Gilead Sciences Inc. (GILD)

Has long owned it and likes it. They had some bad years when they overpriced their hepatitis C drug and received bad press. They also sell HIV and heart drugs, sectors that are growing. They increased their guidance last week, a rarity these days. At 10x earnings, he'd buy it, not sell it. One overhang is that their CEO is leaving.

The valuation continues to get lower and lower. They have a lot of cash. Their HEP-C and HIV businesses were 50/50 and now the HEP-C business is only 25%. The new CEO coming is to spend some of the cash intelligently. (Analysts’ target: $88.05).

(A Top Pick August 3/2017, Up 8%) Recently exited and bought JNJ instead. Hurt by own success with drugs that cure. Great for society, but not great for the equity. Waiting for transitional acquisition that’s not coming.

It has had a long, long downtrend and recently found its footing, hitting his downside target of four times book value. $65 would be a good floor on this stock at which point you buy.

Looking at the graph it has been in a very difficult position in the last coupe of years. They essentially cured hepatitis C. It was an expensive drug. $98,000 per patient. It has come off patent. Competitors came to produce it now. They have been on the penalty box for the past year and a half. But they are making inroads on other drugs. They have had meaningful trials. At this value there is a good opportunity.

Gilead is trading at 10.5x next year's earnings, and just increased its dividend. They're losing sales on their hepatitis C franchise which was a winner for them three years ago. But they have advances in oncology through a recent purchase. Good, new drug products are coming out which could lead to growth. Lots of free cash flow and some buybacks. They need, however, growth to justify high valuations. This will be a slow road, but a good one. (Analysts' price target: $85.72)

It has been in the news a lot. They own technology that is a cure for Hep-C. There is a lot of controversy as they are expensive and a cure costs about $90,000. Lobby groups have negotiated better pricing. It has had huge cash flow and great earnings but is falling dramatically.

They took a huge hit with their hepatitis C drug, their key product, facing generic competition, while they have nothing else in the pipeline. They need to acquire or do something with their cash to grow. Sales are flagging.

He thinks the downward pressure is almost done on price. They are building an arsenal in the oncology and HIV areas. They have a good pipeline of opportunities and he likes management. He would buy it here.

It's been painful to own. Their primary drug cured hepatitis C, the holy grail. But there's little recurring revenue here, and it disappointed investors by not reinvesting their cash. However, their new HIV franchise could take market share. A hated stock for a long time, but that sentiment is now changing. Your patience is now being rewarded.

He likes the company. It had some difficulties but is recovering slowly. He likes the prospects for the business. (Analysts’ price target is 89$)

(A Top Pick June 2/17 Up 28%). He still likes this company and sees it as a value play. His model price is $100. He would love to see another pullback to $65 to buy more, but suspects it will continue to move higher.

(A Top Pick Feb.23, 2017, Up 23%) Their HIV business continues to grow. Their Hep C business was so good it was curing people too quickly, so their revenue declined. He bought it when the market was undervaluing both businesses. Meanwhile, GILD had lots of cash, so he expected them to do a deal. They did one for a company treating blood cancer, and that's working well. Should continue to grow rapidly and make another acquisition.

Really good valuation, but down 30% from highs three years ago. Known as the hepatitis C virus company, but the constant push-down on this stock is competition on the hepatitis C program. Done some M&A which pleased investors.

Owned it when a lot of people exited pharma during the U.S. election when candidates threatened these stocks. Better investments in other sectors like tech. That said, he doesn't own it now, but would love to own it later.

Issues about competition with its drugs. Earns 26% ROIC, EBITDA has come down. In a good area, including oncology and HIV. A good pipeline, cash flow and valuations. Likes it a lot.