Gilead Sciences stock is having an incredible day in the market. As I predicted yesterday, the stock is making a full recovering and “coming back roaring”. As a matter of fact, thanks to the gains we’ve seen this morning, Gilead Sciences has completely recovered from the two day losses we saw during the recent market sell off. Now the big question is “Will gains continue?” In my opinion, the answer is yes. Today, we’ll talk about why I believe GILD is such a strong stock and what we can expect to see from the stock moving forward.
Why GILD Should Be In Your Portfolio
Gilead Sciences is an incredibly strong company, but they’re not just strong because I say so. Trust me, there is plenty of data to back up my claims. As a matter of fact, GILD is one of the most intriguing success stories in the world of biotech. Here’s what makes Gilead Sciences a stock that’s well worth having in your portfolio…
- Strong Products – Gilead Sciences created Harvoni. Harvoni is currently the #1 treatment for those suffering with the hepatitis C virus. As a result, Gilead Sciences makes billions per year in revenue from Harvoni; and since HCV isn’t likely to disappear anytime soon, I don’t think that this is going to change.
- Incredible Valuation – GILD is unlike most other stocks. When it comes to Gilead Sciences, investors are treating it as a growth stock and by PE standards, it looks more like a value stock. The reality is that for a company at its level, we should see a price to earnings ratio of somewhere around 17; and many are even higher. However, when AbbVie came out with their treatment for HCV, investors started to get concerned; forming resistance at the top and keeping GILD down while they waited to see what kind of affect AbbVie would have on GILD’s HCV market share. As a result, according to NASDAQ Gilead’s PE ratio is still under 9! That means that not only is GILD a great company with an impressive stock, its stock is currently trading at an incredible discount. However, I don’t think that discount will last forever.
- History Of Earnings – Finally, the ultimate goal of investors is to see their money grow; and GILD has the ability to do just that. Gilead Sciences has an incredible history when it comes to producing earnings above expectations. According to Street Insider GILD has beat earnings expectations for 7 out of the last 8 quarters; and they’ve done it by a wide margin. While there was one miss, it was by a much thinner margin than the company is known for beating earnings by.
In my opinion, GILD is one of, if not the strongest, stock in biotech today. Not only does the company have approved treatments, their treatments completely blanket the market they were intended for. As a result, Gilead Sciences has an incredible history of producing solid earnings; and because of competition fears, the stock hasn’t been rewarded. This means that GILD is trading at an incredible discount. So, if you’re looking for a biotechnology stock to invest in, GILD should be one of the first you look into!
What Do You Think?
Where do you think GILD is headed and why? Let us know in the comments below!