Gilead Sciences, Inc. (NASDAQ: GILD)
Gilead Sciences has been dealt an incredibly rough hand over the past three months. However, this great company isn’t going to go down in flames. There have been a few issues driving the company downward that, in my opinion, are going to be headed for an end relatively soon. Today, we’ll talk about what these issues are, why GILD is one of the strongest investments in biotech, and what we can expect to see moving forward.
Issues That Have Brought GILD Down
There have been two major issues that have been dragging on the tails of GILD. Here they are…
- Market Wide Declines – Throughout the past several months, we’ve seen rough times hit the US market. Unfortunately, high valuations, economic conditions around the world, and geopolitical uncertainties have all taken their toll on the United States market. Throughout this time, no stock has been safe. Just about every stock on the market has experienced the declines including Gilead Sciences.
- Hillary Clinton’s Comments – Another major issue that hit GILD hard recently was comments made by presidential candidate Hillary Clinton. Hillary Clinton announced that she has plans to end high prices on the medications for treatment of chronically ill patients. Because Gilead Sciences is the leader in the treatment of HCV and focuses heavily on other chronic illnesses, these comments hit home for investors.
Neither Of These Issues Is Likely To Affect GILD In The Long Run
While short term declines as a result of market wide resistance and presidential campaign comments are understandable, neither of these issues is likely to affect GILD in the long run. The reality is that the market goes through ups and downs, but the downs don’t last very long. With regard to Hillary Clinton’s comments, she’ll need to win the presidential election before she’s able to effect such a large change; I simply don’t think that’s going to happen!
Why GILD Is A Strong Investment Choice
- Solid Products – First and foremost, any company is only as strong as its products. When it comes to Gilead Sciences, their product line is absolutely incredible. The company is the current leader in the treatment of HCV. They have also been working diligently in the treatments of HIV, HBV, and more! All in all, GILD has proven their abilities with regard to creating effective treatments that take the market by storm!
- Proof In The Pudding – While great products are nice to have, we’ve learned from MNKD that just having a great product isn’t enough. You need to be able to market that product. When it comes to GILD, the proof with regard to marketing ability is already there. They didn’t become the leader in HCV for no reason!
- Low Valuation – GILD was already trading with an incredibly low PE ratio. However, as a result of the declines we’ve seen recently, that PE ratio has fallen even further. This presents an opportunity to get in on a strong stock at an incredible discount.
What Do You Think?
Where do you think GILD is headed and why? Let us know in the comments below!
[Image Courtesy of Bloomberg Business]