Solazyme, Inc. (NASDAQ:SZYM)

CAPS Rating: 4 out of 5


Player Avatar TempoAllegro (30.25) Submitted: 12/2/2012 2:01:29 PM : Outperform Start Price: $7.46 SZYM Score: -110.71

Solazyme is one of the most interesting - and misunderstood - companies out there today. Many people think of it as a biofuels company. What they do is create different kinds of oils from very small algae in a patented process that happens in the dark. It seems that darkness and spread into the minds of the investor community.

This company IPO'd soon after May 2011 around $18.00 per share and has had a rocky ride down to its current price of about $7.46 per share. The market cap is not even a half billion yet. However, some positives are that it has a current ratio of over 8, and just over 43% of shares are held by insiders.

Most people who do look positively on focus on the strategic partnerships they have, such as with Bunge or Archer-Daniels Midland. And of course Solazyme is using its oils for the cosmetics and food industries increasingly more aggressively.

What has me particularly excited is the fact that Solazyme can create oils that never existed before in nature. These custom made oils may be created after, for example, a food company gives them the specifications, and then then it would be produced in such a way that the oil would be more concentrated than usual oils. Therefore, these oils would be be cheaper, or more valuable to the purchaser, and easier to transport, as theoretically less would be needed to achieve the same result as with other oils.

The fact that they could make something not seen before means they could do something really big and unexpected one day - like come up with a missing piece to the puzzle in the search for cure to a disease or health epidemic. Just think - we now have people who are more and more overweight, helped less and less by antibiotics, and bacteria and viruses are mutating quickly. So perhaps their techniques can be used to make not only oils for food, but for medicine - the difference between the two has often been obscure throughout the ages.

And this is the first major step forward for this company - don't you think after profitability comes, their engineers will come up with other innovations? You need to make your own decision, but for me, I will keep investing more into this company if things continue developing, as I believe they will.

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