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Opinions Gordon Reid
Gilead Sciences Inc.GILDCOMMENTJun 16, 2015
Stock price when the opinion was issued
As of Jun 17, 2026. Market Open.
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It's a biopharma which as a group did very well last year. Compare that to the smaller biotechs which have not done well the past 3 years. This year, biopharma and staples have underperformed. This boasts a high free cash flow yield and has a great product cycle coming.
In past years, biotech was the safe trade, but this year risk is back, so these stocks have fallen out of favour. Also, there are so many drugs in trials now and big pharma needs new product. She's looking at Gilead and Moderna, because they have low PEs and alot of drugs in development. However, the overall sector is risky.
Has long owned this, because it's a value stock and keeps raising its dividend.
Brian Belski
Jim Lebenthal;fill-opacity:1;'/%3e%3cpath%20d='M31%2018.6001V30H8V18.6001L14.1334%2022.4334L19.4999%2014L24.8669%2022.4334L31%2018.6001Z'%20fill='%23EE5432'%20style='fill:%23EE5432;fill:color(display-p3%200.9340%200.3310%200.1956);fill-opacity:1;'/%3e%3c/svg%3e){kind=small}
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A lot of people on the street like this stock, but his concern is that 55% of their revenue comes from 2 drugs, both in the hepatitis C area, and are a cure. There is competition, so from an investment standpoint when you design or invent something that cures a disease, your market obviously goes away. Also, when other companies come out with competitive products, they are not only going to eat into your market share, but are going to eat into your margins, because they are going to fight you on price. Price is a very big issue with this company’s drugs. If their pipeline is not successful in coming out with more breadth, they are going to be exposed to lower prices on their products, lower volumes, and ultimately a shrinking market. The risk is too high for him.