December brings the start of winter, but it's also a time for spring cleaning for many investors. As the end of the year draws near, investors look closely at which stocks to throw out of their portfolios. And they look for new stocks to buy as well.

One of the best stocks to buy in December is gene sequencing pioneer Illumina (ILMN 0.38%). The stock has delivered a year-to-date gain of close to 50%. More importantly, though, Illumina's growth prospects continue to look very good. Here are three terrific reasons to buy Illumina before the new year arrives.

Magnifying glass showing DNA helix

Image source: Getty Images.

1. A long-read sequencing bet that should pay off nicely

Illumina announced on Nov. 2 that it plans to acquire Pacific Biosciences of California (PACB -5.11%), often referred to as PacBio, for $1.2 billion. Some might have scratched their heads about the buyout, considering that PacBio reported deteriorating financial results on the same day the acquisition was announced. 

However, Illumina CFO Sam Samad said at the Evercore ISI healthcare conference on Nov. 28 that the long-read sequencing technology provides "important complementary benefits" to Illumina's short-read sequencing approach. The current market for long-read sequencing is only around $700 million. But Samad said that the market could grow to $2.5 billion within the next five years -- a compound annual growth rate of around 30%. 

Why is Illumina buying PacBio instead of privately held Oxford Nanopore? Samad said that Illumina has been closely watching long-read technology for a while. Illumina thinks that PacBio brings impressive progress in improving accuracy and lowering costs. Samad acknowledged that Oxford Nanopore has improved to some extent and is an important player in the market, but it still isn't close to delivering the level of accuracy that PacBio can.

2. The consumer genomics market is exploding

Don't worry that Illumina reported lower revenue from the direct-to-consumer (DTC) genomics market in Q3. Those third-quarter results reflected a blip due to the impact of seasonality for Illumina's consumer genomics customers like Ancestry and 23andMe. But the Christmas holiday should significantly boost sales for these customers -- and for Illumina.

More notable, though, is that the consumer genomics market is enjoying rapid overall growth. Samad noted in his comments at the Evercore ISI conference that interest in genealogy in the U.S. has been the primary growth driver for consumer genomics so far but that could change.

Illumina spinoff Helix and some of its peers now offer consumer genomics apps that focus not just on genealogy but also address lifestyle and health areas. 23andMe won Food and Drug Administration approval to provide reports to consumers that help them determine how their genetic makeup could affect how they respond to certain medications. Samad also pointed to new consumer genomics markets outside of the U.S., including Australia, China, and South Korea, that could fuel growth for Illumina.  

3. It's still early for NovaSeq

NovaSeq has been the gift that keeps on giving for Illumina. The company launched the gene sequencing system last year with the goal of "democratizing access to sequencing." NovaSeq appears to be delivering on that goal, propelling the highest sequencing systems sales in three years for Illumina in the most recent quarter and contributing to strong consumables revenue growth. 

The key thing for investors to know, however, is that it's still really early for NovaSeq. Samad said that "very few customers have upgraded completely" to the new system, although plenty of existing customers have bought NovaSeq systems. Illumina continues to expect a multiyear upgrade cycle, which means there's plenty of growth to come.

But the biggest promise for NovaSeq is expanding the customer base by lowering the cost of sequencing. That's already happened to some degree. As the architecture for NovaSeq evolves, though, Illumina thinks that it can reduce the cost of sequencing a human genome from around $1,000 to $100. Achieving this objective should open up a massive new market opportunity for Illumina.   

And a couple of wild cards, too

In addition to these three compelling reasons to buy Illumina, there are a couple of wild cards that could be just as significant.

One is the possibility that liquid biopsies are developed that can identify cancer at an early stage. Samad noted that "good progress" has been made by Illumina spinoff GRAIL and others toward this goal. He said that liquid biopsies present "a lot of potential for growth" for Illumina since there's "no better platform than NovaSeq" for handling the necessary sequencing.  

Samad also made an intriguing reference to the possibility that Illumina could make "transformative investments" in the future. And he wasn't talking about the PacBio deal.

Samad hinted that Illumina could make moves that "could catalyze the market." As you might expect, he didn't provide any details. But using words like "transformative" and "catalyze" could indicate that even bigger acquisitions could be in Illumina's future -- and perhaps more terrific reasons to buy this high-flying stock.