ARK Invest founder and CEO Cathie Wood is a fan of companies that hold the potential to be disruptive. In this Motley Fool Live video recorded on April 21, 2021, Motley Fool contributors Keith Speights and Brian Orelli talk about why Wood especially likes a healthcare stock that's somewhat under the radar -- Twist Bioscience (TWST -4.01%).

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Keith Speights: You and I promised one of our viewers earlier this week that we would discuss Twist Bioscience today and so we're going to do that. Twist Bioscience, by the way, is one of Cathy Wood's favorite healthcare stocks. It's the fifth-largest holding in her ARK Genomic Revolution ETF (ARKG -2.40%) and so Brian, we said we're going to talk about Twist Bioscience so let's talk about it. First of all, why do you think Cathy Wood likes this stock so much?

Brian Orelli: I guess Twist is in the business of creating or synthesizing DNA. The company can do it at a much lower cost than traditional synthesis process. We're making DNA for decades, but the "twist" is that they make the DNA at a much cheaper cost per base fare and so there's a whole bunch of applications here.

Researchers need whole genes for experiments or for expression of proteins that you can use like the coronavirus DNA as a positive control for COVID-19 tests. You want to make sure your COVID-19 test is working and so you put the coronavirus DNA, not the actual coronavirus into the well, and then you see that it detects the coronavirus DNA.

You can use DNA for probes to highlight chromosomes. If you want to sequence a specific certain number of genes, instead of sequencing the whole genome, you can use DNA to sequence just a specific certain genes and then that will cut down your sequencing costs because you don't have to sequence the entire genome just to get the genes that you're interested in.

You can use the DNA to then create library of antibodies and then in theory, you can even use DNA to store data. Genes are just for base pairs and so you can just write the DNA the same way you would save files and so if you need long-term storage, they can get the Twist and get the price down enough than they can store data as DNA and so there's so many applications and the potential market for Twist is so large and I think that's why Cathy Wood likes it so much.

Speights: Yeah. The company's doing so many cool things. I mean, like I said, it's the fifth-largest position in the ARK Genomic Revolution, ETF and it certainly sounds like Twist is helping spark a genomic revolution with all they're doing.

I was looking at what the company itself estimates its total addressable market is and they are projecting around $1.8 billion in synthetic DNA alone, but they think they can expand that to $3 billion per year with some of their other efforts and then when you start adding on drug discovery and adding on the data storage, storing data in DNA, I mean, they're saying that adds billions and billions.

This a company that has huge opportunities. Its market cap right now is around $6.4 billion. If you start totaling up everything that Twist could target, the stock could have some real growth prospects and you're right that Cathy Wood likes this stock because it has some pretty intriguing growth prospects.

Orelli: It reminds me a lot of Illumina (ILMN -1.43%). As Illumina has been able to lower their cost of sequencing, it has opened up new opportunities for them. So even though they are lowering the cost per genome, they are actually increasing their revenue because now there's experiments that researchers couldn't do previously, that now they are interested in doing.

It's the same way it's going to work with a writing DNA that the lowering of the cost is going to create opportunities that didn't exist when the cost was higher to write the DNA.