| Stock (Symbol) | Stock Price | |
Gilead Sciences (GILD) |
$114 |
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| Data is as of | Expected to Report | Sector |
June 5, 2015 |
Jul 21 – Jul 27 |
Healthcare |
| Sharek’s Take | ||
 Gilead Sciences beat profit estimates by 68 cents last qtr, had its Annual Profit Estimates increased, and this combination sent shares to al All-Time high. Everyone is waiting for GILD’s sales growth to stall. Sales were $10-$11 billion two-three years ago, then jumped to $25 billion last year and now look to be $30 billion this year and also next year. Growth is expecting to downshift next qtr, so its good the stock can hit a new high in the face of this headwind. What helped GILD beat the street is the company’s hepatitis drug Harvoni had $3.5 billion in sales, blowing past the $3 billion estimate and, up from $2 billion the qtr earlier. Management is doing good with its strong cash flow issuing a new dividend and stock buyback program that should reduce the share count by 10%. To me we are riding out this late-stage move, as profit growth might slow for a while until Gilead can come upt with another blockbuster. At 11x earnings the stock is cheap and should be higher, but much of the solid profit growth is behind us. |
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| One-Year Chart | ||
 Great year for profit growth (bottom left 4 numbers) but that’s in the past now. Stock’s Est. LTG is only 13%, that’s not enough to keep it in the Growth Portfolio. P/E of 11 makes GILD cheap and a reason its been going higher. |
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| Earnings Table | ||
 Last qtr, sales growth was a robust 52% but down from 134% 2QtrsAgo. Profits jumped 99%.GILD crushed profit estimates, and that helped the stock. Annual Profit Estimates got an unexpected boost, but notice 2017’s estimate is barely more than 2015’s. Quarterly profit growth could be hard to come by after the third qtr. |
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| Fair Value | ||
 I feel the stock is worth at least 13x earnings, which would be $139 and gives the stock 22% upside to 2015’s Fair Value. Note 2016’s Fair Value isn’t much higher. If or when growth slows I have to decide to sit on this a while or move on. |
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| Ten-Year Chart | ||
 What GILD needs is another blockbuster in the wings, else it could see a repeat of the 2008-2013 period when profit’s didn’t grow much. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
23 of 23 |
Gilead Sciences had a good qtr, but is going from a growth stock to a value stock. Still, the trend is your friend and the trend of this stock is up. GILD has more than 20% upside to its Fair Value, if I get that 20% I may sell. GILD is ranked 23rd of 23 stocks in the Growth Portfolio Power Rankings, I’m just hanging around to see what happens. I sold it from Aggressive Growth Portfolio a while back. |
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Aggressive Growth Portfolio
N/A |
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