Illumina Led IBB’s Large-Cap Portfolio



Large-cap stocks underperformed

The iShares Nasdaq Biotechnology ETF’s (IBB) large-cap stocks gave a return of -0.55% as of November 4, 2015. They underperformed IBB and the SPDR S&P 500 ETF (SPY). They gave returns of -0.45%, and -0.3%, respectively.

As of November 4, 2015, IBB’s large-cap stocks consisted of 15 stocks that have a market cap above $10 billion. The combined weight of these stocks stood at 69.5% of IBB’s portfolio. Out of the 15 large-cap stocks, ten stocks ended up with negative returns. Only five stocks ended with positive returns. IBB’s large-cap stocks include Mylan (MYL), Incyte (INCY), and Celgene (CELG). They gave returns of 0.05%, -2.4, and 0.50%, respectively.

The above graph shows the performance of IBB’s large-cap stocks compared to IBB and SPY. Since October 26, 2015, IBB’s large-cap stocks have given an average return of 6.5%. IBB has given a return of 6.6%. SPY has given a return of 1.4%.

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Illumina leads large-cap stocks with 4.1%

Illumina (ILMN) rose 4.1% on November 4, 2015. It rose on the news of the share repurchase. According to the press release, Illumina announced that “its Board of Directors has authorized the company to repurchase, on a discretionary basis, up to $250 million of its outstanding common shares in the open market or in privately negotiated transactions, subject to market conditions and other factors. The company also announced the completion of the existing discretionary authorization of $96 million that was repurchased since the company reported earnings on October 20th.”

Illumina closed at $159.06. It was trading well below the 50-day and 100-day moving averages. Illumina’s YTD (year-to-date) returns stood at -13.9%. With its current market price, the stock is trading at a PBV (price-to-book value) ratio of 12.02x compared to the industry average of 9.65x. Illumina has a weight of 3.6% in IBB’s portfolio.


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