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Technology Stocks : Investing in Exponential Growth

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From: Paul H. Christiansen	10/17/2016 3:31:54 PM
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Illumina Stock Price Says Buy Me Now! Illumina stock (NASDAQ:ILMN) represents a picks and shovels play on some of the most exciting disruptive technologies we discuss here on Nanalyze like genetic testing, synthetic biology, gene editing, and pretty much each and every technology theme that involves analyzing genes. That isn’t even the most compelling reason to want to invest in Illumina. We’ve talked before about their exciting venture called Helix which will be the world’s largest next-generation sequencing lab and which will serve as a neutral platform for other companies to build applications on. We also talked about their other venture called Grail, a universal blood test to identify early-stage cancers in people with no symptoms of the disease. If ILMN can’t eek some organic growth from either of those ventures, maybe they can go dip into the $1.3 billion in cash they have on hand to make some acquisitions. There is a lot to like about Illumina stock from where we sit. So why is the U.S. market opening shortly with ILMN down -26% in pre-market trading to $135 per share? The reason for this is (presumably) that ILMN issued guidance that revenues for Q3-2016 were coming in at $607 million which represents a year-over-year increase of only +10%. All those pundits out there who seem to know everything about the stock market yet still have to go work at a job every morning, thought that this number should be more around the range of $625 to $630 million. This means that all the analysts refreshed their stock valuation spreadsheets that they learned how to build during their MBA programs, and then promptly decided to sell the isht out of the stock. Does that change in guidance really merit a -26% drop in the stock price? Who cares. This is a buying opportunity with an indefinite holding time frame and this is as good a time to buy Illumina stock as any. ILMN has historically been a very volatile stock so be prepared to stomach more volatility along the way. This is a stock that has returned +700% over the past 10 years and is off their all time high of almost $240 per share. If you think Illumina stock will fall even lower, accumulate your position over 3 weeks while buying a 3rd at a time (also called dollar cost averaging). It is already quite low though as it’s only 6% above the 52-week low of $127.10 per share. nanalyze.com

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