Illumina, Inc. (ILMN): Hedge Fund Ownership Half What It Was Last Year

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Illumina, Inc. (NASDAQ:ILMN) shares didn’t see a lot of action during the third quarter. Overall, hedge fund sentiment was unchanged. The stock was in 28 hedge funds’ portfolios at the end of the third quarter of 2016. At the end of this article we will also compare ILMN to other stocks including Wisconsin Energy Corporation (NYSE:WEC), SunTrust Banks, Inc. (NYSE:STI), and Campbell Soup Company (NYSE:CPB) to get a better sense of its popularity.

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How have hedgies been trading Illumina, Inc. (NASDAQ:ILMN)?

Heading into the fourth quarter of 2016, a total of 28 of the hedge funds tracked by Insider Monkey were bullish on this stock, unchanged from the previous quarter. That leaves ownership of the stock well off where it was five quarters ago, when 62 hedge funds in our system owned its shares. With hedgies’ positions undergoing their usual ebb and flow, there exists a few notable hedge fund managers who were increasing their stakes considerably (or already accumulated large positions).

According to Insider Monkey’s hedge fund database, Philippe Laffont’s Coatue Management has the most valuable position in Illumina, Inc. (NASDAQ:ILMN), worth close to $100.3 million, accounting for 1.2% of its total 13F portfolio. Sitting at the No. 2 spot is Samuel Isaly of OrbiMed Advisors, with a $90 million position; 1% of its 13F portfolio is allocated to the stock. Remaining hedge funds and institutional investors that are bullish contain Phill Gross and Robert Atchinson’s Adage Capital Management, Paul Marshall and Ian Wace’s Marshall Wace LLP and Dmitry Balyasny’s Balyasny Asset Management.

Because Illumina, Inc. (NASDAQ:ILMN) has witnessed falling interest from the aggregate hedge fund industry, it’s safe to say that there is a sect of hedgies who sold off their full holdings heading into Q4. Intriguingly, Ken Griffin’s Citadel Investment Group dumped the biggest position of the 700 funds monitored by Insider Monkey, totaling an estimated $14.3 million in stock. John M. Angelo and Michael L. Gordon’s fund, Angelo Gordon & Co, also dumped its stock, about $5.1 million worth. These bearish behaviors are intriguing to say the least, as total hedge fund interest stayed the same (this is a bearish signal in our experience).

Let’s also examine hedge fund activity in other stocks similar to Illumina, Inc. (NASDAQ:ILMN). These stocks are Wisconsin Energy Corporation (NYSE:WEC), SunTrust Banks, Inc. (NYSE:STI), Campbell Soup Company (NYSE:CPB), and TE Connectivity Ltd. (NYSE:TEL). This group of stocks’ market valuations resemble ILMN’s market valuation.

As you can see these stocks had an average of 25.25 hedge funds with bullish positions and the average amount invested in these stocks was $489 million. That figure was $433 million in ILMN’s case. SunTrust Banks, Inc. (NYSE:STI) is the most popular stock in this table. On the other hand Wisconsin Energy Corporation (NYSE:WEC) is the least popular one with only 20 bullish hedge fund positions. Illumina, Inc. (NASDAQ:ILMN) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. In this regard STI might be a better candidate to consider for a long position.

Disclosure: None