I don’t usually post investment ideas publicly, but as someone who thinks statistically (maybe obsessively so), I’ve been wrestling with an interesting case: Fulgent Genetics (FLGT).
It’s trading under $20, despite holding around $25 per share in cash (what? I can’t get over this, plus really high revenue per share plus upside from development pipeline in both dna diagnostics testing and in early phase pharmaceuticals). From my analysis, at a minimum, I keep coming back to $32 per share as fair value right now for revenue not counting upside potential, up to $42 per share based on their latest financial postings.
I’ve spent more time than I’d like to admit analyzing this stock. It’s kind of embarrassing, actually—like, even if I’m binge-watching Netflix, part of my brain is still secretly running valuation scenarios 😂
Seriously, though, I’ve thought extensively about this, especially through a Kurzweilian lens on how AI-driven technology will likely reshape biotech (I’m thinking that starts with testing, where pattern detection is critical, and AI is good at).
I genuinely think it’s very grossly undervalued and that time will tell. Markets are supposed to make sense and this doesn’t make sense! “Mr. Market where are you?”, even though I could certainly be wrong, I have a lot of theories as to why this is undervalued that I don’t wanna mention because I don’t want to bias anyone. I’d love to hear other perspectives on why the market might be overlooking this, if anyone wouldn’t mind giving it a go.
(Full disclosure: I’ve been buying shares periodically over the past year, so take my enthusiasm with a grain of salt)