Those of you who follow my Navellier Family Trust newsletter will likely recognize the name. For everyone else, let me introduce…
Illumina Inc.‘s (ILMN) is a cutting edge company in the field of life sciences. Its tools are used by life sciences and drug researchers to isolate and analyze genes, helping to decode the human genome and make advances in gene identification. Its proprietary BeadArray technology uses microscopic glass beads, which can carry samples through the genotyping process.
Illumina’s products allow researchers to determine what genetic combinations are associated with various diseases, thereby enabling faster diagnoses, better drugs and individualized treatment. Illumina’s customers include pharmaceutical and biotechnology companies, research centers and academic institutions.
Looking ahead, there are several exciting developments on the horizon. Illumina is busy at work with its three part strategic plan: 1) To expand its reproductive health portfolio through its non-invasive prenatal test. 2) To broaden its oncology business by providing good infrastructural facilities and test guidelines for effective cancer genomics solutions. 3) To increase its reach in emerging markets, particularly China.
But why am I so eager to buy now? Well, just minutes ago we received confirmation that this is going to be a game changing year for the biotech. Just look at the details from its latest earnings announcement, hot off the press:
For the first quarter Illumina posted a profit of $60 million. This time last year, Illumina had recorded a loss of $23 million. Adjusted earnings were $0.53, which trounced the $0.44 consensus estimate by 20%! Meanwhile, the medical device company’s sales advanced 27% year-on-year to $421 million. Analysts expected sales of $391.76 million, so Illumina posted a 7.5% sales surprise.
And the best is yet to come, thanks to the developments I mentioned earlier. For FY 2014 Illumina’s management has hiked up its adjusted earnings guidance to a range of $2.10 to $2.15 per share, up from the previous outlook of $2.00 to $2.06 per share. This is well above the Street view of $2.05 per share.
After some of the recent choppiness that has impacted biotechs lately, this is exactly what the stock needed. Now that ILMN has proved itself during earnings season, I’m reiterating my Strong Buy recommendation.
This is already shaping up to be a great week for earnings, but there’s plenty more to come. So please stay tuned to this daily blog as I cover the latest headlines.