Thursday April 12, 2012
by Andy Obermueller, editor Game-Changing Stocks
Our goal is to uncover breakthrough investments; we look for companies that offer an exciting new technology, concept or industry that could change the world.
Here, we look at three such companies -- a biofuel play, a satellite imaging firm and genomics company -- with the added feature of inside buying. Specifically, we looked for trades in which large shareholders invested at least a million dollars.
Amyris (AMRS) is a biofuel company; it is a pioneer in "synthetic biology" company. Its scientists use special organisms that are basically little living factories that have been genetically programmed to produce a certain compound.
This process leverages the natural abilities of plants to process sugar, and renewable sources of plant sugar is the inevitable future of fuel.
The company was founded in 2003 and won grant funding from the Bill & Melinda Gates Foundation to develop the underpinning of an anti-malaria drug. The effort was a complete success.
Now the company is setting its sights on biofuel, specifically on generating cellulosic ethanol from Brazilian sugarcane.
Biofuel has its skeptics, of course. And with politics invading the debate, many are hoping that biofuel will fizzle. But the reality is that this technology does work. And it's getting better every day.
This buy was made by an oil company, Total SA. The French giant and oil sector expert is categorized as an "insider" because it was already a 10% owner of the company.
It has made a $24.5 million bet on this technology, buying nearly 4.6 million shares of the $300 million company at $5.78 each.
Geoeye (GEOY), a satellite company that sells images to intelligence agencies, among other customers.
International tensions in a variety of "closed" hotspots like North Korea and Iran make this type of signal intelligence invaluable, and such images are the lifeblood of operations in forward areas like Afghanistan.
GEOY was the target of a series of buys, totalling more than $40 million, made by six insiders late last year. These buys were made at an average purchase price of $21.98 in the latter part of November.
The nice thing here is that this is a true conviction buy by executives and directors. Their message is clear: As the company's stock falls under its fair value, we're going to buy it. This is an aggressive growth play.
Genomic Health (GHDX) tests patients for cancer using genomic-based therapies. Researchers have found that the various intracellular signals that cause the body to carry out certain functions can be stopped.
There are hundreds of clinical trials for various treatments that target all sorts of maladies, most notably cancer.
These insider buys were made by Baker Bro. Advisers LLC, a hedge fund. This health-care focused shop has a long history of discovering innovations in the health-care/biotech space.
With its leading experts on the cutting edge of the field and with billions of dollars to invest, Baker Bros. is closely watched. It tends to make big bets on a few industry leaders, and its "conviction" buys are a bellwether on Wall Street.
Learn more about this financial newsletter at Andy Obermueller's Game-Changing Stocks.