Gilead Sciences Inc. (GILD)

Chart shows this has a declining triangle, and he would stay away. We don’t know where this will end. It’s in a period of prolonged weakness.

Something he was very excited about owning for about 5-6 years, and it did very, very well. Using his stop-loss strategies, he was able to pull out of the name when Hillary Clinton started talking about drug costs. Believes this has an absolutely, ridiculous, low PE ratio. Their hepatitis C drug looks like it is their one trick pony, which is causing it to pull back. This whole space is getting pretty long in the tooth of a downward trend in the cycle. Thinks the selloff is overdone. The kind of thing where we have to start looking for some value. Attractive at this level.

This is the company that found the cure for hepatitis C. It has been a very challenging stock to own, and very much a value trap for the past couple of years. They are seeing price pressures and competition from many competitors over the next year on hepatitis C. They have cut their guidance sufficiently that they can meet it. A great balance sheet and are buying back tons of stock. An OK dividend. Thinks they have some hidden assets in their Nash portfolio and expects to see some results towards the end of the year. He uses covered call strategies to help generate some extra income.

They brought guidance down going forward. They have a key HEP-C drug which is getting competition. They have to figure out a way to grow their pipeline and then their revenue and earnings. She would not be buying it for Pharma exposure. See her top picks and she also likes ABT-N.

7 times earnings. It fell on a recent earnings disappointment. The HIV drug is continuing to do well and the HEP-C drug is declining because they are curing everyone. He wants to see them do an acquisition that will grow their drug business. Some of the drugs in their pipeline look promising and he needs to see them coming to fruition. They are buying back their shares and will hopefully increase their dividend. (Analysts’ target: $82.00).

He likes it a lot and owns it for clients. It is a great complement to CELG-Q. GILD-Q had a weak earnings report the other day. They dominate the HIV market and the HEP-C market. He does not know where the earnings are going, but they have done a great job with the cash on their balance sheet. He likes it a lot.

Sell? He is not wild about pharmas right now. You should also think of this in the context of your overall portfolio and speak to an advisor. He would hope you have something that has a significant gain so that you could use this as a loss to offset it. He would just take his lumps.

(Top Pick Feb 4/16, Down 14.47%) It is getting closer to EBV +5 ($65) every day, which is where it is going. There is 89% upside to his model price. He likes the drug space as it is cheap. You kind of have to be in this group.

There has been a lot of news about the HEP-C losing some of the offerings, lots of competition. It has in the low teens of drugs in phase III trials so it looks really good for the second half of 2017. There are not many risks here. (Analysts’ target: $94).

A low price can get lower and a high price can get higher. Don’t rely on 52 week highs or lows as a cap. It is a one product company with competition coming at them aggressively. They are putting away a lot of cash. If they made an acquisition there would be opportunity. He would look elsewhere, but it does not mean there could be a transformational deal.

The sector is trading at 14-14.5 times, while this company is trading at about half that multiple. From that perspective, it is screaming value. However, this was a 2-trick pony with hepatitis C and HIV. The hepatitis C has been slowly decreasing and HIV sales have been increasing, but not enough to offset the decline. Generating tremendous free cash flow, and he thinks the market has taken a bit of a wait and see attitude, to see how management is going to deploy this. The stock has a 2.5% yield, and he would like to see them bump the dividend. They would still have more room in terms of capital to put the money to work, to see where the next leg of growth is going to come from.

This has been a big disappointment over the last year. They’ve been hit on a couple of fronts. On their hepatitis C drug package, they have almost run out of the easy patients and the growth rate has slowed tremendously. They still have a very good pipeline in terms of HIV drugs, and also trying to build up an oncology pipeline. Stock trades at very, very low multiples, 7 or 8 times earnings. There is not going to be a lot of growth. Because of some of their high priced drugs, they really are in the target of Trump and drug pricing in the US.

Has never bought this because the stock price has been sluggish. He likes to see companies who have strong fundamentals as well as strong technicals. While this passes the sniff test in terms of strong fundamentals, there is just something there that the market is really not comfortable with. He would like to see the stock price perk up and some technical strength before wading in.

Manufactures very powerful drugs for hepatitis C and HIV. Trading at a very cheap valuation, about 7.5X next year’s earnings. They also have a pipeline of new drugs. Has cash which can be used for an acquisition. Given the cheap valuation and their strong franchises in their drugs, this is very compelling.

This is such a high quality and the valuation is so cheap. They have the leading compounds for Hep C and HIV treatments. The concern is that there is going to be some kind of price controls on these life-saving drugs, but what people fail to realize is that these drugs actually save costs in the system, because it keeps people out of the hospitals. This company has a very bright future as a real leader in the healthcare space.