Use access key #2 to skip to page content.

kirkydu (93.89)

Finding Cancer Early an Exact Science

Recs

19

January 05, 2010 – Comments (13) | RELATED TICKERS: EXAS , GE , PFE

In the never quest for ten baggers, bio-tech is a favorite hunting ground.  While companies that purport to be looking for a cure for cancer run red hot from time to time, maybe something a bit more mundane, such as a company that can find cancer early might be a better play.  Hear Ye, Hear Ye, I believe I have a ten bagger on the hook.   

Exact Sciences (EXAS): Is near the end of developing a product that might replace FIT and FOBT as the number one screening tool for colorectal and proximate digestive tract cancers.  In fact, an early version of the stool based DNA test has already been on the market as a home brew.

Over the past few years, this company has essentially round tripped from $3ish to dimes back to $3ish.  Its prior management failed miserably to properly guide the technology to market. Recent clarity on path to FDA approval, deal with Genzyme to stablize the company financially, new and experienced management team including Kevin Conroy from Third Platform, move to Wisconsin near UW and rights deal to research with Hopkins, make this a very interesting long term microcap growth opportunity. While many focus on price per share jumps being imminent (and they might be) as well as the recent round trip run up, the real story here is that the colorectal testing market is huge and that the first to market with a truly effective and non-invasive screening test will garner huge first mover advantage. EXAS is currently in the lead to be that company. I have gradually accumulated shares buying on any no-news price drops.

As with any microcap, the company comes with all the execution and financial risks.  However, it appears to me, that Exact stands a strong chance of following in the footsteps of another company this one's founder began years ago for Pap Smears.  If that is so, a ten bagger might be conservative.

13 Comments – Post Your Own

#1) On January 05, 2010 at 3:07 PM, lemoneater (79.38) wrote:

Less invasive is good.

Report this comment
#2) On January 05, 2010 at 3:53 PM, Tastylunch (29.54) wrote:

Kirk

you ever check out portefeuille's stratgey?

He basically longs a huge basket of biotechs and the wins he gets from that are so large they offset by a good margin the huge losers you can get.

http://caps.fool.com/player/portefeuille/sectors.aspx?astable=biotechnology#biotechnology

(this is just a partial list he has about 12 CAPS players and it doesn't include his biggest wins to my knowledge)

I think it works becasue the market lacks the capacity to accurately price these due to the opacity of tech and FDA approval process

Report this comment
#3) On January 05, 2010 at 3:56 PM, Tastylunch (29.54) wrote:

Btw aother biotech that has my interest is CRME. Never seen a biotech where mgt loaded up on shares prior to FDA approval...

Report this comment
#4) On January 05, 2010 at 5:42 PM, kirkydu (93.89) wrote:

hello again Tasty

I have looked at his portfolios, I like the strategy.  Most investors would have a hard time with it, but for the very informed who have a risk tolerant sleeve, I like it a lot.  I'll take a look at that stock.  I very much like small companies where there is a lot of insider ownership and buying.

Report this comment
#5) On January 05, 2010 at 11:36 PM, portefeuille (99.56) wrote:

#2 It looks better when you click "all" (see here). I like EXAS and I think that biotech as a sector is "undervalued" and that "small cap biotech" companies as a group are "very undervalued".

-----------------

#52) On March 04, 2009 at 10:52 AM, portefeuille (99.97) wrote: EXAS - 0.86 - outperform

----------------- 

(from here)

Report this comment
#6) On January 05, 2010 at 11:37 PM, Tastylunch (29.54) wrote:

Good deal. To faciliate to your research 

Here's portefeuille's rationale for CRME

http://caps.fool.com/Pitch/CRME/4124085/cardiome-announces-upcoming-pr.aspx

like any development stage biotech it's pretty much an all or nothing kinda deal

the major concern to me is they seem to be in between climcal trial stages an awfully awfully long time.

Report this comment
#7) On January 05, 2010 at 11:38 PM, Tastylunch (29.54) wrote:

portefeuille

my bad I copied and pasted the wrong one.

Report this comment
#8) On January 06, 2010 at 12:04 AM, Tastylunch (29.54) wrote:

forgot to also disclose I have a very small long position in CRME, so I'm hardly unbiased.

Report this comment
#9) On January 06, 2010 at 11:14 AM, kirkydu (93.89) wrote:

my oooopsie in article above.  Kevin Conroy was at Third Wave (not Third Platform) which was sold to Hologic.  Incidentally, Hologic has some tech being incorporated by Exact as well is my understanding.

http://www.itnonline.net/node/29129//

Port, I agree on small cap biotech being undervalud. 

Report this comment
#10) On January 06, 2010 at 11:54 AM, kirkydu (93.89) wrote:

bought a few shares of CRME after duing some reading.  Will monitor and potentially buy more on dips and if the business continues to develop.

Report this comment
#11) On January 06, 2010 at 1:44 PM, anchak (99.86) wrote:

Oh Incidentally, if you are geekily interested Hans's ( Porte) record in Biotech is a Statistical Outlier - ie the man somehow is beating the crap out of a randomness - ie the holy grail of Alpha - he deserves a mention.

Tasty of course verbalized this - but since I ran the test - so wanted to point it out.

Report this comment
#12) On January 06, 2010 at 2:36 PM, Tastylunch (29.54) wrote:

anchak

did you run that onif someone picked every no product biotech whether the whole sector outperforms?

My suspicion is it might due to the opacity of the business models (or Wall Street's ignornace of the tech). Biotechs are very hard to value. I have a feeling the street discounts them all too much as a group.

One thing I really appreicate about Porte is he looks for unconventional mispricings. I think that's why his strategy does well,modern public screeners haven't adjusted to sector by sector valuation yet. It's one of the tactics qaunts have used for a while now and the street still hasn't caught up.

Report this comment
#13) On January 06, 2010 at 2:51 PM, portefeuille (99.56) wrote:

#11,12 aeehhhmmm, maybe, hehe, not sure about the part of luck and "small cap outperformance" yet ... I do try to find "mispricings", sometimes they are rather conventional as in the case of EMC/VMW.

Report this comment

Featured Broker Partners


Advertisement