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dasdasdasdadas
Long/short equity, insider ownership
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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.

(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 SoldOption Exercise & SaleRule 10b5-1Current OwnershipDecrease In Ownership
Charles DadswellSVPJune 27192NoYes42,749
shares
0.4%
Daniel BradburyDirectorJune 12-274,200YesYes12,466
shares + 47,600 options
6.5%
Jay FlatleyCEOJune 12-2660,000YesYes387,262 shares + 1,212,812
options
3.6%
Christian HenryCCOJune 16-2430,000YesYes28,519
shares + 102,833 options
18.6%
Marc StapleyCFOJune 161,422YesYes21,996
shares + 9,954 options
4.3%
Nicholas NaclerioSVPJune 2-1662,000YesYes23,146
shares + 68,250 options
40.4%
Mostafa RonaghiCTOJune 210,000YesYes28,604
shares + 144,000 options
5.5%
Karin EasthamDirectorJune 26,000YesYes9,826
shares + 62,700 options
7.6%
Michel BouchardCAOJune 21,491Yes & NoYes24,190
shares + 5,050 options
4.9%

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.

MonthInsider selling / sharesInsider buying / shares
June 2014175,3050
May 201484,3530
April 201479,1320
March 2014102,4860
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 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

The nine insiders sold their shares after these results.

Outlook

Illumina's 2014 guidance is as follows:

Revenue growth21%-23%
Non-GAAP EPS$2.10-$2.15

Competition

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

CompanyILMNTMOA
Market Cap:22.17B47.19B19.16B
Employees:3,00050,00020,900
Qtrly Rev Growth (yoy):0.270.22-0.00
Revenue:1.51B13.80B6.78B
Gross Margin:0.690.430.52
EBITDA:415.65M2.98B1.34B
Operating Margin:0.210.140.14
Net Income:207.87M1.48B713.00M
EPS:1.423.952.11
P/E:121.4529.9627.21
PEG (5 yr expected):4.161.362.04
P/S:14.533.452.84

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.

CompanyInsider buying / sharesInsider selling / shares
TMO0810
A0113,507

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.

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