It's a brave new world, and we have Sweden to thank for it.

Over the weekend, Swedish researchers announced the successful transplant of an artificial trachea to a patient whose own organ had been ravaged by cancer. The kicker: This "artificial" trachea was composed of the patient's own tissue, grown from stem cells excised from his nose and bone marrow, and implanted on a synthetic framework structure. Being cut from the same cloth as the patient himself, the organ therefore has no risk of rejection by the patient's immune system.

Stem-cell investors went wild over the news, sending shares of R&D shops including Geron (Nasdaq: GERN), Cytori Therapeutics (Nasdaq: CYTX), Aastrom Biosciences (Nasdaq: ASTM), and of course StemCells itself up as much as 20%. Most of these stocks have since given up their gains, with only Cytori holding on to most of its pop.

And that makes you wonder who was right: the folks who piled into stem-cell stocks on news of Sweden's miracle meatball, or the folks who dumped the stock post-pop?

Bull thesis
Bulls will argue that each of these companies becomes more valuable now that the utility of stem cells has been proven. Big Pharma is starting to dip its toe into the stem-cell sea, as research efforts by GlaxoSmithKline (NYSE: GSK) and Pfizer (NYSE: PFE) lend credibility to the therapy.

Bear thesis
Bears, however, will argue that while Sweden's announcement is certainly good news (for one patient in particular), we've known about the promise of stem cells for years. Problem is, the promise of stem cells has remained just that: a promise, and one as yet unfulfilled for investors. None of Geron, Cytori, Aastrom, or Stem Cells is currently profitable. Wall Street doesn't see any chance of a change next year, either.

Foolish takeaway
I'm all in favor of stem-cell research, so long as it's confined to adult stem cells such as the ones used so successfully in Sweden. But I'm not prepared to sacrifice my entire investment in furtherance of the research. I'd rather own a company with the financial wherewithal to survive, unaided, until someone develops a viable business model involving stem cells. PerkinElmer (NYSE: PKI), for example, bought out my own personal favorite stem-cell company, ViaCell, four years ago.

Unlike the R&D shops, PE actually has a P/E. It costs just 8.1 times earnings, and Wall Street has it pegged for 12% long-term growth. If stem cells are the future, I'll bet PerkinElmer will be around to see it.

Think PerkinElmer is too boring or too diversified? Think there's more profit to be made in unprofitable pioneers like Geron? Make the research easier on yourself, and add 'em to your Fool Watchlist.

Fool contributor Rich Smith does not own shares of (or short) any company named above.

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