| Stock (Symbol) | Stock Price | |
Gilead Sciences (GILD) |
$115 |
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| Data is as of | Expected to Report | Sector |
August 7, 2015 |
Oct 26 – Oct 30 |
Healthcare |
| Sharek’s Take | ||
 Gilead Sciences (GILD) whipped profit estimates for the 2nd straight qtr, powered by its hepatitis C and HIV drugs. I keep asking what’s GILD got next, as these franchises are solid but might not give much EPS growth going forward. But the company continues to deliver sales that are much higher than analyst estimates (10% higher last qtr). What’s been dogging this stock is Gilead’s hepatitis drug cures patients, so eventually that market could dry up. And although GILD doesn’t have another blockbuster on the horizon, Gilead is one of the 30 largest by market cap in the Value Line universe (I did not know that) and has the cash and power to do a big acquisition. At just 10x earnings, the stock is inexpensive, and that makes it safe in a time where the stock market is teetering on a correction. Management also just initiated a dividend of $1.72 annually and is buying back tens-of-billions in stock. |
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| One-Year Chart | ||
 I really considered selling this stock when profit growth slowed, and I’m glad I didn’t. Stock is right around its All-Time high. The P/E of 10 is cheap compared to the Est. LTG of 17% but I don’t think GILD can grow that fast. Unless it acquires another company that possesses a blockbuster drug. |
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| Earnings Table | ||
 Gilead had 26% revenue growth last qtr (impressive) and profits increased 33%.GILD crushed profit estimates — the 2nd straight qtr it did so. This no-doubt helped the stock.Annual Profit Estimates continue to climb higher. Quarterly profit growth looks to slow, but that’s been the case for a while now, but the company continues to up and beat. |
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| Fair Value | ||
 With the hepatitis drug curing many patients, there’s a chance profits could fall in the near future. So GILD isn’t getting a high P/E. Still, 12x earnings would be fair, and that gives the stock 20% upside to its Fair Value. |
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| Ten-Year Chart | ||
 Tremendous growth the past ten years, but there was a long period when the company didn’t grow profits, and the stock price didn’t go up, so I wouldn’t characterize this as a buy-and-hold investment. |
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| Power Ranking | Bottom Line | |
Growth Portfolio
18 of 26 |
Gilead Sciences continues to deliver beyond expectations, and has a lot of free cash flow to buy back stock, pay dividends, and possibly acquire another drug company. At 10x earnings it’s a good value, but the company will have to develop or buy another blockbuster to make a big move higher. GILD is ranked 18th of 26 stocks in the Growth Portfolio Power Rankings, It is not a good stock for the Aggressive Growth Portfolio. |
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Aggressive Growth Portfolio
N/A |
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