In 2017, Invitae Corporation (NVTA) was growing at a rapid clip. But it was burning through cash at an even faster one. So, we advised everyone to sell it for a 50% gain, recalls Brit Ryle, growth stock specialist and editor of The Wealth Advisory.

And we timed that exit perfectly. The stock dropped steadily from when we sold in July 2017 at $9.55 all the way down to $4.35 in March of this year. But we promised to keep an eye on the company and look for a time to get back in.

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The company was still showing great growth. If management could get that cash burn under control, even a little competition wouldn’t stop this firm.

And this past quarter, we got confirmation that the management team had done just that. And it did it three months ahead of schedule!

So, although we didn’t catch the bottom of the dip, we’ve still got a great place to get back in. And we’ve got an even better, more streamlined operation to ensure our gains. Here’s a quick recap of what got us so interested in the company two years ago.

There are about 25,000 known, or identified, human genes. And over 6,000 diseases have been linked to mutations in those genes. That’s diseases like Down syndrome, cystic fibrosis, and Huntington’s disease.

And it’s estimated that every person on earth could be carrying recessive genetic traits that may lead to a genetic disorder in them or their families somewhere down the road.

But there haven’t always been many ways to identify these mutated genes before they cause major damage. And the ways that have been available are pretty expensive and extremely time-consuming.

And that’s the problem that Invitae hoped to solve. The company’s goal was to make genetic testing more efficient so it would be more affordable and done faster. Invitae didn’t invent it, but it was perfecting the process to bring it to the masses.

So, that, in a nutshell, was what first attracted us to the company. It was growing revenues. It was cutting costs. It was adding hundreds of mutations to its testing protocols every quarter. And it was processing more and more samples every day.

Management was burning through tons of cash to keep up that pace. And that’s something you can’t do forever. But the team at Invitae knew this. And it set up a plan to cut costs and streamline the company to reduce that cash burn by at least 50%.

This past quarter, management hit the target. And that little gift came a full quarter earlier than even Invitae’s management had planned. Management increased guidance for 2018 full-year sales from $135 million–$140 million to $140 million–$145 million. And the company sees itself as capable of doubling in size for the foreseeable future.

Management sees Invitae doubling every year for a long time. And it’s got the numbers to back up that claim. Revenues grew by over 100% last quarter. And the number of samples almost doubled from 40,000 to 78,000. And after it cuts the cash burn, management shouldn’t have to raise more capital for the next few years, either.

Invitae recently broke the $1 billion market cap ceiling. But we could be looking at a company worth $10 billion within a few years. And all the while, the company was still expanding. The cost of each sample was still dropping. The revenues were still growing. And gross profit shot up, as well.

And now, we’ve got the opportunity to buy back in to an even stronger company at a price close to where we exited over a year ago. I recommend Invitae for $14.50 or less. I’m starting it back off with a 12-month target price of $20.

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