Holding onto stocks for the long term is hard. When stocks go down, many investors want to bail out. When they go up, it's tempting to cash in. In this Motley Fool Live video recorded on Oct. 6, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss two stocks that you'll probably never want to sell.
Keith Speights: Brian, you asked me on Monday about a healthcare stock that I don't plan on ever selling. I'm going to flip the script on you here. Are there any among your holdings that you said the same thing about -- stocks that you would never sell?
Brian Orelli: I tend to be a value investor and looking for undervalued biotechs and biotech is often a place where things end up getting overvalued and then the risk-reward profile doesn't make sense. For me pretty much everything's on the table, but I'll give you two, maybe that I hope I'll never have to sell.
One is Vertex Pharmaceuticals (NASDAQ:VRTX) it's obviously a cystic fibrosis expert, it's throwing off a ton of cash and I think that the company should be able to use that money to reinvest and find its next niche and continue to grow. I suspect that I'm more likely to end up selling that one because it got acquired than that I would sell because it became overvalued. It's large enough that it's probably less likely to get into that overvalued range where I would actually sell it.
At the opposite end of the spectrum, Twist Biosciences (NASDAQ:TWST) the ticker there is TWST, it's a lot smaller position for me because it's substantially more risky. But I think it has a lot of great potential and I think it can grow substantially and maybe it's even overvalued right now. But I was willing to take a small position thinking that it will continue to grow.
It's currently providing DNA to researchers so that their main thing is that they can make DNA very cheaply, a lot cheaper than other technologies and that allows them to create different DNA's for researchers. They can create libraries, and they're using those libraries both to provide them directly to researchers that order them, as well as creating libraries and then helping drug developers develop antibody drugs from those libraries.
But I think the real opportunity here is in data storage they think that if they can get the price of DNA cheap enough. Then for long-term data storage things that don't need to be read all that often, but might need to be read at some point. They can create this data store. They can use DNA to store the data, DNA is fairly stable so as long as you can make it cheaply. You can put it in the freezer and store it long term and then if you need to really to sequence it, if you ever need that data again, you can just sequence it.