What: Shares of synthetic biology leader Intrexon Corp (NASDAQ:PGEN) tripped 11% on Friday after hitting all-time highs on Wednesday.
So what: Investors appear to be taking some gains off the table after Intrexon stock's incredible run recently. Before mid-July shares topped the $50 mark just twice, ever, but haven't looked back since after a string of favorable analyst price targets. Consider that shares are up 110% in 2015 -- even with the 11% drop today.
It's worth noting that Steven Bulwa of Seeking Alpha published an article last night in which he proposed investing in the smaller companies collaborating with Intrexon instead of the innovator itself, simply stating that he believes the stock has gotten ahead of itself, even though he likes Intrexon's business.
While the company's growth is stunning, and in the long term its portfolios could be worth well over $7 billion (roughly the current market cap), the argument could be made that shares are overvalued today. However, I would not recommend investing in the small, micro-cap companies that collaborate with Intrexon, especially considering that most are worth less than $100 million, trade on OTC, and/or have mostly all of their value derived from Intrexon projects. It's much safer to stick to investing in larger and more established companies, such as Intrexon itself.
Now what: As I noted recently, I'm done saying that Intrexon is overvalued. There are too many growth opportunities spread across healthcare, energy, food, niche ingredients, consumer products, environmental services, laboratory services, and other industries to accurately quantify how Mr. Market is choosing to value the company. If you do invest in Intrexon stock, then be prepared to digest an above average amount of volatility and adopt a long term (five years or more) mind-set.