Why Sequenom Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Sequenom (Nasdaq: SQNM  ) , a biotechnology company focused on delivering products and services that aid in genetic analysis and research, spiked 10% earlier in the trading session after reporting its first-quarter earnings results.

So what: There's nothing quite like a biotech earnings report to completely confuse investors. Sequenom's earnings report this morning highlighted a 10% increase in sales to $14.9 million, with a net loss of $0.22 per share. Both of these results actually missed Wall Street's expectations for revenue of $16.5 million and a smaller loss of just $0.19 per share. Sequenom noted a 187% increase in its diagnostic services as the reason its sales rose by 10%, but pointed to rising costs as the reason for the widening loss.

Now what: Like I said, confusing! Today's reaction by shareholders seems to be in response to the good reception Sequenom has seen thus far for its new diagnostic products. While I agree with investor sentiment that this is good, I'm not quite sure how to correlate that to today's large move upward. I believe Sequenom has potential, but I can think of better areas for my money than a company that has continuously lost money throughout the years. Until Sequenom can turn a profit, I'd suggest looking elsewhere.

Craving more input? Start by add Sequenom to your free and personalized watchlist so you can keep up on the latest news with the company.

Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.

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Read/Post Comments (15) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 04, 2012, at 3:34 PM, unkownuser wrote:

    Hi Sean,

    Strong words... you have better ideas for your money huh... like what? That's an easy comment to make if you are unwilling to provide an actual pick.

    Your comments are worthless if you don't provide a timely recommendation (pick) that will beat Sequenom.

    Just my opinion.

  • Report this Comment On May 04, 2012, at 3:46 PM, Troy2008 wrote:

    You could throw a dart and beat sqnm over time.

  • Report this Comment On May 04, 2012, at 4:00 PM, steelpoker wrote:

    Hmmm.... Could it be that they are using Cash Flow Accounting for the new tests....

    Let's see that would mean:

    1. Costs are very high because they are being incurred now... and selling like gangbusters...

    2. Revenues have not yet been realized until processing completed...

    Just a thought!

  • Report this Comment On May 04, 2012, at 4:06 PM, unkownuser wrote:

    Hi Troy,

    Okay, stand by your words, throw a dart and make pick... chicken?

  • Report this Comment On May 04, 2012, at 4:16 PM, Troy2008 wrote:

    EXAS

  • Report this Comment On May 04, 2012, at 4:20 PM, Troy2008 wrote:

    I've been winning this game for years unknownuser. When sqnm dreamed of a t21 test the pps was $25

    Now that it's out the pps is $5.

  • Report this Comment On May 04, 2012, at 4:37 PM, unkownuser wrote:

    EXAS is a POS (no pun intended), they wont be in the market for years... and then when they TRY to establish themselves, thousands upon thousands of GI docs (who make a living doing the more accurate colonsocopy that the low-accuracy test cologuard seeks to replace), will SCOFF at replacing what they do with a stool screen.

    Its all about the money, and the docs will not give it up even IF it were more accurate than a scope (which it isn't).

    EXAS is a biotech just begging for a short attack, and it WILL happen, and the company will be decimated and go Chap 11, or they will need death-spiral dilutive financing LONG before shareholders EVER see a micro-penny of return.

  • Report this Comment On May 04, 2012, at 4:43 PM, unkownuser wrote:

    And by the way, I actually have exas in my picks as a speculative play, despite my long-term bearish view. I think there are enough fools out there who will believe in enough in this one-trick-lame-pony to drive the price up so I can end my pick in the green before it dumps.

  • Report this Comment On May 04, 2012, at 4:46 PM, Troy2008 wrote:

    Boy you're delusional. The non invasive DNA test is more accurate than a colonoscopy and will create colonoscopies for those that refuse to get a colo as a mere screen.

    Wall street and the large funds in the know are much smarter than you, that is why EXAS has run from .22 cents to $10.00 and SQNM has declined from $24 to $5 in the same time frame.

    Fact. 96 million in cash and ZERO debt. You're clearly a jealous fool that has lost his A$$ on sqnm and betting against EXAS

    Remember, Troy's the man! LOL!!!

  • Report this Comment On May 04, 2012, at 5:17 PM, megastockmaster wrote:

    This article misses important facts and looks like it was intentionally misinformed.

  • Report this Comment On May 04, 2012, at 5:24 PM, unkownuser wrote:

    talk about delusional... game on! lets see where exas is in 2 years (exas.pk)

  • Report this Comment On May 04, 2012, at 5:29 PM, unkownuser wrote:

    btw, i have made money on sqnm... had it as a short for 2 years and didnt go long until maternit21 launched

    didnt find out about exas until i went long sqnm. only learned about exas because so many exas longs were over at the sqnm board trashing sqnm... did my dd on exas, and it is what it is, A LONG TERM LOSER GOING TO CHAPTER 11... but i like to play stocks long, so i have no real world bets on exas even though it is obviously going to YOU (i mean ZERO, like you )

  • Report this Comment On May 04, 2012, at 5:38 PM, unkownuser wrote:

    Here's a good joke... the same people who don't want to have a colonscopy are going to be willing to retrieve a well-formed-solid-stool from the toilet, maybe even put it on a dinner plate and freeze, and then package it and bring it carefully to the lab for CROSS SECTION COLOGUARD STUDIES!

    This is no hemoccult smear, throw in an envelope, and send off to the lab at ambient temps we're talking about here... I'd rather have the scope for God's sake!

  • Report this Comment On May 04, 2012, at 5:59 PM, Troy2008 wrote:

    Unknownuser, I've already had this bet with many sqnm "investors" and clearly won big. WITH REAL $.

    The "game" has been played and sqnm lost by committing fraud. Exas won with much better management, the backing research of the famed Mayo Clinic and the sense to go through the FDA. To market next year with FULL backing by Doc's, Insurance companies and the U S Government. There is no digging in the toilet or driving to a lab. All done simply through the mail. ColoGuard is much more accurate then a scope that misses many right sided lesions.

    You're no longer worth my time as you're so uninformed it's comical. Try getting at least ONE fact correct before mouthing off about something you know nothing about.

    The opposite of everything you say is the truth. It's sad to see people like you in this world. Have fun trashing EXAS on their message board with all of your multiple aliases. It wont help you.

  • Report this Comment On May 04, 2012, at 6:15 PM, unkownuser wrote:

    Already made big money huh... well as they say, bears make money, bulls make money...

    Pigs who've already made big money and are fantasizing about more, well they get slaughtered

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