Pacific Biosciences of California's Stock Move Is Certifiable

A double-digit jump on no news.

Brian Orelli
Brian Orelli
Dec 18, 2015 at 4:19PM
Health Care

What: Pacific Biosciences of California (NASDAQ:PACB) is up 12.4% at 3:40 p.m. EST on no news today.

So what: The last thing investors heard from management was on Tuesday, when Pacific Biosciences announced that the company had "received ISO 13485 and ISO 9001 certifications for the design, development, manufacture, distribution, installation, and servicing of its nucleic acid sequencing platforms."

The International Organization for Standardization (ISO) certifies companies that make medical devices and in vitro diagnostics among many other things. The ISO 13485 covers the manufacture of medical devices, while ISO 9001 certifies that the company can "consistently provide products that meet customer and applicable statutory and regulatory requirements."

As Pacific Biosciences moves into diagnostics through its partnership with Roche, the ISO designations will be helpful -- but it's not a reason for the stock to pop three days later. Instead, today's move is likely caused by traders guessing which way the stock will move next. If there are more buyers guessing that it will go higher than sellers guessing it will go lower, the stock will jump without any real reason. Rival Illumina (NASDAQ:ILMN) was flat on the day, supporting the idea that this was a technical move rather than based on fundamentals.

Pacific Biosciences has been on a tear -- handily beating Illumina -- since launching its new sequencing machine at the end of September. The machine's lower cost should help Pacific Biosciences take some market share from Illumina, but the real benefit may come from its use as the backbone of the in vitro diagnostics that Roche is developing.

PACB Chart

PACB data by YCharts.

Now what: Technical moves aren't a reason for long-term investors to buy or sell. Instead, focus on the fundamentals. We should get an update on how the launch is going at the J.P. Morgan Healthcare Conference during the second week in January. Until then, there's no reason to focus on the daily gyrations of the stock price.