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Is a Short-Squeeze Driving Fulgent Genetics Higher?

By Danny Vena, Jason Hall, and Brian Withers - Feb 16, 2021 at 10:00AM

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The genetic testing services specialist has been on a tear.

Fulgent Genetics (FLGT -1.51%) soared in 2020, with its stock gaining more than 300%. Investors hoping for a pullback in 2021 have been disappointed, as the stock has gained a jaw-dropping 200% so far this year. This has investors wondering whether there's a short squeeze at work, or if it's something else driving the stock's stratospheric growth.

On this clip from Motley Fool Live, recorded on Jan 29, "The Wrap" host Jason Hall and contributors Danny Vena and Brian Withers dig a little deeper into what's happening.

Brian Withers: The most voted up question is the Fulgent.

Jason Hall: Fulgent Genetics.

Brian Withers: Fulgent and I'm assuming we're talking about Fulgent Genetics.

Jason Hall: Yeah, yeah.

Brian Withers: We talked a little bit yesterday about trying to figure out whether a company was under a short squeeze. You can go to Yahoo! Finance, put in a ticker, click "Statistics", and I'm looking at short percent of float its 29%, which is actually pretty high.

Jason Hall: That's really high, yeah.

Brian Withers: The average volume over the last three months is 1.19 million and the average volume over the last ten days is 1.9 million. The volume's not up, so it's potentially some short-selling or short-squeeze happening, but it doesn't look like it's a wild run on the stock by any means.

Jason Hall: Yeah, I will say this though. This is just relatively recent recommendation in December and I think in November and a couple of different Foolish services. Since it's just a smaller company, I mean, the market has gotten a little bit bigger but still relatively smaller. Getting a recommendation for some of the Foolish services might have some role in having pushed it up.

Brian Withers: Yeah, it's only a $1.7 billion company. It's really still, yes, very small and 1.9 million shares traded on any given day is not significant.

Jason Hall: No, it's like 1% of GameStop. Which would you rather own in 10 years? A mall retailer that sells video game consoles and used video games or a company that's really good in genetics?

Brian Withers: There you go.

Jason Hall: [laughs] I'll take the biotech, that's me.

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Fulgent Genetics, Inc.
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