Despite having studied hundreds of guru managers and their positions over the years, I still stumble across a trade or investment every now and then that prompts a verbal “Whoa!” out of me.

#-ad_banner-#Billion-dollar positions are not out of the ordinary for successful hedge fund managers, especially those managers — like Andreas Halvorsen of Viking Global — who are looking for places to stuff $24 billion in assets under management. However, when those positions are built in just a few months’ time, I sit up and take note.

Halvorsen, a former commando in the Norwegian navy, is one of the most successful of the so-called Tiger Cubs, proteges of legendary investor Julian Robertson. As an example of his stock-picking prowess, his newest fund, Viking Long, gained nearly 40% in 2013.

After accumulating 5.5% of the outstanding shares of biotech firm Illumina (Nasdaq: ILMN), Viking Global filed a Form 13G in March that showed it owned 7.1 million shares at that time, more than quadruple its 1.7 million-share position at the end of last year. 

With the release of his first-quarter Form 13F in mid-May, we can now see that Halvorsen has continued to add to his position, with 8.9 million shares as of March 31, worth $1.3 billion, up from $188 million the previous quarter.

So what does Viking Global see in this biotech stock? Let’s take a look at the basics.

San Diego-based Illumina develops tools to perform genetic tests, helping to extract and interpret medical information in the areas of DNA profiling, sequencing and genotyping, among others. Focusing its efforts on molecular medicine, Illumina’s innovations have exciting implications in the world of drug discovery and so-called designer pharmaceuticals.

Viking’s recent attraction to ILMN could stem from one of Illumina’s newest offerings, a human genome sequencing product known as HiSeq X Ten. Illumina says this sequencer is both significantly faster and more cost-effective than any of its predecessors. In fact, the company says a mere 40 of these machines could sequence more genomes in a single year than have ever been sequenced to date.

To put that into perspective, the Human Genome Project revealed that there are roughly 20,000 protein-coding genes. It took nearly 20 years and about $500 million to decode that first sequence — but Illumina says HiSeq X Ten could sequence the same number of genomes in a single year at a cost of only $20 million.

With these innovations in mind, ILMN has doubled in the past 12 months, gaining nearly 30% in 2014 alone, even amid a recent pullback. Other investors are seeing ILMN’s upside as well, as the stock saw a significant drop in short interest last month.

ILMN Short Interest data by YCharts

How does the rest of the Street feel about ILMN? The stock has seen a rash of upgrades recently, with sell-side analysts pushing up both ratings and price targets. Maxim Group propped up ILMN from “hold” to “buy” in late April with a $205 target. Around that same time, analysts at Bank of America released positive sentiments as well, reiterating the stock as a “buy” and predicting a value of $195.

Most recently, Zacks upgraded Illumina to a “strong buy,” its highest rating. The bump was given after ILMN reported consensus-beating earnings in April. One of the main reasons for the upgrade centered around increased demand for HiSeq X Ten, prompting improved guidance for 2014.

Risks to Consider: The most glaring issue I have with ILMN is its sky-high trailing price-to-earnings (P/E) ratio of 105. While high P/E’s are the norm in biotech as many companies struggle to post any earnings at all and investors put weight on future high hopes, Illumina’s ratio is quite a few degrees more pronounced, given its strong run-up lately. Also, the stock has cooled a bit recently, pulling back from February highs and consolidating sideways since.

Action to Take –> Halvorsen’s conviction in ILMN caused some massive shifts in his top holdings this past quarter. Those looking to beef up their biotech holdings should consider this high-flier, especially during the recent pullback in biotech. If the stock makes its way back to the highs it reached in February, investors could lock in a 20% gain from current levels — and Maxim’s price target represents 30% upside.