Fluidigm (NASDAQ:FLDM), Cypress Semiconductor (NASDAQ:CY), and Under Armour(NYSE:UA) are very different businesses, but each could offer investors market-beating returns, according to three Motley Fool contributors.
Read on to learn:
- How next-generation drug research and development is driving Fluidigm’s future.
- Why investors might be underappreciating Cypress Semiconductor’s shift in business mix.
- What could be signaling that Under Armour’s worst days are behind it.
A backdoor biotech stock
Todd Campbell (Fluidigm): This under-the-radar maker of instruments and chemical reagents used in labs has seen its shares jump recently. But it’s still an under-followed stock, and that could mean there’s plenty of upside left for new investors.
Fluidigm supplies tools that life sciences’ researchers use to better understand and inform innovations, such as immuno-oncology medicines. It sells machines to research labs, but a bigger opportunity for long-term growth and profitability may be selling the consumables used in these machines.
Its integrated fluid circuits allow researchers to create precisely controlled environments, enabling single-cell analysis. However, mass cytometry solutions used to assess the immune status in blood and solid tissue microenvironments are the bigger driver of Fluidigm’s growth right now. Last year, the installed base of its mass cytometry machines grew 20%, which contributed to mass cytometry sales jumping 48% to $19.1 million in Q4.
The mass cytometry strength more than offset slipping fluid-circuit sales, so Fluidigm’s total sales grew 17% year over year to $32.3 million last quarter. For the full year, revenue was $113 million, up 11% from 2017. That only scratches the surface of what the company pegs to be a $1.5 billion addressable market.
Since mass cytometry now accounts for 52% of the company’s revenue, up from less than 40% in 2017, ongoing research into inflammatory conditions, autoimmune diseases, and the application of discoveries for immuno-oncology treatments could boost overall revenue growth in 2019, making this a small-cap stock worth buying.
Quality connectivity on the cheap
Nicholas Rossolillo (Cypress Semiconductor): Shares of Cypress Semiconductor, a maker of connectivity and microcontroller chips, have been battered in the last year. As digital-memory pricing has tumbled since last summer, companies that are sensitive to this cyclical industry have been hurt. Thus Cypress shares are down 14% in the last 12 months.
Though it still has exposure to memory products, that’s only part of the story. The chipmaker has made it clear that…
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