Illumina (NASDAQ:ILMN) is changing our understanding of disease, and in the process it could reshape patient treatment. With over 7,500 of its gene-sequencing systems installed at customers, the company is already the leader in its industry, and with new systems about to launch, it could become even more dominant. Will the NovaSeq 5000 and NovaSeq 6000 cause sales and profit to accelerate?

In this clip from The Motley Fool's Industry Focus: Healthcare podcast, contributor Todd Campbell explains to analysts Gaby Lapera and Michael Douglass why this stock is one of his favorites. Will it be one of your top stocks, too?

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A full transcript follows the video.

This podcast was recorded on Feb. 8, 2017.

Todd Campbell: With hundreds of stocks to choose from, I had to set some sort of ground rules for myself, and coming up with an idea that I wanted to talk about today. So, what I did is I created in my head a hypothetical investor. And that hypothetical investor is someone who is maybe in their twenties, thirties, early forties. They have a 10-30 year time horizon for investing in the market. They're doing everything they should be doing as far as putting aside their income, 10% or more every year. And they want to also own individual stocks in a diversified portfolio that includes healthcare. So, that was step one: what would fit that hypothetical investor well?

The the second thing was, if I'm going to narrow down the list further, what is it about some of the greatest, best-returning, most revolutionary companies of the last 10 to 20 years? What common thread do they have? That would include stocks like Amazon, Google, Netflix, Priceline, truly disruptive companies that reshaped industries and quickly became leaders within their field. And that one common thread that they all share is that they put innovation first. They're innovation-first companies. Their goal is, consistently: disrupt, disrupt, disrupt. They are far less worried about what happens in one quarter to the next quarter to the next. They are looking long term, they're playing the long game.

So, when I thought about healthcare with that backdrop, the name that jumped to the forefront was Illumina. And I'll talk about why in a second, but I thought it might be fun first to play a quick game.

Gaby Lapera: OK, I'm ready.

Campbell: OK. Michael, are you ready?

Michael Douglass: Sure.

Campbell: Over or under -- are there over or under 50 million baby boomers in America?

Lapera: Over.

Douglass: Yeah.

Campbell: Yes. 76 million baby boomers. And guess what -- they're all living longer lives. So, we have this huge aging patient population in America. Next one, over or under -- there are over or under five billion people in the world?

Lapera: Over.

Douglass: Over.

Campbell: 7.5 billion people living in the world today. And there were 15 million people being born so far this year alone. So, in the first month and a couple weeks, 15 million new births. What do you think the global life expectancy is going to do, for all of these people over the course of the next 10-30 years? Is it going to get shorter, or is it going to get longer?

Douglass: Longer.

Lapera: Longer. Probably.

Campbell: Absolutely. So, we have this huge patient population that is growing and living longer. And that's going to create a tremendous amount of demand across the healthcare industry. That's one of the reasons that I feel that healthcare stocks should be part of a diversified portfolio.

So now, let's get into why I like Illumina. I mentioned that I liked innovation-first companies. Well, Illumina is now being run by a guy named Francis deSouza. And Francis, in his most recent conference call with investors, said, "At our core, and this has been true since the founding of the company, we are an innovation-driven company and we spend a lot of time thinking about the fundamental breakthroughs that will accelerate the adoption of genomics, and accelerate, as in our mission to improve, human health through unlocking the power of the genome." And the way that he and this company are going to do that is by developing increasingly more powerful genetic sequencing machines. They are going to allow researchers and drug developers to dive deeper and deeper and deeper into the understanding of how our bodies work. And in doing that, they're going to be able to unlock discoveries that will lead to new medicines that more accurately can treat individuals, and that can transform outcomes.

And that is at the crux of why I like Illumina as a long-term investment. They are the Goliath, the Amazon, of their industry in making genetic sequencing machines. They have more than 7,500 of these machines deployed throughout the world. And they just rolled out new machines this year -- the NovaSeq 5000 and NovaSeq 6000. These machines are faster, they're better, and they're likely to spark a major overhaul of all of those thousands of machines that are already deployed throughout the world. I think that could kick-start a significant amount of demand, and unleash a lot of genetic research that otherwise has not been conducted today because of its expense.

And the reason behind that -- I'm getting long-winded -- is that these machines put in place a pathway to reduce the cost of sequencing a genome from $1,000 today to eventually as little as $100. To put that in perspective, in 2010, it cost $10,000 to sequence genomes. So, as this price falls, we're likely to see far more research getting done, and that's likely to drive demand for the consumables that are used by these machines.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Gaby Lapera has no position in any stocks mentioned. Michael Douglass owns shares of GOOG, AMZN, and PCLN. Todd Campbell owns shares of AMZN. The Motley Fool owns shares of and recommends GOOGL, GOOG, AMZN, Illumina, NFLX, and PCLN. The Motley Fool has a disclosure policy.