Why Illumina (ILMN) Stock is a Compelling Investment Case

Bonsai Partners recently released its Q3 2020 Investor Letter, a copy of which you can download here. The fund posted a return of 63.3% for the quarter (net of fees), outperforming their benchmark, the S&P 500 Index which returned 8.9% in the same quarter. You should check out Bonsai Partners’ top 5 stock picks for investors to buy right now, which could be the biggest winners of this year.

In the said letter, Bonsai Partners highlighted a few stocks and Illumina Inc. (NASDAQ:ILMN) is one of them. Illumina Inc. (NASDAQ:ILMN) is a biotechnology. Year-to-date, Illumina Inc. (NASDAQ:ILMN) stock lost 2.5% and on October 23rd it had a closing price of $323.55. Here is what Bonsai Partners said:

“Illumina is the leading provider of genomic sequencing instruments and reagents.

Illumina shares declined -17% during the quarter. Shares traded lower based on analyst downgrades following cautious guidance from management on their most recent earnings call. The investment thesis remains in-tact and I’m not concerned by the short-term sales difficulties caused by closed labs and constrained research budgets. Eventually, these issues should correct themselves.”

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Bonsai Partners has been betting on Illumina Inc. (NASDAQ:ILMN) stock for a long time. In August, we published an article revealing investment firms bullish investment thesis on Illumina.

In Q1 2020, the number of bullish hedge fund positions on Illumina Inc. (NASDAQ:ILMN) stock decreased by about 21% from the previous quarter (see the chart here), so a number of other hedge fund managers don’t believe in Illumina’s growth potential. Our calculations showed that Illumina Inc. (NASDAQ:ILMN) isn’t ranked among the 30 most popular stocks among hedge funds.

The top 10 stocks among hedge funds returned 185% since the end of 2014 and outperformed the S&P 500 Index ETFs by more than 109 percentage points. We know it sounds unbelievable. You have been dismissing our articles about top hedge fund stocks mostly because you were fed biased information by other media outlets about hedge funds’ poor performance. You could have doubled the size of your nest egg by investing in the top hedge fund stocks instead of dumb S&P 500 ETFs. Below you can watch our video about the top 5 hedge fund stocks right now. All of these stocks had positive returns in 2020.

Video: Top 5 Stocks Among Hedge Funds

At Insider Monkey we scour multiple sources to uncover the next great investment idea. For example, Federal Reserve has been creating trillions of dollars electronically to keep the interest rates near zero. We believe this will lead to inflation and boost real estate prices. So, we recommended this real estate stock to our monthly premium newsletter subscribers. We go through lists like the 10 most profitable companies in the world to pick the best large-cap stocks to buy. Even though we recommend positions in only a tiny fraction of the companies we analyze, we check out as many stocks as we can. We read hedge fund investor letters and listen to stock pitches at hedge fund conferences. You can subscribe to our free enewsletter below to receive our stories in your inbox:

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