Stock (Symbol) |
Gilead Sciences (GILD) |
Stock Price |
$96 |
Sector |
| Healthcare |
Data is as of |
| January 9, 2016 |
Expected to Report |
| Feb 1 – 5 |
Company Description |
 Gilead Sciences, Inc. (Gilead), is a research-based biopharmaceutical company that discovers, develops and commercializes innovative medicines. The Company’s primary areas of focus include human immunodeficiency virus (HIV), liver diseases such as chronic hepatitis C virus (HCV) infection and chronic hepatitis B virus (HBV) infection, oncology and inflammation, and serious cardiovascular and respiratory conditions. The Company’s HIV products include Stribild, Complera/Eviplera, Atripla, Truvada, Viread, Emtriva, Tybost and Vitekta. Its Liver Diseases products include Harvoni, Sovaldi, Viread and Hepsera. Zydelig is the Company’s oncology product. Its Cardiovascular products include Letairis, Ranexa and Lexiscan/Rapiscan. Its Respiratory products include Cayston and Tamiflu. Its other products include AmBisome and Macugen. Source: Thomson Financial |
Sharek’s Take |
 Gilead Sciences (GILD) sells for just 8 times earnings, and is one of the best values in the stock market. Part of the reason for the lackluster stock performance is this large company doesn’t have another blockbuster drug in its pipeline, thus profit growth might be flat in 2016. Also, Gilead’s hepatitis drug cures patients, so eventually that market cold decline. But GILD has whipped earnings estimates the last 3 qtrs, as its hepatitis C and HIV drugs continue to see beyond expectations, so estimates have been rising. Gilead is one of the 30 largest by market cap in the Value Line universe and has a growing cash hoard in the billions to acquire a drug company, thus buying future earnings. Management also just initiated a dividend of $1.72 annually and is buying back tens-of-billions in stock. Yes, the near term future is foggy, but this management team has delivered stock growth of 20% annually the last ten years and I feel they will find a way. |
One Year Chart |
 Profit growth is expected to slow the next 4 qtrs, qtrly estimates are for +23%, +1%, -4% and -4% growth coming. But GILD has been crushing earnings estimates, so these numbers could be low. And honestly, for 8x earnings, can the stock get any cheaper? Seems like GILD is hitting support levels here. Nice estimated long-term growth rate of 14%. |
Fair Value |
 Analysts estimate profits to be in the $12 range from 2015 to 2017. But 4 qtrs ago they had a 2015 estimate of $9.55, and that was way low. My Fair Value on this stock is 11x earnings, or $133 a share. |
Bottom Line |
Gilead Sciences continues to deliver beyond expectations, and has a cash hoard to buy back stock, pay a dividend, and hopefully make a big acquisition. The stock is hitting support here as well, so I don’t see a lot of downside risk. At this point we have to trust management will do an acquisition that will boost earnings doing forward. GILD is ranked 34th of 35 stocks in the Growth Portfolio Power Rankings. |
Power Rankings |
Growth Stock Portfolio
34 of 35Aggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
