Illumina: 9 Different Insiders Have Sold Shares This Month

Jun.30.14 | About: Illumina, Inc. (ILMN)

Summary

9 insiders sold Illumina stock within one month.

The stock was not purchased by any insiders in the month of intensive selling.

2 of these 9 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.

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Insider selling during the last 30 days

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

Name Title Trade Date Shares Sold Option Exercise & Sale Rule 10b5-1 Current Ownership Decrease In Ownership
Charles Dadswell SVP June 27 192 No Yes 42,749
shares
0.4%
Daniel Bradbury Director June 12-27 4,200 Yes Yes 12,466
shares + 47,600 options
6.5%
Jay Flatley CEO June 12-26 60,000 Yes Yes 387,262 shares + 1,212,812
options
3.6%
Christian Henry CCO June 16-24 30,000 Yes Yes 28,519
shares + 102,833 options
18.6%
Marc Stapley CFO June 16 1,422 Yes Yes 21,996
shares + 9,954 options
4.3%
Nicholas Naclerio SVP June 2-16 62,000 Yes Yes 23,146
shares + 68,250 options
40.4%
Mostafa Ronaghi CTO June 2 10,000 Yes Yes 28,604
shares + 144,000 options
5.5%
Karin Eastham Director June 2 6,000 Yes Yes 9,826
shares + 62,700 options
7.6%
Michel Bouchard CAO June 2 1,491 Yes & No Yes 24,190
shares + 5,050 options
4.9%
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There have been 175,305 shares sold by insiders during the last 30 days. All these shares were sold pursuant to a 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.

Month Insider selling / shares Insider buying / shares
June 2014 175,305 0
May 2014 84,353 0
April 2014 79,132 0
March 2014 102,486 0
February 2014 111,713 0
January 2014 104,038 0
December 2013 70,663 0
November 2013 66,875 0
October 2013 124,450 0
September 2013 146,164 0
August 2013 66,000 0
July 2013 357,134 0
June 2013 204,068 0
May 2013 179,196 0
April 2013 244,397 0
March 2013 26,601 0
February 2013 10,000 0
January 2013 100,500 0
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There have been 2,253,075 shares sold and there have been zero shares purchased by insiders since January 2013. The month of June has seen the most insider selling this year.

Financials

Illumina reported the first-quarter financial results on April 22 with the following highlights:

Revenue $420.8 million
GAAP net income $60.0 million
Cash $1.1 billion
Debt $848.0 million
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The nine insiders sold their shares after these results.

Outlook

Illumina's 2014 guidance is as follows:

Revenue growth 21%-23%
Non-GAAP EPS $2.10-$2.15
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Competition

Illumina's competitors include Thermo Fisher Scientific (NYSE:TMO), and Agilent Technologies (NYSE:A). Here is a table comparing these companies.

Company ILMN TMO A
Market Cap: 22.17B 47.19B 19.16B
Employees: 3,000 50,000 20,900
Qtrly Rev Growth (yoy): 0.27 0.22 -0.00
Revenue: 1.51B 13.80B 6.78B
Gross Margin: 0.69 0.43 0.52
EBITDA: 415.65M 2.98B 1.34B
Operating Margin: 0.21 0.14 0.14
Net Income: 207.87M 1.48B 713.00M
EPS: 1.42 3.95 2.11
P/E: 121.45 29.96 27.21
PEG (5 yr expected): 4.16 1.36 2.04
P/S: 14.53 3.45 2.84
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Illumina has the highest P/S ratio among these three companies.

Here is a table of these competitors' insider activities during the last 30 days.

Company Insider buying / shares Insider selling / shares
TMO 0 810
A 0 113,507
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Only Illumina has seen intensive insider selling during the last 30 days.

Conclusion

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 1.34%.

Before going short Illumina, I would like to get a bearish confirmation from the Point & Figure chart. The three main reasons for the proposed short entry are a relatively high P/S ratio, high P/E ratio, and the intensive insider-selling activity.

Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.