BNGO
As previously discussed, the long term outlook for BNGO is magnificent. With strong financial management and a revolutionary product, the company is set to break the BioTech industry. So why is the stock doing so poorly in the short term? The company has done very little in sales and has not marketed itself well. It is as simple as that; until the company can find ways to increase earnings, investors will not value them as more than a $2-$3 stock.
The company has seen consistent growth in revenue over the last 7 quarters. from 1.14M in Q1 2020 to 4.66M in Q3 of 2021. The growth consistency is something all investors look for in growing companies. I believe we will truly begin to see if BNGO will continue to grow over the next three quarters.
It is important to note that small cap stocks have been hit hard by these high inflation periods, as they tend to be growth stocks. If investors do not have the stomach for this market, BNGO is not the play. But investors who are willing to continue to hold, perhaps selling options to generate income, will be rewarded when this company breaks out. The company holds $326 Million in cash, at their current spending rate they must make big plays to increase revenue within the next 8 quarters. It is important to note that BNGO has begun buying smaller BioTech companies, as a result their cash may dwindle far faster than anticipated. This is why I offer the suggestion, that we will know where this company is headed within three to four quarters.
My Positions:
Today I sold my contracts of: Long Puts - Strike: 4.00 @ 0.22, 12-12-2021, for 0.70 per contract. I completed this in order to avoid the eat away of theta over the coming weeks. I believe in locking in my profits even though I project BNGO to continue to fall well into December.
Current Options Positions
Short Calls - Strike 5.00 @ 1.21, 21-01-2022
Long Puts - Strike 2.00 @ 0.05, 21-01-2022
Short Calls - Strike 6.00 @0.21, 21-01-2022
Current Stock Positions
@5.97
@4.00
