch.
I don't understand how they can burn 600M with 400M revenue. That means they are spending 1B. Even with 3000 employees making 100k avg each, that's only 300M. Where is the money going? Do they even make their own tests or do they buy them from illumina/myriad for 200 and turn around and sell them to consumers for $100 to show growth/collect data?
That's a really great question Christopher. In 2021 they had revenues of $460 million with COGS at $349 million. So COGS would have to include costs of tests they're buying from someone else if that's the case. Then they have SG&A expenses of $474 million and R&D expenses of $416 million. Just how big is the sales team and what can they possibly be researching? All those rapid fire acquisitions need to start realizing some synergies ASAP.
I gotta say, this company really irks me. The CEO fluctuates and changes goals of the company, sounds like a nervous wreck, invitae's executive structure is crazy or like nothing I've seen, so many executives in rather questionable roles. He takes massive risks and is very unprofitable right now, i think this one's a goner.
It all depends on how much you invest as a total percentage of the capital you have to deploy. For example, we set limits on the maximum amount of money to invest in any given stock. (More info here: www.nanalyze.com/2022/01/manage-tech-stock-portfolio/) If we weren't maxed we might add some more because we're so far under our cost basis it doesn't cost much to double exposure. That said, we'd need to dig into their recently announced restructuring plan and see how sound it looks first.
You'll need to explain that a bit more chief. We've noticed a fair number of people coming around to bash. Let's just stick to debating the numbers, not what you think might happen. An opinion and $5 won't get a Starbucks coffee these days.
Hey Doug, For any position we enter into, there's a "maximum capital" limit we set which is based on total portfolio value. Our NVTA position is at that limit so we won't be adding at any price. Kind of sucks when it's that below our cost basis but rules are rules. We're also concerned about the company's ability to survive per the video so adding too much is just too risky. Could be trying to catch a falling knife here but let's hope not.
Excellent Analysis 🧐 I learned a lot . I’m also underwater , but I added 3,000 more shares in the low 3 s . Probably too much , but Invitae still makes up only 2 % of my total portfolio. Hopefully they do not have to dilute shareholders , but if they do at the end of 2023 , I hope the share price will be at least 15 dollars so less shares will have to be issued ?
Thank you very much for that feedback! Good job that you're thinking about your position in terms of overall assets under management (AUM). Agree with you that waiting to raise capital could result in a better outcome but be wary of assigning arbitrary price targets. ARK holds a good chunk of their shares and Ms. Wood has many friends so hopefully they don't do anything rash.
Joe, great video! I have a small position in this stock by following ARK couple years ago. Which of the two stocks you might invest in Simulations Plus or Veeva?
Jumping in and out of a stock that's dropping is a good way to lock in losses. Unless your thesis changes, you shouldn't sell a stock because of price action.
@@Nanalyze my point is I have a checklist they either have to be good value or good growth they check the value for growth I have my own metrics Then I want good management team well when it was 40 dollars a share and they was selling shares they would have been better diluting more or as price came down slightly diluting more than take on debt until revenue is meaningful now as a result my next metric cash burn looks unstable so that 1 decision raised red flags for 2 major metrics for me
Management and cash burn 🔥 so it's gone from a value stock to a stock with bad Management and cash burn and I don't like holding them of course those married to it will say they raised at 40 dollars well if they were sensible they would have done more offerings and then could have bought back 20x shares for every share sold
@@dougtrvl888 Quality pivot into another interesting topic. The only cannabis stock we're dabbling in right now is Trulieve. We've written about Cresco and Curaleaf (articles below) and published videos on them as well. www.nanalyze.com/2022/01/cresco-labs-stock/ www.nanalyze.com/2022/01/gti-stock-vs-curaleaf-stock/
@@dougtrvl888 neither IMO. Trulieve and verano are the best of the big guys I think. Vext, C21, yourway are some decent smaller companies. All except trulieve have P/E under 11 rn and considerable growth.
Thank you for the comment. We're not overly keen on investing in the thesis because it contains so much regulatory risk. We do enjoy following the thesis though, as there's a lot of interest from readers. Not sure what our next cannabis video will be about but we're due for one soon.
We don't sell stocks when they hit rock bottom to lock in our losses and bet on other horses, we stick with our original thesis which hasn't changed. Plenty of our positions are underwater and we only sell when our thesis changes.
@@joepiv thanks for answering, Out of curiosity as I am in the same position, so I want to compare perspectives. Are you saying your thesis has not changed even if the whole macro environment is completely different to what it was? Do you believe is likely for NVITA to do 600%? There are other companies that has much better prospect than this like Palantir, and they have been hit hard, it seems to me that it might be a better chance of recovery to concentrate in that while maintaining your position in tech/growth. What do you think?
@@toke182 You're welcome. We have a much broader portfolio of assets than just tech stocks of which we hold 35 right now. The capital we've committed to Invitae is 0.66% of our assets under management (AUM). That context is important in understanding how much skin we have in the game here. Our thesis is that genetic testing will be a key driver of personalized medicine. Invitae is a leader - if not the leader - in genetic testing. That's it. That's the bull thesis. When the markets started experiencing turmoil, we turned our focus towards survivability. Can all the tech stocks we're holding survive? Invitae had one of the lowest margins in our tech portfolio. That's what prompted this video. Provided they can survive, then they can thrive because genetic testing is the future of personalized healthcare. It's better to think of things in terms of potential rather than setting an arbitrary price target or percentage gain. Hope that helps man! It's always good to share perspectives.
Thank You, I have two points: 1) Your losses are real losses, you are fooling yourself by calling them paper losses. 2) The same thing happened to Lab Corp about 20 years ago, they turned it around, I "think" if one held it, their return was pretty good. It just takes time. If you could hold, and if the management team is sharp. I think this could payoff.
We can have a philosophical debate whether paper losses are losses but they are only realized when locked in. Whenever the tax man comes sniffing around, that's usually when a loss or gain happens. Let's hope they can turn this into a great company with some time.
