Affymetrix, Inc. (AFFX)
Engaged in the development, manufacture, sale and service of consumables and systems for genetic analysis in the life sciences and clinical healthcare markets and create tools that advances the understanding of the molecular basis of life.
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nih grant
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Mmm...genetic analysis...
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I'm counting on AFFX to innovate in the field of Genetic mapping, and bring their prices down to the same level or at least a more fitting level for their products. Plus, with the other Genetic Mapping companies in the game, I think they will all benefit in the next five years or so.
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semiconductor sector starting to turn up.
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can't get any lower
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If I told you...
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An out-of-favor provider of research tools and systems for genetic analysis that is poised to regain investor favor due to the need for innovation in biotech and pharma industry.
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the stock has been beaten up and the chart is positive
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Rule Breaker, Insiders, Sector bet
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potential to do well in future
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Cheap here...bounce over 20 likely in the next 12 months.
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Insider Trading
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their genotyping platform will be adapted more widely for personalized medicine tests to determine likely efficacy of drugs, and before that, used to establish those markers in R&D
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April 30, 2008 5:30 PM EDT
Affymetrix Inc. (Nasdaq: AFFX) Chairman/Founder, Stephen P.A. Fodor, disclosed a purchase of 10,000 shares on 4/29 at $11.39, bringing his stake to 157,897 shares.
Shares of AFFX sunk 33% on 4/15 after the company lowered guidance.
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Come on now. I understand that their earnings have been disappointing, but the bottom line is that this company is one of a few at the absolute cutting edge of modern-day genetics research. ILMN, perhaps its greatest competition, is seeing its stock price skyrocket, while AFFX continues to drop lower and lower.
This is one guy who thinks that this is about as low as she blows.
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In spite of revenue growth and recent profit rise, analysts have downgraded it. Why?
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35% haircut seems a bit harsh based on reduced revenue guidance in the neighborhood of 3%. But clearly there's some concern about reduced research and development spending as the slowdown spreads throughout the economy, and Affymetrix will see pressures on revenues (and therefore profits) in the near term because of that. But we're talking about one of the most innovative and important companies in the worlds of scientific experimentation, life sciences and clinical healthcare. Sure, there may be a slowdown, but you really think the worlds of human genetics, drug development and biomedical engineering are going to do anything but grow exponentially over the coming years/decades? Big-time outperform for the future, especially from current levels.
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There's no question that there will be growth of genomic testing for various applications as it becomes smarter and faster. As soon as the big drug companies start developing gene-based therapies these companies (AFFX, ILMN, SQNM) will be well positioned to capatalize on that growth. The chart on AFFX is awful, and the valuation isn't much better (but historically isn't as bad as it could be). Regardless - the potential growth outweighs the downside risk here - and I think ILMN has priced in PERFECT earnings, SQNM just isn't making money.. so I'm going to roll the dice on the long side of AFFX..
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Well run company in a growing field makes this a winner.
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I am a professor at a research institute and do work in the biomedical field. I wouldn't touch Affy stock with a ten foot pole for three major reasons:
1) Their product is inferior to the Illumina chip. They got a very bad reputation when they released their 500K chip last year because over 1 out of 4 (!!) of the SNPs in there were garbage. Most researchers I know who were burned by that experience are going Illumina from here on out. Illumina has a much better reputation.
2) Much of their revenue comes indirectly from the government, via research grant funding in academia. Research funding under the Bush presidency has gotten bad, and given the debt this administration has accumulated, I can't see how this can change quickly, even with a Democrat in office. Granted, Affy makes money from private industry too, but one chunk of the income they could potentially tap into is dwindling.
3) Affy's main business is in making SNP chips (single nucleotide polymorhpism chps). However, SNPs are already becoming passe. Overall, the promise of SNP chips (and association studies) were way overblown. The reality is turning out to be much much more humble than we were promised ten years ago. The new thing (and this one probably will work) is in sequencing every single base pair in the genome. I won't get technical, but this really is the end game in genetics. How is Affy positioned for this new technology?

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