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Weaker Guidance Dragged Illumina (ILMN) in Q3

RiverPark Advisors, an investment advisory firm and sponsor of the RiverPark family of mutual funds, released its “RiverPark Large Growth Fund” third quarter 2023 investor letter. A copy of the same can be downloaded here. In the third quarter, markets performed poorly, and the S&P 500 index (“S&P”) and the Russell 1000 Growth Index (RLG) declined -3.27% and -3.13%, respectively and Institutional Class (RPX) declined -4.11%. Year to date, RPX has returned 26.59% compared to the SPX and the RLG’s 13.07% and 24.98% returns, respectively. In addition, please check the fund’s top five holdings to know its best picks in 2023.

RiverPark Advisors highlighted stocks like Illumina, Inc. (NASDAQ:ILMN) in the third quarter 2023 investor letter. Headquartered in San Diego, California, Illumina, Inc. (NASDAQ:ILMN) is a life science tools and integrated systems manufacturer. On November 16, 2023, Illumina, Inc. (NASDAQ:ILMN) stock closed at $95.20 per share. One-month return of Illumina, Inc. (NASDAQ:ILMN) was -20.43%, and its shares lost 56.84% of their value over the last 52 weeks. Illumina, Inc. (NASDAQ:ILMN) has a market capitalization of $15.118 billion.

RiverPark Advisors made the following comment about Illumina, Inc. (NASDAQ:ILMN) in its Q3 2023 investor letter:

"Illumina, Inc. (NASDAQ:ILMN): Illumina was a top detractor in the quarter in reaction to weaker than expected guidance for the remainder of 2023 due to slowing end customer demand for the consumables used by the company’s machines. In addition, the announcement that Jacob Thaysen, formerly a Senior Vice President at Agilent and President of the Life Sciences and Applied Markets Group, would take over as CEO was not well-received. Despite stellar qualifications, some investors had hope for an internal promotion to fill the vacated CEO seat. As for the guide-down, despite strong system sales (the company now expects to place 390 systems up from the prior expectation of 330), consumables were negatively impacted by instrument transition issues (customer upgrades from Nova 6000 to NovaSeq X) and general weakness in China.

We continue to view the company’s core genomics industry as offering one of the larger total addressable markets that we cover, and ILMN is the clear innovation leader in sequencing and array-based solutions for genetic analysis. With less than 0.02% of humans having been sequenced and 99% of the variants discovered in the genome having not yet been deciphered, Illumina, at less than $5 billion of TTM revenue, is still in its infancy in what is potentially a greater than $50 billion genetics analysis tools market opportunity. We are cautiously optimistic that EU regulators’ push to force Illumina to divest Grail will lead to much higher core earnings and/or a big valuation for Grail in a sale."

A research facility with medical professionals surrounded by diagnostic equipment.

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Illumina, Inc. (NASDAQ:ILMN) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 43 hedge fund portfolios held Illumina, Inc. (NASDAQ:ILMN) at the end of second quarter which was 44 in the previous quarter.

We discussed Illumina, Inc. (NASDAQ:ILMN) in another article and shared worried about the deficit Stan Druckenmiller is still very bullish on these stocks. In addition, please check out our hedge fund investor letters Q3 2023 page for more investor letters from hedge funds and other leading investors.

 

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Disclosure: None. This article is originally published at Insider Monkey.