David Nierenberg (Trades, Portfolio), founder and president of Nierenberg Investment Management Co., revealed on Friday he boosted his firm’s position in Berkeley Lights Inc. (BLI, Financial) by 15.99%.
The guru’s Camas, Washington-based firm, which manages the D3 Family Funds, typically invests in a concentrated number of undervalued, domestic, micro-cap growth stocks. He is known to take activist positions in some circumstances.
According to GuruFocus Real-Time Picks, a Premium feature based on 13D, 13G and Form 4 filings, Nierenberg invested in 504,902 shares of the Emeryville, California-based biotech company on March 1, impacting the equity portfolio by 0.61%. The stock traded for an average price of $1.62 per share on the day of the transaction.
He now holds 3.66 million shares total, giving it 4.44% space in the equity portfolio. As of the fourth quarter of 2022, 13F filings show it was his sixth-largest holding. GuruFocus estimates Nierenberg has lost 65.77% on the investment since establishing it in the second quarter of 2022.
Investors should be aware that 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
About Berkeley Lights
Founded in 2011, Berkeley Lights, which specializes in digital cell biology, provides a technology platform that assists scientists in studying interactions between cells to accelerate the development of biotherapeutics and other cell-based products.
According to the Nature Journal, the company’s technology “enables real-time, live, non-destructive, and iterative interrogation of thousands of single cells in integrated, end-to-end workflows for applications such as antibody discovery, cell line development and T cell functional analytics.”
Nanalyze reported the technology is based around optofluidics, which uses light and semiconductor technology to move individual cells into tiny chambers called NanoPens. These NanoPens are then stored on a line of chips called OptoSelect, which present various configurations depending on the researcher’s needs.
These chips form the foundation for Berkeley’s flagship product, the Beacon optofluidic platform, which is used to process and analyze cells in a quicker and more efficient manner than traditional methods.
The company is divided into two segments, products and services. Products generated the majority of its revenue at $48.9 million in fiscal 2022.
Valuation
The company, which went public in July of 2020, has a $93.83 million market cap; its shares were trading around $1.30 on Friday with a price-book ratio of 0.66 and a price-sales value of 1.11.
After peaking around $106 in December of 2020, the stock has tumbled 98.79% over the past several years as the Covid-19 pandemic, rampant inflation and interest rates, among other factors, affected the market.
Due to this decline, the GF Value Line, which is based on historical ratios, past financial performance and analysts’ future earnings projections, suggests the stock is a possible value trap currently. As such, potential investors should do thorough research before making a decision.
At 19 out of 100, the GF Score indicates the company has poor performance potential. While it received a moderate rating for financial strength and a low profitability rank, there was not enough data to calculate grades for growth, GF Value or momentum. As such, the score may not accurately reflect Berkeley’s full potential.
Earnings and updates
On Feb. 23, Berkeley Lights disclosed its fourth-quarter and full-year 2022 financial results.
For the three months ended Dec. 31, the company posted revenue of $17.84 million, which was down from the prior-year quarter. Further, the net loss of $29.3 million, or 41 cents per share, also widened from a year ago.
As for the full year, Berkeley Lights reported an 8% decline in revenue from 2021 to $78.60 million. The net loss was $98.04 million, or $1.42 per share.
In a statement, CEO Siddhartha Kadia, Ph.D., discussed the company’s performance.
"It was a transformational year in 2022 for Berkeley Lights as we made significant changes across the business and made important progress on the execution of our strategic plan," he said. "While our revenue this quarter was impacted by ongoing initiatives to reshape our business model as well as the timing of Beacon platform placements and decline in Partnerships & Services revenue, we are confident we are laying the foundation for future growth.”
It is also in the process of acquiring IsoPlexis Corp. (ISO, Financial) in an all-cash transaction valued at $57.8 million. By acquiring the company, which developed a single-cell detection system for cancer, Berkeley Lights will accelerate its transformation from a technology platform company to a life sciences company.
Upon the close of the deal, which is expected to occur sometime this quarter, the combined company will be named PhenomeX.
Guru interest
Nierenberg is the company’s largest guru shareholder with a 5.07% stake.
Other gurus with large positions in Berkeley Lights are Catherine Wood (Trades, Portfolio) and Larry Robbins (Trades, Portfolio). Jim Simons (Trades, Portfolio)’ Renaissance Technologies, Paul Tudor Jones (Trades, Portfolio) and Caxton Associates (Trades, Portfolio) also own the stock.
Since its initial public offering, the number of guru buys has exceeded the number of sells.
Portfolio composition and performance
The investor’s $133 million equity portfolio, which was composed of 37 stocks as of the end of the fourth quarter, was largely invested in the industrials and financial services sectors.
Other health care stocks Nierenberg held as of Dec. 31 were Premier Inc. (PINC, Financial) and OraSure Technologies Inc. (OSUR, Financial).
