CRISPR - CRSP - GENE EDITING Stock Analysis - Risk Level 9

By: Nadeem_Walayat

Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge

Why has my focus shifted to biotech stocks and not more tech stocks?

Firstly, I have been investing in biotech stocks for DECADES, it's just that since 2015 my focus shifted to the emerging AI mega-trend to make sure I was invested to capitalise on a trend that was clear to me would span DECADES, at the time I thought I was probably getting in late on the AI Mega-trend but clearly that is always the case! WE ALWAYS THINK we're late to the party but this trend is going to run right into the end of the 2030's

This also explains why I hold the likes of GSK and JNJ amongst a string of smaller cap biotech stocks many of which have been disappearing from my portfolio over the years usually due to being taken over as it looks likely to be the case for GW Pharma later this year. So I need to replenish this once much loved and now neglected stock sector with a string of new smaller cap high risk stocks for the next 5 to 10 years.

Secondly, our beloved AI stocks have been BID UP to high valuations, yes including Google, so they are not CHEAP, even after a 10% to 15% correction i.e. the likes of Microsoft and Amazon are discounting a lot of future earnings growth! Of course that does not necessarily mean that they are about to fall to what I would consider to be fair value let lone cheap levels as they did during March 2020 because at the end of the day they are GOOD stocks so usually command a healthy premium to invest in.

However, during the course of this exercise I am repeatedly finding that the biotech stocks are tending to be greatly unloved! Especially when one compares them to the barmy valuations that many of the smaller cap tech stocks that populate the likes of ARK INVEST have been lifted to such as TESLA and SQAURE and most of the rest.

So this does appear to be an opportune time to go on the hunt for smaller cap higher risk biotech stocks.

RISK RATINGS

I am also adding a risk rating to the high risk stocks where 1 is lowest risk and 10 highest risk in terms of something going wrong and the stock effectively crashing into becoming a penny stock or even going bust within the next 5 years. This is based on the sum of all my analysis of each stock and given my risk averse nature then most of the stocks will have a low probability of actually going bust within the next 5 years. Still this rating will give an extra measure of risk vs reward when entertaining potential position sizes.

CRISPR - CRSP $110 - HIGH RISK GENE EDITING - Risk 9

There is no point me conducting analysis on high risk stocks if all of the stock picks turn out to be relatively low risk compared to most of the stocks out there. So here is a real HIGH RISK small cap all or nothing stock! Crispr! A stock that could go ballistic or go to zero with little middle ground, that is CRSP. I am sure many of you will have already heard of CRISPR gene editing, for better or worse it's already here! In fact one can setup ones own gene editing lab for less than $10,000! I am not going to dive off into the deep end to cover the various gene editing therapies that the company is developing. But it is a stock I have had my eye on for some time where the recent collapse in price finally offers an opportunity to gain some exposure to, though it is very high risk given that the company is basically burning through cash at the rate of about $300 million a year, which means it's going to keep diluting shareholder funds for quite a while until it's therapeutics come good.

There are other gene editing stock plays out there such as Editas Medicine and Intellia Therapeutics which has been showing relative strength to Crisper and maybe I will take a look at separately whilst Editas is in even worse shape than Crispr when it comes to crunching the numbers. probably the best thing that Crispr has going for it is that it's market cap is only $8.4 billion, so it would not take much buying on only a little bit of good news to send this stock soaring.

Well the stock price says is all of what one can expect when investing in true high risk stocks, when the market is all hyped up about a sector or stock then all those that even offer a glimmer of what's possible soar into the stratosphere as Crispr did into early 2021 flying high as a kite to $220, which I am pretty sure had Cathy Wood's stock pumping handiwork behind it, of course then reality sets in and the stock gave up all of it's gains. In technical terms there is strong support at $74 along previous highs that should act as a floor whilst the nearby resistance level is at $136.

In terms of buying levels, I would say we are right at a buying level of $112, then next at $102. After all the stock has already HALVED from it's high which makes right now an opportune time to invest for the long-run. I am definitely buying some Crispr right now for the long-run, but I understand it could go as low as $74 for the fundamental fact that it is a long way from turning a profit, but by then it will be too late to invest as the run up to $220 illustrates. If investors are willing to bid the stock up to $220 on just vague hopes of what could be then imagine where the stock could be trading to if and when it actually starts to turn a profit!

So Crisper is a HIGH risk stock with the capacity to X10 and MORE! BUT that carries the risk that it COULD collapse to $74 or even lower to $30, hence has a risk rating of 8.

This article is an excerpt from my recent extensive analysis that concludes in my latest biotech stocks with the potential to X10 over the coming years Five More Small Cap Bio and Tech Stocks to Invest for 2021 and Beyond! has first been made available to Patrons who support my work.

Topics Include:

• Invest and Forget
• Stock Market Early Summer Correction Review
• AI Stocks Strength vs Weakness
• RAMPANT MONEY PRINTING INFLATION BIG PICTURE!
• HIGH RISK STOCK BUYING LEVELS
• RISK RATINGS
• WESTERN DIGITAL - WDC $71 - CHIA! - Risk 1
• Life Sciences Biotech Smaller Cap High Risk Stocks Investing Binge
• Biotech stock 1 - Cheap Low Risk Pharma - Risk 1
• Biotech stock 2 - HIGH RISK GENE EDITING - Risk 9
• Biotech stock 3 - Low Risk 2
• Biotech stock 4 - X10 for Max Risk 10
• High Risk Stocks Portfolio Buying Levels
• Covid India Black Mold Epidemic
• Bitcoin and Raven Coin Buying Levels

So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat.

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Bitcoin Bear Market Trend Forecast 2021 and Model Crypto Portfolio Buying Levels

• Investing in the Tulip Crypto Mania
• Bitcoin Price Trend Forecast Review
• Lessons Learned
• Cathy Crypto Wood's View on Bitcoin
• BITCOIN HALVINGS TREND TRAJECTORY
• Stock to Flow Infinity and Beyond!
• Bitcoin, Crypto's and the Inflation Mega-trend
• Black Swan 1 - Will Crypto's Get Banned?
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• BLACK SWAN 4 - Bitcoin 51% Network Attack by China?
• Black Swan 5 - Bitcoin is Already Obsolete
• US Trending Towards Hyperinflation
• BITCOIN TREND ANALYSIS
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• Alternative Scenarios
• My Crypto Bear Market Investing Strategy
• Crypto 1 - Ethereum (ETH) $2600
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• Crypto's 7 to 10
• Creating The Perfect Crypto
• How to Invest in Crypto Without Getting SCAMMED
  
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• Binance vs Coinbase
• Have ARK Invest Funds Bottomed?

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Your analyst investing in biotech stocks.

Nadeem Walayat

http://www.marketoracle.co.uk

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Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

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