Illumina (ILMN)

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Illumina (NASDAQ:ILMN) is the global leader in sequencing- and array-based technologies for genetic analysis, serving customers in a wide range of markets, enabling the adoption of genomic solutions in research and clinical settings. Customers include leading genomic research centers, academic institutions, government laboratories, and hospitals, as well as pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic laboratories, and consumer genomics companies. Its portfolio of integrated systems, consumables, and analysis tools is designed to accelerate and simplify genetic analysis. This portfolio addresses the range of genomic complexity, price points, and throughput, enabling customers to select the best solution for their research or clinical challenge.

The stock price has had a substantial run since the end of 2016 and has been reaching new highs above the $200 level recently as shown in the chart below. Considering Illumina’s IPO price of $8 in 2000 (split-adjusted) the stock is well into exponential territory.

finviz dynamic chart for  ILMN

The company also meets EGI’s financial requirements to be part of an EGI portfolio, healthy revenues and EPS growth and positive and increasing operating cash flow:

– 5-Year Revenue CAGR of 18%
– 5-Year Non-GAAP EPS CAGR of 21%
– Operating cash flow last year: $687M (up from $659M in 2015)

The introduction of the NovaSeq system has been very successful with more than 230 orders to date surpassing expectations by 30%. Healthy growth is expected to continue.

However the opportunity for much higher growth is still ahead.  Illumina is already moving into clinical applications: cancer, noninvasive pregnancy testing (NIPT)—in other words, much larger markets. Sequencing could also power other medical applications such as genomic profiling to identify people at risk of diseases, improve diagnostic and provide the right treatment.

Given the above ILMN should and will be a solid stock in any growth portfolio.

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