Finding the bottom of a falling penny stock can be valuable for speculators and analysts, but only when the bottom has actually been determined. Pacific Biosciences of California Inc. (PACB), looking to raise capital with the assistance of Cantor Fitzgerald & Co., was upgraded by Wall Street analysts at Maxim Group Friday. Having dropped -76.47% since February, the upgrade on PACB stock from a “hold” rating to a “buy” rating, coupled with an earnings update for Q3, has triggered the official watch, looking for the bottom bounce to occur before entry for a long position.
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PACB Stock Chart
Market Cap: 69.29M
Close: 1.24, up 0.07 (5.98%)
Volume: 518,151
High: 1.29
Low: 1.15
Trades: 1,382
Average Trade Size: 374
Authorized: 1,000,000,000
Issued and Outstanding: 55,760,380
Note: Issued and Outstanding Subject to Update via Q3 10-Q
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From October 27, 2010 through October 26, 2012, PACB stock traded at a high price of $17.47 and a low price of $1.15. The fact that revenue from SMRT® Cell and reagent consumables, instrument service contracts and grants for Q3 totaled only $2.8 million compared to revenue of $7.3 million for Q2 (see here) shouldn’t help put the brakes on the two year slide Pacific Biosciences has been on. However, being able to get in on the cheap, may just be the recipe for an eventual bounce.
On August 6th and 7th, Chairman, CEO & President of Pacific Biosciences, Michael Hunkapiller, purchased 52,500 and 347,500 shares of PACB stock at a prices of $1.7459 and $1.75, respectively. (see here) Insiders buying typically indicates that the price of their stock is too low to pass up. At present, the discount from Hunkapiller’s purchase price would be nearly 30%.
Although the Company’s system revenue backlog of 5 units as of September 30, 2012 for the PacBio® RS High Resolution Genetic Analyzer, with expenses heavily outweighing revenues, the May 1, 2012 dated prospectus to raise $30 million could become an annual event unless sales increase dramatically.
Pacific Biosciences of California’s PACB stock is currently trading at:
- -27.09% below the 50 day moving average (1.70);
- -39.90% below the 200 day moving average (2.06);
- -76.47% below the 52 week high (5.27); and
- 7.83% above the 52 week low set Friday (1.15)
About PACB Stock
Pacific Biosciences of California, Inc. develops, manufactures and markets an integrated platform for genetic analysis. The Company has developed a technology to study the synthesis and regulation of DNA. Combining recent advances in nanofabrication, biochemistry, molecular biology, surface chemistry and optics, Pacific Biosciences created a technology platform using its proprietary single molecule, real-time, or SMRT®, technology.
Pacific Biosciences’ SMRT technology uses the natural processing power of enzymes, combined with specially designed reagents and detection systems, to record individual biochemical events as they occur. The ability to observe single molecule events in real time provides the scientific community with an advanced tool for investigating basic biochemical processes such as DNA synthesis.
Click here to view the SEC filings for PACB.
Bottom Line: PACB is worth an addition to the list of penny stocks to watch, especially since they are teetering on the Nasdaq warning level after hitting a new 52 week low Friday. Will PACB stock get back to the $17, or even $5 level it traded at in February? Not without a reverse split or a World Series like sweep in the sector for sales of their genetic analysis platforms.
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