Gilead Sciences, Inc. (NASDAQ: GILD)
Gilead Sciences is set to have an interesting day in the market today. After all, announcements of CEO changes tend to cause quite a bit of movement, and GILD made one of those announcements today. So below, we’ll talk about the CEO shake up, what we’re seeing from the stock thus far, and what we can expect to see from GILD moving forward. So, let’s get right to it!
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Gilead Sciences Announces CEO Changes
Gilead Sciences announced early this morning that there will be a change to the CEO role. John C. Martin, PhD , the current Chairman and CEO, will be stepping down from this role take on the role of Executive Chairman. In exchange, John F. Milligan, PhD will be promoted from his current position to serve as Chief Executive Officer. Currently, John F. Milligan, PhD, is the President and Chief Operating Officer of GILD. Along with the promotion to CEO, Milligan will be appointed to the board of directors at Gilead Sciences. According to the announcement, these changes will take affect on March 10th. John Cogan, PhD, Lead Independent Director at GILD, had the following to say in a statement:
“John Martin has led Gilead as CEO for the past 20 years, and under his stewardship, the company has developed and delivered therapeutic advancements to millions of people around the world. His legacy is clear – and the vision he has set will continue with his contributions as Executive Chairman.”
How The Market Is Reacting To The News
As mentioned above, there are few things in the market that can cause movement on a stock like a CEO change. Unfortunately, it doesn’t seem as though investors are happy about this one. Currently (9:36), GILD is trading at $83.19 per share after a loss of 4.96% so far today.
What We Can Expect To See From Gilead Sciences Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from GILD. While John Martin has led the company for quite a while, and it’s upsetting to see him moving away from his position as CEO of Gilead Sciences, I still believe that the stock will do incredibly well. After all, there are few people more qualified for the position than John Milligan. It’s also worthwhile to mention that throughout the past several years, GILD has woven one of the most interesting success stories in biotech. After starting with nothing several years ago, the company has grown to become the leader with regard to treating Hepatitis C, a life threatening disease. They also play a major role in the treatment of other diseases. While there have been competitors that have worked to step on their toes, they have maintained their leadership role in the Hep C space.
Aside from their leadership in medical areas and their growth story, it’s also worth looking at the stats surrounding the stock. Gilead Sciences has a history of producing solid earnings. However, because of investor fear, the stock didn’t realize the growth it should have last year. As a result, it is currently trading at an incredible discount. With a PE ratio below 10, it’s hard to deny that there is quite a bit of growth potential here. All in all, while I hate to see the CEO switch, I am incredibly bullish on what we can expect to see from the company moving forward.
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What Do You Think?
Where do you think GILD is headed moving forward and why? Let us know your opinion in the comments below.
[Image Courtesy of Bloomberg]