Gilead Sciences Inc: Optimistic Future & Growth

Gilead Sciences Inc (GILD)

Gilead Sciences, Inc (Gilead) is a research-based biopharmaceutical company that discovers and commercializes medicines. Gilead’s primary focuses include human immunodeficiency virus (HIV)/AIDS, Hepatitis B, Hepatitis C, and cardiovascular/respiratory problems.

Gilead does an excellent job of maintaining ownership over its active drug ingredients, mainly elvitegravir 150 mg, cobicistat 150 mg, emtricitabine 200 mg, and tenofovir disoproxal fumurate 300 mg. They are the four major ingredients of Stribild pills, Gilead’s signature medication for fighting HIV. As a result Gilead shareholders are the full beneficiaries of Stribild’s success.

The company is also ruthless when it comes to buying back its shares. Gilead continued to repurchase its own stock during the financial crisis and is set to retire 5-6% of its outstanding shares.

The only major concern on Gilead’s horizon is its ability to sustain its current profit levels. In order to maintain its 44% profit margin, Gilead will have to continue charging $1000 per pill for Solvaldi, which may prove to be unrealistic.

The self-learning algorithm from the I Know First Top Stock Picks and S&P 500 forecast on July 2013 recently recommended GILD for the 12-month time horizon. The stock was the top-performing asset in the forecast with a return of 58.87%. The average return from this forecast was 45.09% beating the S&P 500’s return of 17.47%.

The color-coded forecast is very easy to read where green indicates a bullish signal and red indicates a bearish signal. Deeper greens signify that the algorithm is very bullish and vice-versa for deeper reds. The signal is the number flush right in the middle of the box and the predicted direction (not a specific number or target price) for that asset, while the predictability is the historical correlation between the prediction and the actual market movements. In other words, the signal represents the forecasted strength of the prediction, while the predictability represents the level of confidence. These are two independent indicators but consider both as you make your own analysis. In this forecast GILD had a fair signal of 0.00 and a strong predictability of 0.74. While Gilead Sciences Inc. was only the 9th best-recommended pick, the algorithm highlighted its bullishness with a lighter green color.

– Joe Stempel, I Know First Intern