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Is OCGN Stock a Solid Long Term Investment?

Stock Market

People who are looking for a solid long-term investment genuinely have their work cut out for them these days. The stock market always seems to be in a state of flux because of one thing or another. If it isn't news about Covid, then it's other world events that keep everything in a state of uncertainty, often to the point where it becomes difficult to know whether you should invest in anything at all, much less picking and choosing long-term investments. Fortunately, there are still some good options out there that can be used for these types of financial decisions. The thought process is always that eventually, things are going to come down and return to some sense of normalcy, although that's something that hasn't been seen for more than a few minutes at a time in a number of years now. In this particular case, the question is whether or not to utilize Ocugen, traded publicly as OCGN, as a solid long-term investment. If that's what you're looking for, then you might have made the decision to take a closer look at this particular stock. However, it's imperative that you look closely and know exactly what you're potentially getting into before you start to invest any significant amount of money, especially when you're talking about a stock that is this shaky.

Who Is Ocugen, Inc?

If you've never heard of the company until you started hearing rumblings of things about them on the stock market, the first thing you'll want to do is learn who they are and what they're all about. At their core, they are a bio research company that conducts clinical trials in an attempt to develop new medications and treatments for a number of different diseases. For some investors, this will immediately send up red flags, largely because these types of companies tend to have something of a love-hate relationship with the stock market. There are days when it seems like companies of this type can do absolutely nothing wrong and then less than a week later, you're watching the stock plummet to the point that it's not worth the piece of paper that you used to write down the price on. It's also worth noting that where this particular stock is concerned, it hasn't exactly been smooth sailing. As a matter of fact, this company is one that has struggled a great deal to find itself, especially where trading on the stock market is concerned. There have been a number of things that have prevented it from performing especially well, and it doesn't help when you bring all of the other factors that can affect the stock market into play. In fact, all that does is make the situation seem even more dire. In order to gain a better understanding of all of this, you have to dive into each one of the things individually and examine them one-by-one. Only then can you tell whether or not the company has a strong enough foundation to even consider the idea of using it as a long-term investment.

Issues That Must Be Addressed

At first glance, you will notice that there are a number of issues with this particular company that are adversely impacting its stock. Even if you're relatively new to the stock market and you don't have much experience at all in investing, there are plenty of red flags here that should make you decide to stop and take a second, and perhaps even a third look at things before you spend any of your money. For starters, the company focuses on a fairly small niche, albeit an important one. While they do focus on a number of different diseases, all of the diseases they research are capable of impacting one's vision. Therefore, the company doesn't have the wide range or the financial backing that typically comes to other types of clinical-stage pharmaceutical companies, especially the ones that deal with things like cancer and heart disease. That fact alone impacts their bottom line in a big way. If you're not convinced of that fact, consider this. The company made less than $1 million in revenue throughout the last year. Considering the high dollar amounts that are involved with these types of companies, that's virtually like saying the company didn't make any money whatsoever. It doesn't help when you realize that shareholders have been selling the stock as if it's contaminated with the plague over the course of the last 12 months. The truth is, most shareholders can't get rid of their stock fast enough and they want nothing to do with the idea of going near it again. It also doesn't help that this particular stock has been more volatile than virtually everything else in the stock market over the course of the last three months. While some people will try to make excuses for the volatility of the stock market and why this particular stock has performed so poorly over the course of the last 90 days, most stock market analysts agree that the reason this particular stock has not performed well is largely because there are so many issues with the company itself. In fact, a number of analysts strongly feel that it is virtually impossible for this company to perform well at this time. In short, there are a number of these individuals who believe that it's no longer possible for the company to pull itself together and get out of the red. If you're an investor, this is obviously something that should concern you a great deal. Are things really so bad where this particular company is concerned or is there something more to it all? If you're seriously considering using it as a long-term investment, or any other type of investment for that matter, then it's imperative that you look at things more closely so that you know what is happening and why.

Branching Out

Another thing that has a lot of investors worried is the fact that the company seems to be branching out lately, focusing on creating vaccines for Covid-19 and other types of things that aren't traditionally in their wheelhouse. That's one of the reasons that the stock market has been so unkind to this particular company over the course of the last three months. It doesn't help that the vaccine that they created, Covexin, has only been approved and utilized in India. They weren’t able to gain approval for it in North America, which is precisely where the company had hoped to use it. There are a couple of different things at play here with direct regard to this vaccine as well. The first is that they have experienced some positive initial success with the vaccine where they have been using it in India. On one hand, that allowed their stock to increase in value for a short while. However, the bigger picture is what has caused it to tumble so much over the course of the last few months. They still haven't obtained approval for using it in North America, despite the fact that other vaccines by both Pfizer and Moderna have been approved for well over a year. In addition, the way that the company set things up, it is impossible for them to get any type of revenue from the vaccine in any capacity unless it is approved for use in North America. In short, they could distribute this vaccine to every healthcare facility in the world, save for those located in North America and they wouldn't see a single dime from any of it. Unless they get the approval from the FDA, they are essentially spending money to create a vaccine that they will never recoup any of the cost for. If you really want to dive deeper into things, this also brings about a lot of questions concerning whether or not a company should make a profit from ensuring the health and well-being of other individuals, but that is a debate for a different day. For now, what you need to know is that they're so panicked about their current financial status that they're considering applying for emergency approval in order to use the vaccine in North America so they can actually start seeing some type of profit from it all. Truth be told, it would be almost impossible for them to make a profit in the long run off of this vaccine at this late date. Even if they start seeing some funds from its distribution, it doesn't mean that they're going to end up making a profit from it. They took a gamble by assuming that the vaccine would be approved in North America right along with all of the others and they lost. Now they're paying the price for it and so are all of their investors.

Looking for a Silver Lining

It doesn't help that all of the current research suggests that this vaccine, one that they counted on as being their saving grace, isn't as effective as the ones created by their direct competitors, Pfizer and Moderna. As a matter of fact, that's precisely why this vaccine still hasn't been approved in North America. Despite the fact that the company has applied for emergency approval, there is absolutely nothing to indicate that they will actually receive it. That leaves the company in a precarious position and it leaves their investors with a strong desire to get rid of the shares that they're already holding as quickly as possible. As a matter of fact, the stock has tumbled so much that you can currently buy a share for $3.24. If there was any genuine chance that the stock might dramatically increase in value, that would be a tremendous opportunity for investors who want to make a significant amount of money in the long term. Considering the fact that the company seems to be on a slippery slope, that may not be possible. It doesn't do an investor any good to purchase several shares of a particular stock just because it's cheap and can be had for next to nothing if there is very little chance of that stock ever going back up. You're not making any money in these cases, you're merely throwing the money you already have away. That's what a lot of investors believe they are doing with this particular stock and again, it's worth noting that this is precisely why so many people decided to sell their shares over the course of the last three months.

When Will the Bleeding Stop?

As far as the relatively few investors that have decided to hold on to their stock are concerned, there's been a lot of questions about when the bleeding will stop. Oddly enough, the stock actually went up over the course of the last 24 hours of trading, but only by about $0.15 per share. It's also interesting to note that the reason it went up is because of the news surrounding the very slim potential that the vaccine might actually gain emergency approval. However, it's worth remembering that this is highly unlikely to happen, as previously discussed. Once that news comes through, there's little doubt that the stock will continue to tumble unless something happens to turn things in their favor. At the moment, that doesn't seem like something that's likely to happen. For the time being, it would seem almost insane to invest in this particular stock as a long-term investment. There are too many things that are currently stacked against the company and their performance in the stock market has reflected this as of late. However, the bigger problem is that it hasn't just been over the course of the last three months that they've experienced problems. Remember, they haven't made any appreciable revenue in the last year. Therefore, you’d really be better off looking at something else that's both more stable and more likely to make money instead of costing you money.

Allen Lee

Written by Allen Lee

Allen Lee is a Toronto-based freelance writer who studied business in school but has since turned to other pursuits. He spends more time than is perhaps wise with his eyes fixed on a screen either reading history books, keeping up with international news, or playing the latest releases on the Steam platform, which serve as the subject matter for much of his writing output. Currently, Lee is practicing the smidgen of Chinese that he picked up while visiting the Chinese mainland in hopes of someday being able to read certain historical texts in their original language.

Read more posts by Allen Lee

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