In a recent Banyan Hill Publishing presentation with Corrina Sullivan, investment guru Charles Mizrahi said he believes we’re at the “ground floor” of a forty-to-fifty-year “mega trend” that historians will eventually call “The Genomics Age.”
Despite genomics-related stocks taking a (rather significant) beating lately, Mizrahi said we are in “the early innings” of genomics, and he’s particularly bullish on one company.
He reveals his pick in a report called “The $40 Trillion Genomics Industry,” which you can access by subscribing to his Alpha Investor service for $47. However, I looked into the hints he dropped and, after following the trail, found the stock he’s teasing.
Let’s kick things off by looking into Mizrahi’s overall genomics thesis. Then, I’ll show you what company I think he’s teasing and how I figured it out.
Charles Mizrahi’s Genomics Teaser Unpacked
The presentation we’ll be discussing here is a “special episode of Tech Talk” on the Banyan Hill website, where host Corrina Sullivan and Charles Mizrahi discuss genomics.
The presentation began with Corrina Sullivan walking around asking “random” people to look at a device she was holding, which looked like a small USB stick or something.
However, according to Sullivan, the device is a handheld DNA sequencer, and the tech inside “could create $4 trillion in new market value every year” in this decade.
From there, she introduced Charles Mizrahi after saying he’d reveal his “No. 1 emerging tech stock for 2022.” And Mizrahi began talking about DNA sequencing.
In particular, he focused on how decreasing costs will lead to increased profits.
“… In every instance where technology finally starts making money…
And you see stock prices soaring … 10, 20, a 100 times over…
It always comes down to one factor.”
“… The cost of production falls … dramatically.
In other words, the cost to make the widget, or whatever it is, drops so steeply, the mass market can finally afford it.
It’s just common sense.
When prices fall, demand increases. And when demand increases, so do profits. It’s that simple!”
And this is the essence of his genomics prediction, that reductions in the cost to sequence DNA have fallen significantly over the past 20 years, which could lead to massive growth.
“That’s right. In under 20 years … the technology for DNA sequencing has dropped from $2.7 billion to less than $1,000.”
“We’re starting to see companies offer DNA sequencing for as little as $399. And that’s not those ‘take home tests’ either.”
Cool, but what’s the big deal?
The science behind genomics and DNA sequencing is way beyond my pay grade. But I have spent time researching the space as part of reviewing different stock teasers.
There are many potential benefits to genomics and similar fields of study (like synthetic biology). But this presentation focused mostly on the impact it could have on the healthcare sector in terms of curing genetic diseases and helping people live healthier lives.
That said, Charles Mizrahi also mentioned the impact genomics could have on agriculture, manufacturing, consumer goods, and energy. And he shared some specific examples.
“That’s right. Genomics, or gene-editing, has a lot of applications. We didn’t even scratch the surface…
Several companies are using genomics to create pest-resilient crops … producing healthier, stronger food, revolutionizing agriculture…
They’re taking spider DNA to make fabric that’s super strong and light-weight … re-engineering plants to produce energy.
They’re even creating genetically edited bacteria that eats plastic, which could potentially clean up our oceans!”
What Mizrahi talked about is echoed by numerous other well-known investment gurus I’ve written about, like Jeff Brown, Whitney Tilson, Joel Litman, and Adam O’Dell (among others).
They each have a unique perspective on the space, but the general consensus is that genomics and synthetic biology will be massively disruptive. And not just in the healthcare space either. The potential benefits of genomics appear to be far-reaching.
In any case, DNA sequencing is a big part of this space, which appears to be why Mizrahi believes that cost reductions for DNA sequencers could mean we’re still “early.”
Another reason Charles Mizrahi believes we’re in the “early innings” of genomics is related to how artificial intelligence could lead to improvements in sequencing technology.
“There’s something else incredible happening in DNA sequencing right now … and it’s going to make it grow even faster.
DNA sequencing takes a lot of computing power.
There’s 6 billion letters in the human DNA. That’s a lot of data to process.
But thanks to recent advances in computer artificial intelligence … we can solve problems faster than entire teams of doctors, scientists and Ph.Ds. ever could.
And because of this… DNA sequencing is going to get even faster AND cheaper.”
So, to sum it up… Charles Mizrahi is bullish on genomics because of its potential impact on society, and he believes that reductions in the cost of DNA sequencing and advancements in artificial intelligence could lead to incredible growth in the years ahead.
How bullish is he?
I can’t speak for Charles Mizrahi, but he made it clear in the presentation that he believes it’s “only the beginning for genomics” and that this space has a lot of room to grow.
He also talked about a company he’s tracking in the genomics and DNA sequencing space that the presentation suggests is his “No. 1 emerging tech stock for 2022.”
So, let’s discuss that now…
What Genomics Stock Is Mizrahi Teasing?
The first main clue Charles Mizrahi shared about his genomics pick was that the company has made a “technological breakthrough” related to long-read sequencing.
I’m not even going to attempt to explain what that is (lol). But according to the article I just linked to, long-read sequencing is also called “third-generation sequencing,” and from what I can gather, it’s essentially a more advanced method of sequencing DNA.
Here’s what Charles Mizrahi said about it:
“Well, here’s the deal. The company I’m looking at … and recommend our viewers to invest in … it’s just made a technological breakthrough.”
“It’s like this: This company has the entire set of encyclopedia from A to Z while everyone else is using cliff notes.
A long-read DNA sequence is simply a more complete information. More information means you get more diagnoses. You detect more disease. You save more lives.”
What other clues did he share?
Charles Mizrahi shared several other specific clues about his pick.
First, he said that the company has a “life science division” and that it did “close to $15 billion in revenue last year” (2021).
“It does much more than that. It’s a company that has a life science division, which focuses on all things genomics, is already a powerhouse!
It did close to $15 billion in revenue last year. I expect to see amazing developments and innovations in their near future.”
He also said the company has come up with a way to reduce the cost of “library prep,” which he describes as the “first step in sequencing genes.” According to Mizrahi, the company found a way to reduce the cost 100-fold, from around $73 to $0.73.
“Sure … library prep … that’s the first step in sequencing genes.
So while the cost of gene sequencing has been going down, the cost of library prep hasn’t … until now.
What this company did … is it came up with a solution to reduce the library costs from around $73 to … $0.73! A 100-fold reduction. Talk about Wright’s Law!”
What could it be?
Well, the first thing I did was look for genomics-related companies that have reduced the cost of “library prep” from around $73 to $0.73 because that’s a pretty specific clue.
In short, that led me to an article on the Beckman Coulter website about next-generation sequencing (NGS) library preparation, which showed that using the “Echo Liquid Handler” resulted in a roughly 100-fold decrease in the cost of library prep. And the decrease it noted was from $72.91 to $0.73, which lines up with what Mizrahi said.
But it’s not possible to buy shares in this company.
So I continued my search, starting with a company called Illumina because the article I just linked to mentioned it. And that led me to an article about a deal between Beckman Coulter Life Sciences and Illumina regarding library prep and next-generation sequencing.
Long story short, all of this led me to conclude that Illumina might’ve been Mizrahi’s pick. But there was ONE niggling clue that just didn’t fit – the company’s 2021 revenue.
As mentioned, Charles Mizrahi said that his pick “did close to $15 billion in revenue last year,” and that is way above what Illumina did in 2021.
So, I was stumped for a bit. But I kept on digging, looking through many different genomics company earnings to see what I could find, and nothing came up.
But then I looked closer at Mizrahi’s revenue clue, and that’s when it hit me…
He didn’t say that the company had done $15 billion in revenue; he said that a DIVISION of the company had done so. Specifically, the company’s “life science division.”
So from there, I looked into whether or not Beckman Coulter had a parent company because one thing I was sure about was that this company fit the “library prep” clue.
And sure enough, it does.
Beckman Coulter is owned by Danaher Corporation.
And as for the final piece of the puzzle… Danaher Corporation’s 2021 Annual Report shows that its life sciences division made $15 billion last year.
So, Danaher Corporation (ticker: DHR) appears to be Charles Mizrahi’s pick. Or, more specifically, his “No. 1 emerging tech stock for 2022.”
What does the company do?
Danaher Corporation is a U.S. conglomerate that describes itself as a “global science and technology innovator.” And according to Wikipedia, it “designs, manufactures, and markets professional, medical, industrial, and commercial products and services.”
I won’t speculate on whether or not it’s a good investment, but through my research, I found an informative analysis of Danaher on Seeking Alpha that you might find helpful.
You could also check out Charles Mizrahi’s report, titled “The $40 Trillion Genomics Industry,” which details his pick (which I think is Danaher) and his research on it.
But as mentioned, the only way to access that report is to join Alpha Investor. So if you’re wondering what that service is about, read on.
Recommended: Go here to see my #1 rated stock advisory of 2022
Should You Join Alpha Investor?
Alpha Investor is Charles Mizrahi’s flagship investing newsletter, where each month, he shares his latest research and stock pick with subscribers.
The service normally costs $199 to join, but if you join through the presentation, it costs either $47 for one year or $199 for a lifetime subscription.
The main thing you get for that is access to the money newsletters, which contain Charles Mizrahi’s latest stock pick. According to Mizrahi, each recommendation is “the result of 60 to 80 hours of research,” and he and his team go through “15 criteria” for each pick.
Aside from that, subscribers get video updates on the stocks he recommends, access to the model portfolio so you can see what he’s actively recommending, and research reports, one of which is the genomics report I mentioned earlier that details his pick.
Whether or not it’s worth joining Alpha Investor is ultimately only something you can decide. But the Banyan Hill Publishing website states that the service has over 78,000 readers in 126 countries, so it’s quite a popular service.
It also comes with a solid-looking refund policy, so there’s not a lot to lose by giving it a try. Although there’s no guarantee you’ll make money following Mizrahi’s recommendations. And there are risks involved in following his stock ideas, as with any service.
Is Charles Mizrahi the Real Deal?
Charles Mizrahi has around 40 years of experience in finance.
And according to his Banyan Hill profile, throughout his career, Mizrahi has managed money for some of the most well-known investment banks in the world.
These days, however, he’s probably better known as a stock picker. Aside from Alpha Investor, he runs two higher-tier services (Microcap Fortunes and Catalyst Fortunes) and a free email newsletter called Real Talk.
What stocks has he recommended?
Charles Mizrahi has recommended many stocks across his services over the years, but if you want to get a better idea of what types of companies he tracks, I’ve written about several of his stock teaser presentations on this blog.
For instance, I’ve written about his “forever battery,” 3D printing, and autonomous vehicle picks on this site. And most recently, I wrote about his “healthcare spinoff” teaser.
You can see all of the posts I’ve published on Charles Mizrahi here. This page is always being updated, too. So it will show you any new stock teasers I cover as they are published.
Whether or not genomics turns out to be a multi-trillion dollar industry remains to be seen, but the more I dig into this space, the more convinced I become this overall trend is massive and, as Mizrahi suggested in the presentation, just getting started.
However, that doesn’t mean you’ll make lots of money speculating on different companies in the genomics or DNA sequencing space.
There’s a lot to consider when choosing stocks, and tech and biotech are rapidly evolving sectors. Meaning things can change fast. Most of us aren’t scientists or professional stock pickers with time to follow everything that’s going on, either.
So it’s easy to see why services like Alpha Investor can be appealing because why not let someone else do the research for you? Maybe. But nobody has a crystal ball, so there are always risks involved when speculating in the market.
And that’s why I think it pays to do as much research as possible.
In any case, I hope what I’ve shared has been helpful. And as always, I’d love to hear your take, so comment below if there’s anything you’d like to share. Thanks for reading.