Illumina Stock Falls on GRAIL Acquisition Fail

Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market,” says Warren Buffet. That advice couldn’t be more applicable today as the bear market continues to hit new lows. To feel comfortable with your portfolio in the red, you need to invest in quality companies with conviction. As the market turns south, our focus has moved from “growth at all costs” to “survivability above all else.” A good management team should have made hay while the sun shined with a proposed pathway to profitability once the market turned south and capital raising becomes more difficult.

We find the right cadence for checking in with stocks we hold is about once a year. This helps remove the noise from quarterly results so that we can focus on longer-term trends or concerns. For Illumina (ILMN), some things we’re watching include:

  • The GRAIL acquisition
  • The long-read sequencing opportunity
  • The recent dip in revenue growth

Let’s start with the last bullet point first.

Is Illumina’s Growth Stalling?

Illumina’s share price has corrected significantly, falling 50% over the past rolling year compared to a Nasdaq decline of 27%. To put that fall into perspective, you’re now able to purchase shares for less than they were trading at seven years ago when revenues were half of what they are today.

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