| Stock (Symbol) | Stock Price | |
Gilead Sciences (GILD) |
$84 |
|
| Data is as of | Expected to Report | Sector |
February 28, 2014 |
Apr 28 – May 02 |
Healthcare |
| Sharek’s Take | ||
 As I mentioned last quarter, the FDA has approved Gilead’s hepatitis C drug Sovaldi and the drug will be a blockbuster for the company with sales of perhaps $2 billion next year and $8 billion in 2018. Investors with insight have already pushed up GILD stock from $45 to $85 during the last year, but the outlook is still very bright. Gilead’s profits are expected to climb from $2 last year to $7 in 2016. My guess is GILD stock can double in price during the next two years. Biotech stocks have been red-hot this year — with some now too-high-to-buy — but this stock has the power to continue higher and my calculations show it will double in two years. |
||
| One-Year Chart | ||
|
|
||
| Earnings Table | ||
 Sales growth accelerated to 21% LstQtr, up from 15% 2QtrsAgo as Solvaldi was launched. Profit growth was only 10%, but that doesn’t matter, let’s look ahead.GILD beat the street by 5 cents but I’m curious to see if the company can whip estimates next quarter as it will have Solvaldi the entire length.Annual Profit Estimates got a big boost this quarter, this will surely keep the stock hot for the next quarter. 2014’s estimate has jumped 20% since December. Quarterly profit growth looks exceptional for the next four quarters and should grab GILD stock some headlines when these profits roll in. |
||
| Fair Value | ||
 I definitely think GILD is worth 30 times earnings — probably more now that I see annual estimates popped higher last qtr. This stock has 36% upside to it’s 2014 Fair Value and I think it should double by 2015. |
||
| Ten-Year Chart | ||
 GILD has gone on a parabolic move during the last two years. Normally this would be characterized as a dangerous pattern that leads to a stock crash. But GILD has strong profit growth coming. If the company makes $7 in 2016 it’s selling for 12 times those future earnings. |
||
| Power Ranking | Bottom Line | |
Growth Portfolio
8 of 27 |
Gilead Sciences is on track to deliver explosive profit growth and at 22 times earnings this stock is the best value in the red-hot Biotech space. Sovaldi is going to be a blockbuster and these new drugs can sometimes deliver sales much higher than expectations as analysts often can’t get a good read on how much doctors will prescribe. GILD is raked 8th in the Growth Portfolio and Aggressive Growth Portfolio Power Rankings. Internet stocks and Chinese Internet stocks are on fire and therefore higher. |
|
Aggressive Growth Portfolio
8 of 12 |
||
Wow, this stock sells for only 