Billionaire Scooping Up This Under-the-Radar Stock

Last quarter the third largest buy in one billionaire’s portfolio was Natera. If you haven’t heard of it don’t fret, most people haven’t.

The fact that the stock has largely flown under the radar is very much to your advantage, in fact. It means that potentially the word isn’t fully out yet and so the upside opportunity is still substantial.

So, what is it that Natera actually does and why has the billionaire been scooping up so much of it?

Key Points

• The third-largest buy in a billionaire’s portfolio last quarter was Natera.
• Natera specializes in genetic testing and diagnostics with its flagship product, Panorama.
• It has achieved an annual revenue growth rate of 30% over the past 3 years and maintains a strong cash position. 

Get to Know Natera

Natera is a leader in the the genetic testing and diagnostics industry, and has a focus on prenatal testing, cancer screening, and organ health.

It uses cutting-edge bioinformatics technology to deliver highly accurate genetic testing and its flagship product, Panorama, is a non-invasive prenatal test (NIPT) that has demonstrated higher detection rates for genetic abnormalities than many competitors.

It’s also expanding into oncology with Signatera, a personalized cancer monitoring tool that can detect minute traces of cancer DNA in the blood that has the potential to transform how cancer recurrence is monitored.

Huge Market Opportunity

Imagine a world where people can self-monitor cancer diagnosis. It turns out there is a lot of demand for that and the global market for genetic testing is growing fast, driven by advancements in genetic research and an increasing awareness of personalized medicine.

According to Grand View Research, the market size is forecast to hit $21.2 billion by 2027, growing at a CAGR of 11.7% from 2020 to 2027.

With its presence in prenatal testing and burgeoning initiatives in oncology and organ health, Natera is looking like a promising stock so it’s no wonder billionaire Stan Druckenmiller took a stake.

Natera Is Growing Fast

Natera has grown revenues at an annual rate of 30% over the past three years. While the company is currently operating at a loss, the track record of higher revenues in tandem with controlled operating costs bodes well for future profitability.

It also has a strong cash position and manageable debt levels provide sufficient liquidity to fund ongoing research and expansion efforts.

With that said, it’s not all alone in the genetic testing arena with companies like Illumina and Invitae competing. Still, it’s a high-growth, transformative healthcare company in a fast-growing market that is increasingly catering to the burgeoning demand for personalized medicine.

Is Natera a Buy?

If analysts are right, there is still good upside in Natera to $123 per share. Admittedly, the stock has gone on a serious run already from a low of around $37 per share in the past twelve months to over $100 per share, but if it can realize its potential, Natera’s $13 billion market cap may just be the start of a long bull run.

Over the past 3 years, sales have grown at 60%, 31.1% and 32% respectively. That’s the kind of growth rate that turns the heads of astute investors and so it’s no surprise it caught Stan’s attention and, so far so good in terms of share price. Perhaps the big question is simply how high can Natera go? We’ll be watching closely to find out.