Genetics Technologies remains true to its name. The company focuses on developing genetic tests that determine the risk of patients developing chronic diseases.
Currently, Genetic Technologies sells two products: GeneType for Breast Cancer and GeneType for Colorectal Cancer.
These personalized products review a patient’s genetics to find markers that put them at risk. Knowing the risk can help individuals and doctors detect chronic diseases early and choose a treatment that’s more likely to get positive results.
GENE is developing five more products scheduled to see release soon. These include tests for:
- Cardiovascular disease
- Type 2 diabetes
- Prostate cancer
The company has a world-class genetic testing laboratory approved by the Clinical Laboratory Improvement Amendments (CLIA).
Is Genetic Technologies Stock a Buy?
Genetic Technologies is an Australian company that works in therapeutic technologies. They often partner with groups like the University of Melbourne, Harvard Nurses’ Health Study, Ohio State University, and the Translational Genomics Research Institute.
Having connections with other researchers around the world helps the company reach its goals. The question remains, though. Is Genetic Technologies stock a buy?
According to analysts the answer is an unequivocal yes. The GENE price target from Wall Street is almost 10x higher than where the stock is currently trading. Clearly there is optimism about future pipeline successes.
The share price movements offer pause however. History has not been a friend to GENE shareholders.
If you look at the share values since 1998, you can see that the company doesn’t hold as much value as investors once believed it would.
In September 2020, you can expect to buy shares of Genetic Technologies for about $4 each. That’s fairly average for the stock over the last year. Shares peaked at $5.67 on July 15, 2020. For at least half of the year, though, the price has been below $3.
The good news is that you can buy a lot of Genetics Technologies shares without spending a lot of money. One thousand shares could cost about $2,000 on the right day. Even if the shares only grow to $5 or $6 each, you will still make a few thousand dollars.
If you only look at the last few years, Genetic Technologies seems like an affordable stock that has the opportunity to break new ground and grow quickly.
Genetic Technologies Share Price Risks
When you look further into the company’s history, though, you get a frightening picture of sudden loss. In early March 2000, the stock skyrocketed to about $1,250. A year before, investors could buy shares for less than $100.
Anyone who held on to their shares for very long, though, lost money. By January 2001, the stock had fallen to $125. Two years later, it fell to $35.40.
Genetic Technologies has never repeated its March high. It has experienced some periods of growth, but they have plateaued and fallen quickly. Shares have been under $10 for more than half of a decade.
The question becomes, “Do you believe that Genetic Technologies will release a product that increases its share value suddenly, or do you think it will continue plodding along at the same pace?”
You already learned about one of the risks of buying Genetic Technologies stock. A flat value will not add much to your portfolio.
Perhaps the bigger concern, though, is whether Genetic Technologies can bring more products to the market soon.
Can Genetic Technologies’ Competitors Win?
Some of Genetic Technologies’ competitors include:
None of these companies have huge revenues. Genfit has the highest revenue at $45.88 million. Even Genfit’s higher revenue doesn’t make it an obvious buy, though. You can purchase shares for less than $5. The company’s stock has also been on a roller coaster. Unfortunately, that rollercoaster doesn’t have many steep climbs.
It is possible that any of these competitors could beat Genetic Technologies, though. Luck plays a role in developing medical treatments and tests. Teams may have great ideas with the potential for success, but those ideas can fail for unforeseen reasons. Similarly, a research team could accidentally discover a therapy that makes its company a lot of money.
You can never discount the importance of talent and training in medical research. But every investor needs to admit that luck plays a role in success, too.
A successful trial can affect a company’s stock value dramatically. Companies don’t have to bring products to the market to get attention from eager investors looking to the future.
Is Genetic Technologies Stock a Buy? The Bottom Line
Is Genetic Technologies stock a buy? That depends on what you want for your portfolio. Buy Genetic Technologies if you want to:
- Purchase a large number of shares without spending too much money.
- Add a stock with potentially large upside to your portfolio.
- Believe that company will discover breakthroughs in genetic testing that lead to better health outcomes.
Genetic Technologies, however, probably doesn’t look like a buy if you want:
- A high-value stock that provides regular dividends.
- A company that has shown decades of growth.
- A stable share price
- A medical research company that has released more products within recent years.
- Companies with higher revenues that could translate into higher share prices.
You know the risk of buying stock. You can make informed decisions that lead to financial success. Some buys that look excellent, however, fall apart shortly after you purchase shares.
Take your time, explore your options, and determine whether Genetics Technologies stock is a buy that fits your investment portfolio.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.