Cathie Wood is a name that most people who have been following the stock market for the past year are familiar with. The founder of asset management business ARK Invest has made a name for herself as one of the most well-known money managers today, thanks to her strategy of investing in cutting-edge technology startups and frequent media appearances. All of ARK’s funds have more than doubled their clients’ money in the last year, so she’s deserving of the spotlight. Despite her general success, her funds do include a few equities that are no longer popular on Wall Street. Proto Labs (NYSE:PRLB) and CRISPR Therapeutics (NASDAQ:CRSP) are both down considerably from their recent highs. Those slumps could imply opportunity for investors hoping to profit from the gene-editing or additive manufacturing revolutions. Those who invest in either stock can rest easy knowing that one of the world’s hottest investors has done so as well.
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CRISPR Therapeutics (CRISPR) is a type of gene editing technology that
CRISPR Therapeutics develops transformational medicines using the CRISPR-Cas9 gene-editing method. Despite the fact that the company’s clinical studies are progressing, the stock has dropped roughly 40% from its peak in mid-January. In three clinical areas, CRISPR is creating therapies. Progress on these activities is expected to boost the company’s market valuation from around $10 billion today to $20 billion to $25 billion in the near future, according to management.
Hemoglobinopathies, or inherited illnesses affecting red blood cells, is the first program. CRISPR Therapeutics and partner Vertex Pharmaceuticals (NASDAQ:VRTX) reported in December that their CTX001 medication has effectively treated 10 patients of two blood illnesses in the first clinical trials of CRISPR gene-editing by a U.S. business. The experiment is still in its early stages, and management intends to complete enrollment later this year.
Immuno-oncology treatments, which use the body’s own immune system to attack cancer, are the second category of programs. Gene-edited cells transplanted from a healthy donor are used in all three of the company’s therapeutic prospects in this area. This year, each is planned for a readout. One treatment has already demonstrated that a created cell from a patient’s immune system can produce a very high response rate for one of the most dangerous types of non-lymphoma. Hodgkin’s
Finally, in its first foray into regenerative medicine, the company is collaborating with ViaCyte. ViaCyte’s stem cell skills are being combined with CRISPR’s gene-editing expertise in a phase 1/2 experiment. A new technique to treat diabetes is expected to emerge as a result of the research. The method is based on a two-decade-old study that employed fresh pancreatic cells from cadavers. If this treatment is successful, the stock should soon rise to reflect CRISPR’s potential to disrupt the $28 billion market for human insulin. Overall, the technological breakthroughs made by this company should pique investors’ interest in the future.
Proto Labs is number two.
Any new product has always taken a long time and a lot of money to develop. Whether a company is producing one item or thousands, the equipment, molds, and machines required to create a new design remain the same. As a result, manufacturing advancements have always tended to concentrate on more effectively mass-producing parts rather than swiftly adapting to new designs.
Proto Labs has turned the paradigm on its head, focusing its entire business on producing custom parts at breakneck speeds. Last year, the site helped over 18,000 individual product creators.
The adoption of 3D printing has aided the method, which involves piling up material to construct a design rather than starting with a large amount of material and deleting most of it. It is both a less expensive and a faster process. During the pandemic, for example, the company was able to produce new components for ventilators and diagnostic equipment with market-leading turnaround times.
While Proto Labs is well-positioned, it has struggled to develop. Management recently released full-year statistics for 2020, and sales of $434 million was down 6% from the previous year. COVID-19 was not the sole cause of the drop. In 2019, revenue was only 3% higher than in 2018. The market is growing impatient, but the company’s new CEO, Rob Bodor, is optimistic that a more user-friendly interface and a wider range of client products can kick-start sales.
Proto Labs 2.0, the redesigned user platform, went live in November for Europe and February for the Americas. New features and capabilities will continue to appear into 2021, according to Bodor, who took over this month. Proto Labs has just acquired 3D Hubs, which will allow the company to locate manufacturing partners for work it cannot accept, as well as providing customers with more lead times and price ranges.
Following the acquisition, a positive analyst note, and bullish projections from 3D printer startup ExOne, Proto Labs stock soared (NASDAQ:XONE). Unfortunately for investors, it has dropped roughly 50% from its high point in late January. Management offered little assistance, predicting that conditions in the first quarter will be similar to those in 2020 and 2019.
It’s fair that investors are impatient; this stock has been based primarily on potential for years. Investing in Proto Labs, on the other hand, could pay off in the long run for long-term investors. That is, at least, what Cathie Wood is hoping for.
This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
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