After a quick glance, it might be easy to write off Bionano Genomics (NASDAQ:BNGO) as another “meme stock.” After all, in late December the name was a penny stock and a fairly weak one at that. On Christmas Eve, BNGO stock closed at 71 cents per share. By New Year’s Eve, it was up to $3.08, and the cork blew off this stock in January.
Bionano has caught the attention of Robinhood traders. But that’s not why I’m recommending that investors exercise caution before diving into the shares. There are many examples of times when retail investors have gotten it right.
But, in a short amount of time, Bionano has flown really high. On the other hand, even though it might be ahead of the company’s outlook, BNGO stock gives everyone a great deal to root for.
Using Genetics to Fight Cancer, COVID-19, and More
Bionano Genomics works in the field of cytogenetics. According to the National Human Genome Research Institute, cytogenetics “is the branch of genetics that studies the structure of DNA within the cell nucleus.” It involves testing samples of tissue, blood, and bone marrow in laboratories to look for changes in chromosomes, including broken, missing, rearranged, or extra chromosomes.
BNGO stock has largely flown under the radar. But that changed recently because Bionano has a genome-imaging system, Saphyr, that is drawing attention from investors for a couple of specific reasons.
The first major event occurred in December. That’s when the tumor-testing platform of the company’s Saphyr system delivered positive clinical results. Researchers are using the Saphyr system to increase their understanding of the genome structures that make certain tumors so aggressive. By conducting such a study, researchers will be able to develop targeted therapies, better classify cancer subtypes, and make existing cancer treatments more efficient.
Then in January, the company released information from a study that identified key structural variants (SVs) which may provide researchers with a better understanding of why Covid-19 affects patients so differently. The senior author of the study, Ravindra Kolhe, MD, PhD, remarked that the Saphyr system had effectively mapped out large genomic variants that other methods had missed.
Erik Holmlin, PhD, CEO of Bionano Genomics, added: “…The results also demonstrate that even when a disease has already been studied extensively with sequencing, OGM with Saphyr has the potential to reveal significant insights not seen without it.”
BNGO Stock Requires Commitment
The field of genetics is tantalizing for many reasons. I’ve always believed that one reason for that is that even to the “scientifically challenged” (including myself), the promise of genetics makes complete sense. We all have unique DNA. We often don’t recognize when our genetic code works to our benefit. However, we’re all too aware when something goes wrong.
The trading volume and volatility of BNGO stock have quieted down significantly. Bionano is scheduled to deliver its quarterly earnings report in March. It’s likely that investors do not expect new information to move the stock before then.
However, that gives them time to do due diligence. A long position in BNGO stock may be well-rewarded, but it won’t be without its ups and downs. And if you’re looking to trade the name, pay close attention to what analysts expect from the company’s upcoming earnings report.
Investors are betting on the promise of electric vehicles and cannabis and with good reason. But we should all be rooting for Bionano to deliver on its promise. The stock may undergo some volatility in the short-term. However, this is a company we can all get behind.
On the date of publication Chris Markoch did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Chris Markoch is a freelance financial copywriter who has been covering the market for seven years. He has been writing for InvestorPlace since 2019.
