Baron Funds, an asset management firm, published its “Baron Opportunity Fund” first quarter 2022 investor letter – a copy of which can be downloaded here. Baron Opportunity Fund (the “Fund”) fell sharply and significantly lagged the broader market during the first quarter. For the period, the Fund dropped 16.02% (Institutional Shares), trailing the Russell 3000 Growth Index, which fell 9.25%, and the S&P 500 Index, which declined 4.60%. Try to spend some time looking at the fund’s top 5 holdings to be informed about their best picks for 2022.
In its Q1 2022 investor letter, Baron Opportunity Fund mentioned Illumina, Inc. (NASDAQ:ILMN) and explained its insights for the company. Founded in 1998, Illumina, Inc. (NASDAQ:ILMN) is a San Diego, California-based biotechnology company with a $30.5 billion market capitalization. Illumina, Inc. (NASDAQ:ILMN) delivered a -48.92% return since the beginning of the year, while its 12-month returns are down by -57.02%. The stock closed at $194.31 per share on June 13, 2022.
Here is what Baron Opportunity Fund has to say about Illumina, Inc. (NASDAQ:ILMN) in its Q1 2022 investor letter:
“We added to our Illumina, Inc. (NASDAQ:ILMN) position in the quarter. Illumina is the market-leading provider of next-generation DNA sequencing instruments and consumables to academic and clinical laboratories, genomic research centers, hospitals, and biopharmaceutical companies around the world. Customers use the company’s products for genetic analysis. For example, the company’s DNA sequencing platform has been used throughout the COVID pandemic to sequence the genomes of the SARS-CoV-2 virus and its variants, which has been critical to the development of vaccines, therapeutics, and diagnostics. We have been long-standing investors in Illumina based on the thesis that Illumina is a platform technology company with a dominant competitive position in a large and expanding market. During the quarter, the stock was under pressure because of investor concerns about increased competition and uncertainty about the ongoing legal proceedings and European Commission’s merger review related to Illumina’s acquisition of Grail, a company that sells a multi-cancer early detection blood test. We saw this as an opportunity to add to our investment. We think Illumina has attractive growth ahead of it driven by the adoption of its platform in clinical applications, most notably in oncology, where Illumina’s platform is being used across the patient journey in cancer care (therapy selection, recurrence monitoring, and early detection). While we acknowledge the competitive efforts of emerging players and have never projected that Illumina would have 100% market share, we believe Illumina will continue to innovate and remain dominant, particularly in the fastest growing markets, biopharmaceutical and clinical, where the barriers to entry are high and where Illumina is entrenched. Moreover, we think there is a reasonable likelihood that the litigation regarding the Grail acquisition will be resolved favorably for Illumina, resulting in a substantial new market opportunity for Illumina in the blood-based early cancer detection market.”
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Our calculations show that Illumina, Inc. (NASDAQ:ILMN) fell short and didn’t make it on our list of the 30 Most Popular Stocks Among Hedge Funds. Illumina, Inc. (NASDAQ:ILMN) was in 54 hedge fund portfolios at the end of the first quarter of 2022, compared to 53 funds in the previous quarter. Illumina, Inc. (NASDAQ:ILMN) delivered a -36.52% return in the past 3 months.
In April 2022, we also shared another hedge fund’s views on Illumina, Inc. (NASDAQ:ILMN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q1 page.
Disclosure: None. This article is originally published at Insider Monkey.
