Q: Any thoughts on what prompted the big rise for ABCL on Friday? As a somewhat of a long shot play (but for a longterm hold), do you see potential in this business?
5i Research Answer:
There was no company news, but the FDA indicated it planned to begin phasing out testing on certain animal products, resulting in cost savings for many companies. ABCL is still down 18% YTD and 45% over one year. It has lots of cash but very negative cash flow. The cash makes it more interesting than otherwise, but we do not think it is really the type of stock to own in the current market (small size, high risk, weak momentum).