Seeking Alpha
Long/short equity, insider ownership
Profile| Send Message|
( followers)  

Summary

  • Nine insiders sold Illumina stock within one month.
  • The stock was not purchased by any insiders in the month of intensive selling.
  • Two of these nine insiders decreased their holdings by more than 10%.

Illumina (NASDAQ:ILMN) develops, manufactures, and markets life science tools and integrated systems for the analysis of genetic variation and biological function in North America, Europe, Latin America, the Asia-Pacific, the Middle East, and South Africa.

(click to enlarge)

Insider selling during the last 30 days

Here is a table of Illumina's insider activity during the last 30 days.

NameTitleTrade DateShares SoldRule 10b5-1Current OwnershipDecrease In Ownership
Jay FlatleyCEOMarch 13-2760,000Yes381,262 shares + 570,000 options5.9%
Daniel BradburyDirectorMarch 6-194,200Yes9,924 shares + 8,800 options18.3%
Nicholas NaclerioSVPMarch 172,000Yes23,146 shares + 78,000 options1.9%
Gerald MoellerDirectorMarch 1710,000Yes14,620 shares + 18,000 options23.5%
Marc StapleyCFOMarch 141,422Yes21,996 shares + 72,517 options1.5%
David WaltDirectorMarch 109,400No970,048 shares1.0%
Christian HenryCCOMarch 113,000Yes28,519 shares9.5%
Michel BouchardCAOMarch 112,168Yes25,049 shares8.0%
Mostafa RonaghiCTOMarch 610,000Yes28,604 shares + 120,000 options6.3%

There have been 102,190 shares sold by insiders during the last 30 days. Jay Flatley, Daniel Bradbury, Nicholas Naclerio, Gerald Moeller, Marc Stapley, Christian Henry, Michel Bouchard, and Mostafa Ronaghi sold shares pursuant to the Rule 10b5-1 plan. More details about the Rule 10b5-1 trading plan can be found from this link.

Insider selling by calendar month

Here is a table of Illumina's insider activity by calendar month.

MonthInsider selling / sharesInsider buying / shares
March 2014102,1900
February 2014111,7130
January 2014104,0380
December 201370,6630
November 201366,8750
October 2013124,4500
September 2013146,1640
August 201366,0000
July 2013357,1340
June 2013204,0680
May 2013179,1960
April 2013244,3970
March 201326,6010
February 201310,0000
January 2013100,5000

There have been 1,913,989 shares sold, and there have been zero shares purchased by insiders since January 2013.

Financials

Illumina reported the full-year 2013 financial results on January 28 with the following highlights:

Revenue$1.4 billion
GAAP net income$125.3 million
Cash$1.2 billion
Debt$868.6 million

The nine insiders sold their shares after these results.

Outlook

Illumina's 2014 guidance is as follows:

Revenue growth15%-17%
Non-GAAP EPS$2.00-$2.06

Competition

Illumina's competitors include Affymetrix (NASDAQ:AFFX), Thermo Fisher Scientific (NYSE:TMO), and Luminex (NASDAQ:LMNX). Here is a table comparing these companies.

CompanyILMNAFFXTMOLMNX
Market Cap:18.21B482.00M46.43B748.83M
Employees:3,0001,10050,000731
Qtrly Rev Growth (yoy):0.250.100.06-0.01
Revenue:1.42B330.40M13.09B213.42M
Gross Margin:0.680.550.420.68
EBITDA:377.23M26.44M2.79B25.66M
Operating Margin:0.20-0.020.140.05
Net Income:125.31M-16.33M1.28B7.10M
EPS:0.90-0.233.480.17
P/E:157.80N/A34.01104.94
PEG (5-yr expected):3.803.681.181.37
P/S:12.901.513.523.57

Illumina has the highest P/S ratio among these four companies.

Here is a table of these competitors' insider activities this year.

CompanyInsider buying / sharesInsider selling / shares
AFFX00
TMO0517,467
LMNX00

Thermo Fisher Scientific has also seen intensive insider selling during the last 30 days.

Financials

There have been nine different insiders selling Illumina, and there have not been any insiders buying Illumina during the last 30 days. Two of these nine insiders decreased their holdings by more than 10%. Illumina has an insider ownership of 1.30%.

Illumina has a $132 price target from the Point & Figure chart. I believe there is an opportunity for a short entry with the $132 price target. I would place a stop loss at $183, which is the all-time high. The three main reasons for the proposed short entry are a bearish Point & Figure chart, relatively high P/S ratio, and the intensive insider-selling activity.

(click to enlarge)

Source: Illumina: 9 Different Insiders Have Sold Shares This Month