I’ve been covering Gilead Sciences for quite some time now and I’m proud that through the ups and downs, I’ve maintained my bullish opinion on the stock. The reality is that GILD has one of the most interesting success stories in biotechnology today and the story keeps getting better! Here’s why you may be missing out on an opportunity if this stock is not in your portfolio…
Gilead Sciences Has An Impressive History
First and foremost, Gilead Sciences has an incredible track record. Starting with the hepatitis C market, the company pretty much controls it! Although concerns started to rise earlier this year about GILD’s ability to maintain control of the HCV market as AbbVie stepped in, the company proved that they have a stronghold on the market.
It’s also important to look at GILD’s earnings history. The bottom line is that this company has a strong history of producing incredible earnings reports. According to Street Insider, Gilead Sciences has produced earnings above analyst expectations for 7 out of the last 8 quarters – including the past 3 consecutive quarters – and the only miss in the bunch wasn’t missed by much!
GILD Is Heavily Undervalued
Another metric I like to pay attention to when choosing stocks to cover is valuation; when it comes to GILD their valuation is pristine. The reality is that in today’s market, it can be difficult to find a stock that isn’t overvalued, meaning that good value for your money is hard to come by. However, Gilead Sciences is great in that respect. Currently, a PE ratio under 17 is great. Now, try a PE ratio under 10! According to NASDAQ, Gilead’s price to earnings is only 8.55 – about half of what investors should be looking for. That insinuates incredible upside potential and one heck of an opportunity.
More Good News Continues To Pop Up
Gilead Sciences also has a knack for producing positive news time and time again, and since news has a tendency to cause moves in the market, that’s great for investors. Most recently, the company announced data from it’s AMBITION study. AMBITION is a collaboration between GILD and GlaxoSmithKline plc (ADR) (NYSE: GSK). The study is looking into a combined therapy that combines Letairis and tadalafil in an attempt to treat patients with pulmonary arterial hypertension. New data from the AMBITION study shows that the combined treatment reduced the risk of clinical failure by 50% when compared to Letairis and tadalafil monotherapy. Following the announcement of data, University of California’s Emeritus Professor, Lewis J. Rubin, MD., had the following to say…
“The only other published, large scale, event-driven study to date in PAH compared an endothelin receptor antagonist to placebo in patients who were either treatment-naive or on background therapy, however, all patients in AMBITION received an approved therapy for PAH… Thus, the magnitude of the effect with this combination in comparison to active monotherapy is impressive, particularly in WHO functional class II patients where we observed nearly an 80 percent reduction in the risk of clinical failure versus monotherapy.”
The Bottom Line
The bottom line is that GILD is a great stock. The company has a stronghold on the HCV market, is incredibly effective in the HIV market and is continually finding new medical ailments to tackle. Combining the company’s successes with an incredibly low valuation makes this an incredibly strong buy!
What Do You Think?
Where do you think GILD is headed and why? Let us know in the comments below!