The head of Ark Invest, Cathie Wood, has recently increased her stake in 10x Genomics, among other small-cap names, reports the Motley Fool, which said the company has been “going in the wrong direction.” 10x Genomics, with a market capitalization of $1.78 billion, designs and manufactures gene sequencing technology.
Details
10x Genomics shares were among Cathie Wood’s latest purchases for Ark Invest’s family of ETFs, writes the Motley Fool. According to Ark’s daily trade updates, cited by Investing.com, on Tuesday, December 24, two of her funds acquired over 53,300 shares of 10x Genomics for $786,100. Investing.com adds that the funds also purchased 10x Genomics shares last week but does not disclose their total size.
10x Genomics manufactures gene sequencing technology for scientists, doctors, and pharmaceutical companies. Its products can characterize up to 5,000 genes in cells and tissues and sequence individual cells. The company claims to be behind breakthroughs in oncology, immunology, neuroscience, and other fields.
In the third quarter of 2024, the company reported a 1% year-over-year decline in revenue to $151.7 million. However, the net loss shrank 61.5% to $35.8 million, according to 10x Genomics.
“Our results this quarter fell short of our expectations given greater-than-anticipated disruption from the sales restructuring we implemented in the quarter and cautious customer spending. As these dynamics persist, especially under a difficult macro backdrop, our revenue growth this year will be lower than our previous expectations,” company CEO and cofounder Serge Saxonov was quoted as saying in the press release.
The company’s revised outlook for the full-year 2024 sees a revenue decline of around 3% to $595-605 million versus the previous guidance for 8-12% growth.
Stock performance
“10x Genomics is one of the market’s biggest disappointments of 2024,” says the Motley Fool, noting, however, that its technology has long-term potential.
In 2024, 10x Genomics stock has dropped almost 73%. Wood sees this as an opportune time to build up her stake, the Motley Fool points out.
According to MarketWatch, 20 Wall Street analysts cover 10x Genomics. Half of them rate it a “hold,” nine a “buy,” and only one a “sell.” Their average target price of $20.20 per share implies upside of nearly 38%.
In October, Morgan Stanley included 10x Genomics in its list of 10 small-cap stocks with at least 50% upside, as reported by Business Insider.
Other Cathie Wood purchases
Cathie Wood gained global recognition in 2020 when her Ark Innovation ETF soared over 150% in a year and became the most profitable ETF on the market. Ark assets reached their peak valuation in 2021, fueled by investments in tech companies like Tesla, notes Bloomberg. Wood remains highly popular among private investors, many of whom try to emulate her strategy. She continues to invest in unprofitable companies, betting on their future success.
In addition to 10x Genomics, Wood purchased shares of online retailer Amazon (up nearly 20% for the year to date) and cloud technology provider GitLab (up less than 1%) for her funds on December 24, the Motley Fool notes. Ark Invest’s funds have five key focus areas: robotics, automation, big data, AI, and genomics.
