Every so often on Rule Breaker Investing, Motley Fool co-founder David Gardner shares a five-stock sampler -- five active recommendations in either Rule Breakers or Stock Advisor that are poised for great things. This week: five healthcare companies that are innovating treatments and drugs that are making the world healthier. Learn more about Amgen (NASDAQ: AMGN), bluebird bio (NASDAQ: BLUE), Editas Medicine (NASDAQ: EDIT), Illumina (NASDAQ: ILMN), and Vertex Pharmaceuticals (NASDAQ: VRTX) and why you should add these exciting and inspiring stocks to your watch list.
And lest you think this is some silly exercise in throwing names to the wind, hoping something happens to stick, you're welcome to tune in a year, two years, and three years from now to find out exactly how the stocks in this sampler have done since this recommendation. We have a feeling they'll have done pretty well, and the world will be better for it.
A full transcript follows the video.
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This video was recorded on April 3, 2019.
David Gardner: Most financial podcasts that talk about stocks probably don't pick them, formally pick them, to beat the market, pick them for three years or more. A lot of people will talk about stocks but may not walk. Now, I'm not trying to call anyone out. The truth is, I don't listen to many financial podcasts, pretty much just Motley Fool ones. So I'll be the first to say that I only suspect -- you can let me know otherwise -- that most financial podcasts do not pick stocks over specific, defined periods, score them, talk about the score, good or bad, and then revisit them a year or two or three later. Most, I'm just betting, do not. This one does, about every 10 episodes, and we have a pretty great record of beating the market with them, which is, after all, the heart of Rule Breaker Investing, is it not? Sure enough, it's that time of year again. This is the week for my latest five-stock sampler. Let's talk about, shall we, the age of miracles.
Welcome back to Rule Breaker Investing! Before you listen to the rest of this podcast, stop right away! Drop everything! Go back and listen to this Monday's Market Foolery! I wanted to lead off this week's podcast. I had so much fun listening to our Market Foolery podcast on April Fool's Day. Now, if you did hear it, you probably know that there are some jokes in there. In fact, the stocks are all made up and they refer not just to companies that don't exist but that in a sense once existed. Companies like eMeringue, for really longtime Motley Fool fans, you'll remember we invented those companies as April Fool's jokes years ago. They were our way of making points about not buying into overhyped IPOs, eMeringue.com. Not the pie, not the crust, just the meringue part, delivered anywhere domestically overnight. A converted auto parts business, that was an example of a company that we made up to teach people not to buy silly IPOs.
Chris Hill, Jason Moser, and Taylor Muckerman took some of our great jokes of the past and they updated and refreshed the stories. They presented it tongue in cheek, straight up. They never broke the mold. They didn't let you know it's a joke at the end. Straight up, Monday's 4/1 Market Foolery. That was the pleasure of my week.
All right, you back? Oh, good. I'm glad you enjoyed that Market Foolery April Fools podcast. Now you're back to listen to this one, which I hope will also be a pleasure, a joy, for your week. Yep, we're going to pick some stocks this particular podcast. I'm excited to share with you a little bit of my thinking about the theme this week, and then, of course, the companies themselves.
I've used this phrase on and off for the last three to five years, the age of miracles. That's really, I think, the age that you are presently living in. I'm not even talking about a future age. I'm talking about an age in which a disease like hepatitis C can be flat-out cured by a for-profit public company -- in this case, Gilead Sciences. Though it's expensive, and always will be an expensive treatment, at the same time, it saves so much expense for those who had hepatitis C, who would have had it for the rest of their lives. So, yes, small miracles and greater miracles are happening almost every day if you look hard enough in our world.
Now, I realize a lot of people tend to look at negative headlines and they talk about how hard it is politically in the United States of America today, or other aspects. You pick whatever you like. If it bleeds, it leads. So often the media is looking for the negativity. And yet as investors, and as an investor personally myself, I have been hugely rewarded for 26-plus years now, since we started The Motley Fool 26 years ago, by not looking for the negativity but the positivity. For finding the best stocks and the best stories, the best news services and products, things like lululemon athletica, when all of a sudden yoga became a thing and you could become a part owner of Lululemon, which has been such a great stock. Or how about Netflix when it began to pop up more than a decade ago? And, "That's going to be the future, isn't it? Better entertainment that you can watch on demand." And look at what Netflix has provided. So products and services that truly make our world better every day may not get the headlines. In fact, when I really think about headlines for Netflix, the time that Netflix hit the headlines the hardest in the last 10 years was when they made their big mistake with Qwikster, as you may remember, especially if you were a Netflix subscriber or still are. You'll remember that Reed Hastings was intending to split the DVD rental business from the online streaming business. That dismayed a lot of potential customers. The stock got crushed. Hastings, who'd been CEO of the year, according to Fortune or Forbes the year before, all of a sudden became the most vilified CEO on the planet for a good few months of really bad headlines before Netflix got smarter and changed its decision, and the rest is history. But my main point, of course, is that we're living during an incredible time of innovation across all aspects of your life and mine.
The focus of this week and our theme is specifically on medicine and medical-related stocks. William Gibson, I've quoted this before on the podcast, the sci-fi writer, has a great line. He said, "The future is already here. It's just not evenly distributed." And what he meant by that is that, well, I guess the best analogy I can think of is, imagine somebody driving a Tesla a few years ago. That person in my mind was driving in the future. The whole world, I think, is going electric with its cars. Almost every major brand these days is announcing, if they don't already have one, they're going to have one by the year 2021 or 2022. It seems like everybody's coming out with their electric car now. But those who saw Tesla years ago, whether as consumers or even better, in this case, investors, I think you were already living the future. It just wasn't evenly distributed. Not everybody even knew that such a thing as an electric car could be. And even if you'd heard something about the possibility of electric cars and the idea of no engine and no emissions, and really only a single fluid -- which is true today of many electric cars, the only fluid in those cars today is just the windshield wiper fluid. Think about that. Such a simpler world, even if you knew it at the time, you may not have had access to a Tesla. It's been an expensive car. It still is, in many ways, today. Even if you didn't buy one, you had a friend, maybe, who you could have ridden along with. But many people didn't. Many people didn't even have the experience of being in the car. And then we can go on YouTube and watch videos of people taking their Tesla from 0 to 60 in two seconds. So you could have gained awareness. But much of the world years ago didn't really understand Tesla.
And that's just Tesla. There's so many examples of that today. Again, our focus this week is on medical companies and the age of miracles. Let me give you a couple of examples of past picks. These are not going to be picked on this week's show. That's coming very soon. But two quick examples.
Back in the year 2005, I started hearing about robotic surgery. That sounded like a fanciful phrase at the time. The future was already with us back then, it just wasn't evenly distributed. Many people didn't have the ability to be operated on by a robotic surgery machine. They had a human hand cutting them apart. They didn't know that they could go minimally invasive. They didn't know that they could get off of a hospital bed the day after that surgery as opposed to waiting for days later, expensive hospital days later, to be healed and whole again. The da Vinci Surgical Robot had hit the market. As a public company, Intuitive Surgical, ISRG, it fit a lot of the Rule Breaker traits that I talk about every week on this podcast. I recommended the stock. It's been one of my very best investments. I think it's up 38 times in value for Rule Breakers members since that time. And yet these days, the da Vinci is not just used for prostatectomy, the removal of the prostate gland in males, but it's used for hysterectomies and many other increasing numbers of surgeries. And it's high precision, much better than the human hand. The machine eye can see microscopically in a way that a surgeon's eye cannot. And the outcomes have been outstanding and just keep spreading into more and more hospitals as technology improves surgery. The future was already there in 2005. It just wasn't evenly distributed.
Now, if you were a member of Motley Fool Rule Breakers -- and really, who wants to be operated on for surgery -- but even if you didn't have the "pleasure" of having had a da Vinci robotic surgery, you knew about the company, you knew about the stock, because you were an investor, and you were a Rule Breaker. So you knew about it years ahead of when it went mainstream.
That was also true in 2010 when I recommended to Motley Fool Stock Advisor Gilead Sciences, the aforementioned company, which has cured hepatitis C. A company that's made tens of billions of dollars, has been mostly a great stock. I now see it's up about 4 times since we recommended it nine years ago. The market over that time is up 3 times. Gilead hasn't been the outstanding performer that Intuitive Surgical has been. But that was for me another age-of-miracles moment, when Gilead Sciences helped cure hepatitis C.
That was all the past. Now let's talk about the future. The future is already here. It's just not evenly distributed. But knowledge about it is going to be a little bit better distributed, because I'm picking stocks within that theme this week. Many of these companies you may have heard of. A few you may never have heard of. If you're a Motley Fool Rule Breakers or Motley Fool Stock Advisor member, you might already own one or more of these stocks. All that matters now is not how they did last year, though we'll talk about that. All that matters now with this five-stock sampler is how they do over the next three-plus years.
In this age of miracles, I'm looking for companies that have the capability of creating a miracle in this world, curing something or causing new possibilities to come into play that were never possible in human history up until now, or next year or five years after that. This five-stock sampler, we're taking more risk than usual. Not everybody's biotechnology cure gets approved by the FDA. Not every one is even efficacious. And when they're not, they don't get approved. So there's always extra risk when we're talking about an age of miracles sleeve of stocks. But we don't shy away from risk here on Rule Breaker Investing, we embrace it. Each of these five companies, which is an actively recommended stock in Motley Fool Rule Breakers or Motley Fool Stock Advisor, is going to form this five-stock sampler that I tie up in a bundle, hand it to you, and say, "Let's try to beat the market with these stocks over the next three-plus years."
Before we get started, I'm going to issue a few disclaimers. This is not the standard disclaimer that you might hear in financial advertising. I'm not about to say past performance is no guarantee of future returns or anything like that. Nope. These are just simple disclaimers from me. I have three of them for you.
First of all, are these my newest favorite stocks? Are these the stocks I just picked this month in Rule Breakers or will pick next month in Stock Advisor? The answer is no. These are all existing active recommendations. I like them just as much today over the next three-plus years. But these aren't our newest or best ideas necessarily in Rule Breakers or Stock Advisor.
Disclaimer No. 2. Are these my best buys now? Every month in Rule Breakers and Stock Advisor, in addition to the new pick or picks that I make for you, I also go back and look at the existing stable of active recommendations and I say, of those, of all of those dozens of stocks, which five do I like right now over the next three-plus years? We call those our best buys now. Are any of these five our best buys now this month? Disclaimer answer: No. No, they are not. Maybe they would be next month. I'm not even sure, I haven't decided that yet. I want to make it clear, these are neither my best ideas nor my best buys right now.
The final disclaimer, No. 3, is: am I a medical professional? Do I have any personal experience in gene therapy? I think you know the answer to both of those is no. I don't even play a doctor on TV. I'm just an English major. I'm a humanities person who, over the course of 30 years or so, has built up my own approach to investing. I love picking stocks that are in high technologies that often I myself can't fully wrap my brain around, whether it's cloud computing back in the day or even today, right through to the biotechnology we'll talk about some this episode. So please know, I think you know this about me, I'm not shy about going out and picking a stock like Intuitive Surgical, even if I'm not a surgeon, or don't work in the industry. I'm not shy about that because I'm looking for the Rule Breaker traits that I look for in all companies. That's what causes me to pick stocks. But I'm not afraid to admit when I don't know some aspects of technology, in this case, medical and biotechnology. I do have some experts I can draw on. We have some wonderful resources here at The Motley Fool. Human resources, people like Karl Thiel, who appeared on last week's podcast talking a little bit about investing in biotech. If you didn't get to hear that mailbag, I encourage you to listen right to the top of the show. Karl is part of the dream team we led off with. But I have a lot of help here at The Motley Fool, of course, from all my excellent analysts, helping me and our teams pick the best stocks we can for you. So those are my three disclaimers.
Now, before we go on, if you find yourself interested in getting started investing the Rule Breaker way, or maybe start a friend at the office or a family member whom you think can invest better, truly invest, we would love to have the whole world join us at Motley Fool Rule Breakers. If everyone joins, don't you think that's a better world? I sure do. To start yourself or a friend on the adventure of a lifetime, our investing journey, here's the URL: joinrb.fool.com. That's right. Become a Rule Breaker. joinrb.fool.com.
All right, five stocks. For each of these, I'm going to give you two things that I like about the company and why I'm picking the stock, and then one thing to watch. As usual, we will do these alphabetically by company name.
Let's lead it all off with company No. 1: Amgen. Amgen is one of the oldest biotechnology companies in the world. It's been public since the 1980s. I picked this stock back in our old Rule Breaker portfolio. For those who remember our AOL days and early days free at fool.com, Amgen was in the so-called Fool Port, Fool Portfolio, or Rule Breaker portfolio. It was a great company I took a shine to back then. Incredibly profitable, doing good things in this world. From that portfolio, early days, fast forward now through to today when Amgen, AMGN, is the seventh-largest pharmaceutical company in the world.
Now, when did I pick this stock for Stock Advisor? Well, just last summer. Casting around for what stock to pick during a hot summer, I was probably getting ready for the beach, and I thought, "What's an easy company?" I might have mailed it in a little bit that month. "What's an easy company for me to add to Motley Fool Stock Advisor and to our members portfolios," those who wanted to buy Amgen. Happy to say the stock's up 5% since. Somewhat sad to say the market itself is up 5% since, so Amgen has just been a market performer, not a market-beater, measured over that very short time frame of last June. By any meaningful long-term measure, Amgen has been a big-time winner. I expect that'll be true over the next meaningful long term, like the next 10 years.
What do I like about Amgen? No. 1: I like that it's the seventh-largest pharmaceutical company in the world. A lot of people, when they think about the age of miracles, they think about biotechnology, they think they have to go for a small company that's placing a big bet, and if it can just get through to the final stage of FDA review and get approved, you might make a ton of money. Now, we might have one company kind of like that in this sleeve, this five-stock sampler, this week. But Amgen is not that company. I like to remind people that a company like this, which has tens of billions of dollars on its balance sheet, this is a great place for a lot of biotech investors to start. So, just that sheer size for Amgen is the kind of thing that all of us should be seeking out, especially if we're going to buy our first age of miracles stock. This is a company with a dozen or more products focused not just on cancer, but, yes, and not just on inflammation or neurology, but, yes to both of those; cardiology as well. We're talking about a fully diversified worldwide leader, a great American company coming out of Thousand Oaks, California. This is a great company. I loved it back in the 1990s. Here we are, practically into the 2020s, and I'm still talking about Amgen, stock No. 1.
What's the second thing I like about it? How about a dividend? Yep, some of these companies actually pay dividends. Not many more of the ones we'll be covering this podcast. But Amgen pays a dividend right around 3%, maybe just short of 3%. What's a dividend? I know many of you already understand dividends, but I'm always trying to bring everybody into the fold here at Rule Breaker Investing. Just briefly, you should know that companies with a portion of their profits or their money pay that sometimes directly back out to shareholders. In a way, it's like the interest rate you get paid for holding a stock. So when I say the dividend yield is right around 3%, that means if you were to buy Amgen stock today and just hold it over the next year, and the stock stayed flat, you would still get paid on top of that 3% as a gift from the company itself, paying you a dividend to own its stock. Most of these companies that have a lot of money that can afford these dividends have a good possibility of increasing them over time. So Amgen is one of those companies. I'd like to double underline that because you don't necessarily expect that from age of miracles stocks. So those are two things that I like about Amgen, its sheer size and diversity, and of course, its dividend.
What's one thing to watch? Well, how about how much the company spends on research and development? This is a simple metric you can track not just for age-of-miracles companies but for many others in other sectors. Anytime you're dealing in emergent technologies, I like to see what portion of revenues, what portion of the top-line sales, is a company putting toward research and development? The Xerox PARC, the guys who blow stuff up and labs, things that don't always work, but sometimes pay off big? What portion of its sales does Amgen spend on research and development from one year to the next? I'm happy to say it's right around 15% recently and historically. That is an outstanding measure.
Now, especially in emergent medical and biotechnology as a field, you're going to expect to see higher R&D. If you were to see that percentage start to decline over time, that's a sign that a company may be running out of ideas or feeling pressed for profits and not being willing to spend as much on testing and learning. That's the number you'd like to focus on not just for Amgen but for really any company in emerging technology. So I'm flagging that one as something to look for for Amgen. 15% of sales, that's over $3 billion for this company. That's larger than many companies' revenues, and that's how much Amgen spends each year on R&D.
Stock No. 2: bluebird bio, BLUE. If you ever check their website or their branding, you'll see it's one of those companies that decided not to use capital letters for its name. It's going all lowercase with Bluebird Bio. That might endear it to some of you. It kind of suggests some humility or a little bit of right-brain thinking on the part of at least the branding people at Bluebird Bio. I kind of like it! It's distinctive.
Amgen, which I just presented to you, has a market cap -- which I know you know, we've made a game show of here on this podcast, so this is important -- Amgen's market cap is around $120 billion or so, a little bit over that right now. Bluebird Bio, by contrast, has a market cap of $9 billion. I'll mention that for each of the companies so you have a sense of their size. Bluebird Bio is less than one-tenth the size or value of a behemoth like Amgen. Yet, still, $9 billion isn't bad for a relatively recent company that is probably the main representative of gene therapy among all of my stock selections in Rule Breakers and Stock Advisor.
I first picked Bluebird Bio in January of 2015. It was at $95 then. By June of 2017, two and a half years later, it was at $109. I decided I'd rerecommend it again. It'd gone from $95 to $109. Today, it's $161. I really am glad that the future was already there. It just wasn't evenly distributed. We took advantage of our knowledge and appreciation of the potential of gene therapy, and certainly Bluebird Bio in its own way, early stage, has been cashing in on some of that potential. It's been a winning stock. It's one of those where we recommended it, it goes up, we recommend to buy some more, that goes up. That describes -- I know you know this -- how we approach investing generally as Rule Breakers.
Two things I like about Bluebird Bio. The first is, as I just mentioned, it's the main representative of gene therapy among all of my selections. This company is very focused on gene therapy. Now, I don't want to toss around a phrase like that and not have everybody come along with me in terms of their understanding. I know some of you are working in gene therapy, and know it about 73X better than I do. For those who don't understand what the phrase means, it is the therapeutic delivery of nucleic acid -- that's kind of what makes up your DNA -- it's the therapeutic delivery of nucleic acid into a patient's cells as a drug to treat disease. Basically, we're altering the genetic makeup of people in order to cure them. Now, of course, any powerful technology like this can be used for good or for evil. It's kind of like the internet. There are people doing bad things on the internet. But I personally think, take it all in all, the internet has been a completely Awesome development for all of us over the last 30 years.
Quick note to self. I listened to our mailbag episode last week, and I decided that I said "awesome" too much. I think I over-rely on that word. I'll try not to use it. I just used it. I'll try not to use it again this podcast.
All right, now back to Bluebird Bio. Altering your genetic makeup. What does Bluebird Bio focused on? It's looking at severe genetic and rare diseases. It's trying to introduce a technology that can get better DNA into you to cure you of that disease.
Thing No. 2 that I like about Bluebird Bio, it is very focused on CAR-T immuno-oncology. Now, this isn't the only company in our stable that has a focus on CAR-T. As I do this podcast on YouTube, as a visual, you can all see that I'm about to give you what that stands for without looking at my notes to show that I have actually embodied this in my head now: chimeric antigen receptor therapy. That therapy has been a fairly miraculous recent development. As it turns out, you can take blood out of you or me, improve it, process it, put it back in us, and start to help with some forms of cancer. President Jimmy Carter has benefited from this. There's some other higher-profile people who've been fully cured, or at least cancer's gone into deep remission so far as we can tell through this chimeric antigen receptor technology. We're talking about a company that uses your own immune system, your T cells, to fight back against a cancer that you might have in you. And yes, Bluebird Bio is focused right there with a lot of its efforts. That's another thing that I like. In an age where cancer immunotherapy looks like not just the next big thing but a significantly big thing right now that's going to get bigger, I really like Bluebird Bio's positioning.
What's one thing to watch with BLUE? Well, here's a fun one. This company does not even have an entry on Wikipedia. I can look up almost any company that I've recommended on any of my portfolios, even lesser-known companies, and they've got a Wikipedia entry. But Bluebird Bio... let's keep watching. At some point, someone's going to start a page for Bluebird Bio on Wikipedia. But this is a $9 billion company that apparently is under the radar still, enough that nobody has even thought to create a Wikipedia page for Bluebird Bio. So, there's something to watch.
Now, of course, I'm having fun with that, but it does suggest to me that the future is already here, but awareness of it is clearly not being very evenly distributed. I think, just as I first recommended the stock more than four years ago, and it's been a big winner for us, I think it's still early stages for a company like this. We'll see.
All right, stock No. 3. From a $120 billion company to a $9 billion company, now let's go to a sub-$2 billion company, Editas Medicine, ticker EDIT. Editas Medicine is capitalized at $1.2 billion as I tape this podcast on Tuesday, April 2nd, what I like to call the day after April Fool's Day each year. Editas has been a fascinating company and a stock to follow. I first recommended it about a year and a half ago. It was September 2017. The stock was at $20. It was exciting to watch it go from $20 up to $45. Six months later. Yep, that was last March. Right around this time, it had more than doubled. In the meantime, though, it came all the way back down. In fact, it briefly dropped below $20 before settling back to where it trades this week around $26. So yeah, this is a volatile stock. It is a small-cap. You could even say a micro-cap, especially within the world of medicine and medical technology.
Two things that I like about Editas Medicine. The first is, this is an early-stage leader in an important new technology. Please read about it. I know some of you know this better than I do, but it's called CRISPR. If you don't know what CRISPR is, just google it. You can read more about it on Editas' website, for example. And it does have a Wikipedia entry as a $1 billion company. This is an early leader in basically another approach to gene therapy, an efficient and highly effective way to go in and snip, snip, edit out a bad gene and put in a better one. In contrast to cancer immunotherapy, which is a little bit more mature today, even though it's still early days, CRISPR technology is way earlier than that. This is an example of the kind of stock that could blow up in the lab, blow up in our faces when we review this a year or two or three years from now. It's only a $1 billion company, and it's not even the only company purposed toward CRISPR.
But CRISPR is its own technology. Again, read more about it. You're going to see that if it works, it has the potential to really, again, effectively get there and edit just that one gene that needs to be taken out in order to cure you of this or make you better at that. By including "make you better at that," I open up the Pandora's box of possibilities of what this technology could do. Probably not every biotechnologist on Earth from now into the future will be just trying to correct severe genetic problems. No doubt some of them will be bad players that are trying to, in some way, make the genes theirs or those connected to them better or worse. This is a powerful technology.
It might not even work, by the way. CRISPR is still more the stuff of test tubes and laboratories than for-profit cash flow dynamics. But if the promise comes true, we are going to unleash on this earth, in the age of miracles, new possibilities in addition to new cures. People are going to have mixed feelings about that. I mean, if I could give you a better memory right now, and I could just give you a shot, and as a consequence, you would triple your memory capacity, would you take that shot? If you wouldn't, would you allow me to take that shot? I might be like, "Yeah, I sure would like to have a much better memory." So, there are, of course, moral, ethical implications to all of these things. The conversations have already started, and they'll probably never end.
My prediction is that this technology will be used for good. It will be used for augmentation beyond just curing. And that will lead to a better world, in fact, one that sounds a little bit like The Motley Fool's purpose to me -- a smarter, happier, and a richer world. We shall see. Whether or not Editas Medicine even brings that to you and me as a micro-cap company in the space with some early competition is not clear. Certainly not clear to me, it shouldn't be clear to you unless you are working with this technology. I know some of our Rule Breaker and Stock Advisor members are, in fact, because you've written me and let me know that you're working within this space. It's fascinating. I congratulate you on how exciting it is. So that's one thing I certainly like about Editas.
A second thing that I like about this, and I'm going to talk about this in the context of our five-stock sampler, a second thing I like about Editas is, it's our flyer stock. Out of these five, this is the one that's a really small market cap that has a really big dream. In my experience, these don't pay off the majority of the time. But if and when they do, they can be spectacular. It's probably a rare chance that Editas ends up being a $100 billion company. It has the potential. But in my experience, more often than not, that doesn't happen. Sometimes you do get a great stock; it's just not that great. Or you get a company that gets bought out by another larger company, as the big fish starts eating the guppies, the guppies with higher R&D budgets, really good technology and talented engineers, but a bigger fish comes along and takes a liking to it, so you don't get to enjoy the full benefits of a company like this. We'll see. But, second thing I like here, I like that we're including a stock like this in our sleeve, in our five-stock sampler.
Well, what's one thing to watch for when you're thinking about Editas Medicine, if you're considering adding it to your portfolio and following the company? CRISPR. Keep an eye on that technology. If this is the first time that you're hearing that phrase, you should know it's an acronym. I can't actually produce for you the six letters that make up the acronym, but I'll tell you it's spelled CRISPR. This is the last podcast that's going to be giving you deep knowledge about CRISPR. We're staying at a high level here with this company, this stock pick. But I'll say this. Like I didn't know that much about robotic surgery when I first picked Intuitive Surgical in 2005, and I know more -- I'm still not in the field, but I know more. In fact, I've been in an operating room since and spent time with the surgeon and used the machine briefly myself. Maybe I'll have some analog-like opportunity in CRISPR in the future. When we're talking about what to watch with this one, you're going to want to watch the technology of CRISPR itself, see whether it works or not, see how the world feels about it and whether it's adopted. That's the obvious thing to look for for Editas Medicine.
Stock No. 4. We started with A, Amgen. We moved to B, Bluebird Bio. Then E, Editas Medicine. Let's go to the letter I for company No. 4: Illumina, ILMN. Illumina is basically a worldwide leader in the business of DNA sequences and DNA sequencing, which I will explain in a sec. But first, let me mention, what is the size of the market cap of this company today? Well, the answer is $46 billion as we tape. We're talking about a very substantial, mid- to verging on large-cap company, and, as I say, a leader at what it does.
I first picked the stock in July of 2008, more than 10 years ago. Back then, it was at $43. Today it's at $316. That's pretty great! It's a seven-bagger, up 630%. Now, you might wonder, well, how has the stock market done? That was an interesting month, July 2008. The market was getting mangled, and it was about to get worse. Well, the stock market has been really great over the last 11 years or so. It's up 180%. But when you own a stock that's up 630%, well, your hundreds of points of alpha ahead of where most academics, it seems to me, think that you should be as an investor because too much of the world continues to believe -- here's a dark cloud I can see through -- too much of the world continues to believe that you really couldn't beat the market averages in any kind of dependable way by picking individual stocks. Illumina, yet another case against the status quo. Those of you who've been with me in Illumina since 2008, good job! We are crushing the market!
I'm the first to say it's not about looking back. If this is the feeling you're getting, you're thinking, "I missed this stock. He picked it $43. It's $316 today." Pause for a sec and say this aloud with me. We're about to say, "It doesn't matter what already happened. David likes it today." Ready, set, go! It doesn't matter what already happened. David likes it today. I hope you do, too.
Why should you like Illumina? Well, two reasons I can see. First of all, they are a clear leader in DNA sequencing. Now, even a humanities person like me remembers that there are those four bases, A, G, C, and T. Adenine, guanine, cytosine, and thymine. Those four letters make up the building block that is you. They're strung together in sequences, seemingly random orders. But as it turns out, those orders are highly consequential to everything about you -- how you look, how long you're going to live, what are your strengths and weaknesses, the list goes on. Guess who is powering services like 23andMe, which I know some of you have tried, where you have your own DNA sequenced? The answer is, it's really Illumina's machines that most frequently, going back to the days of the Human Genome Project, their sequencers are used to sequence your DNA.
I myself have tried 23andMe. I recommend it to you if you haven't already. I've even done it twice because there was an early stage of 23andMe that I paid maybe $500 for. Then, a few years later, they said, "We've now improved it. Would you like to do it again?" And I said, "Yes." I think I paid less. Which by the way, is one of the keys to this business we'll talk about in a little while. It's getting cheaper and cheaper to sequence DNA. I love being invested, not here in a company creating biotechnology or taking risks to develop cures. This is one of those picks-and-shovels companies. They are sequencing all the DNA that companies like Bluebird Bio and Editas are using to try to figure out how to help you and me. Illumina is safeguard against decisions made by the FDA. They are just powering the world by sequencing all of your and my DNA. And yes, pretty sure in the next few decades, literally all of us will have had our DNA sequenced. Every last one of us on earth, and probably multiple times. So yes, Illumina is the company that is powering this revolution.
A second thing I like about Illumina. How about its sales growth, just in the last three years, from $2.2 billion to $3.3 billion? Yep. Up 50% in just three years. The company has accelerating sales growth as this gets more popular.
What's something to watch about Illumina? Well, it's tied into that point. Here's the thing to watch for Illumina. The CEO of the company has said this. "I believe we're going to get down to a $100 genome." The cost of sequencing yours or mine, the goal is within the coming years, just $100. You can see, like other things, Moore's Law powering a lot of this. Constant gains are being made in terms of the power and the speed and the technology of all the machines around us. These machines are no exception. The goal is to just get it cheaper and cheaper. As that data just spreads out, you can see why we at The Fool love cloud data businesses.
Amazon Web Services probably stores a ton of genetic sequencing information. There is a revolution happening, of course, in genomics. The future was already here a long time ago. It's not been evenly distributed. But by the end, it's going to be very evenly distributed. All of us will have had our DNA sequenced multiple times, and that'll help, well, all the rest of us. All right, that's stock No. 4, Illumina.
That brings me to my final stock of this five-stock age-of-miracles sampler. All the way down -- is this Sesame Street? -- to the letter V. Should that be the letter of the day this week on Rule Breaker Investing? The letter of the day is V. That's the first letter of the company Vertex Pharmaceuticals, VRTX. We've been playing the market cap game a little bit. We do a little bit every week on this podcast. You should know, how does Vertex Pharmaceuticals compare in size to a company like Amgen, or Illumina, just mentioned? The answer is, it's just about exactly the same size as Illumina. Vertex is a $48 billion company. I mentioned Illumina is a $46 billion company.
Illumina is the picks-and-shovels company powering the revolution. Vertex is one of those companies that's taking that data -- and in fact, it's tied into some of the other things we've talked about because CRISPR, if CRISPR worked in gene editing, that would also really help empower Vertex Pharmaceuticals. This is a company that is focused on cystic fibrosis. In fact, of all the companies that are public today, really Vertex owns cystic fibrosis.
Now, some of you may either have it or have friends or family members that may have cystic fibrosis. It is a genetic disease. It's one that affects the lungs, though it can also affect other organs inside us. What it does is it makes it hard for us to breathe over the course of time, more mucus, these kinds of difficulties. It's a really tough disease. The good news is, it's a genetic disease, which means it's curable, potentially. We'll see. Vertex has been working toward that and serving up one drug, getting FDA approval, after another, fighting cystic fibrosis, trying to make the world better for those sufferers. That's thing No. 1 that I like.
In an age of miracles, it comes one miracle at a time. When a company focuses or locks down on anything from diabetes to, in this case, cystic fibrosis or making surgery more effective for you, it's creating a better world. Vertex is absolutely doing that. That's something that you should know about this company.
You should also be really happy to know how well the stock has done. This is a stock I first picked in January of 2005 for Rule Breakers. It was at $10 a share back then. Today it's at $188. Those who were subscribed to Rule Breakers in 2005 and who've been patient and held it along with us, it's been active all the way, all 14 years and counting, up 17 times in value. Remember what we said earlier, though? It doesn't matter what already happened with the stock. Dave likes it today going forward. That's all that really matters for this five-stock sampler. So, yes, I really like Vertex going forward. No. 1, it is that focus on something that's a real-world solution. It would be really powerful if a little miracle here could be created by Vertex in the years ahead.
The second thing that I like about Vertex is its sales growth. I just shared with you Illumina growing its sales 50% in the last three years, which is really good for any company, especially a large company like Illumina, doing valuable work. Well, how about Vertex's sales growth in the last three years? It's tripled, in fact, since 2015. Still only has about $3 billion in sales today. So it's really ramping now. Years after we first bought this stock and just patiently held it, finally, the businesses ramping. It's been a tremendous performer. But all that matters is what's happening next. So sales growth counts for a lot.
Now, what's something to watch for with Vertex? Well, here's the blessing and the curse. For anybody who knows Gilead Sciences, and its story around hepatitis C, where it's hugely rewarded for curing it, but then once you cure a disease, where's the business come from next? That's a dynamic that could take hold with Vertex. That's because cystic fibrosis is brought about by the mutation of a single gene. Now, my friend Karl Thiel reminds me that it's very different, the mutations across a population. But this, take it all in all, comes down to those who have it to a single gene. So there is the potential that gene therapy or gene editing could cure -- in fact, I predict, surely, one day it probably will cure -- cystic fibrosis. But in the meantime, we're not holding our breath. This is not something that's going to happen overnight. Vertex is likely to own any such cure if and when it comes Vertex itself. We'll see.
Of course, everything about an age of miracles is speculative. We're talking about fanciful things that we hope might happen one day. We've seen in the past, these kinds of things can happen. We don't know whether it will work for Vertex and cystic fibrosis in this case, or really, for any of the stocks in this five-stock sampler.
In conclusion, there you go. Five age-of-miracles stocks for you. Of course, there are a lot more than just these in our services. Who knows, maybe these won't be the best ones. A stock that I may have picked last year or next year in Rule Breakers might outperform all of these. I won't be the one to know. I do know this, though. We buy these stocks to own them. In owning them, we hold them, and we let them win or lose. We tend not to sell too early for these kinds of companies. You heard some of the performance of these stocks, mostly winners for us over the last year or decade. So you can see, playing out live in front of you, how we've done with this form of investing and these kinds of companies. Let's keep our fingers crossed for this five-stock sampler as we review it in the years ahead.
Well, now speaking not of the years ahead, but simply the week ahead. Next week on Rule Breaker Investing, a horse of a different color. I'm going to welcome back my approximately once-a-year guests, my annual friends, Lee Burbage and Kara Chambers, who oversee culture and people here at The Motley Fool. Once a year, I've had them on for a special podcast where they share what we're trying culturally here at The Fool, share it out to you, that you could use in your organization. You might be an entrepreneur of a small business. You might be an impact player in a larger corporation. If you're a leader with the ability to shape culture, it might even be some of your family culture. I'd like to think some of these business lessons work outside of just business. I think you're really going to enjoy, once again, Lee and Kara. I've asked them to focus on where we break the rules within The Motley Fool's culture, specifically what we're learning here in the last year or two. We won't be talking about old-school Fool here. We'll be looking at actual tests and learnings that we're getting from trying different things to make our employees' lives smarter, happier, and richer here at The Motley Fool. Lee and Kara are warming up their top 10 list to share with you and your organization on this podcast next week.
In the meantime, I hope you benefit from a miracle or two in the week ahead, or a medical miracle or two in the decade or two ahead. Let's invest in that together! Fool on!
As always, people on this program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. Learn more about Rule Breaker Investing at rbi.fool.com.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. David Gardner owns shares of Amazon, Editas Medicine, Intuitive Surgical, Netflix, and Tesla. The Motley Fool owns shares of and recommends Amazon, Bluebird Bio, Editas Medicine, Gilead Sciences, Illumina, Intuitive Surgical, Netflix, and Tesla. The Motley Fool recommends Amgen, Lululemon Athletica, and Vertex Pharmaceuticals. The Motley Fool has a disclosure policy.