Gene-sequencing stock Illumina (ILMN 2.74%) was a standout in the biotech sector Monday, with its share-price rise convincingly beating the S&P 500 index. Investors were cheered by a stock buy made by a high-profile insider. As a result, its shares closed the day almost 3% higher, while the bellwether index slid by almost 0.4%.
The CEO snapped up some shares
The insider doing the buying was none other than Illumina's CEO Jacob Thaysen. According to a regulatory document filed on Monday, Thaysen made three stock purchases the previous Thursday. All told, the CEO picked up 7,300 shares of the biotech at prices ranging from $134.91 to $137.18 apiece. That purchase more than doubled his holdings. According to the regulatory document, he now owns 14,861 shares.
None of these figures are immense when compared to Illumina's position on the stock market. At the moment, the biotech has nearly 159 million shares outstanding, and its market cap approaches $22 billion.
Regardless, investors are usually very encouraged when top management puts their own money into shares of a company. This indicates confidence in its future, as -- theoretically, anyway -- no sensible person would want to spend their cash on a business they know is in decline.
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Investors, keep your eye on the ball
Thaysen's purchase might be small, but the fact that he doubled down and then some on his position appears to be telling. An insider making only a token attempt at boosting morale through a stock purchase likely wouldn't increase their holdings so dramatically.
That being said, it's the fundamentals that always count for any company, in the biotech sector or elsewhere. This bit of news is surely encouraging, but what's more important for Illumina investors is how the company performs going forward.
