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Gilead Sciences Inc. Message Board

  • cribsodden cribsodden Jun 13, 2006 2:39 PM Flag

    Worst Case Fair Value @ $8.60

    Maybe we got off to a ruff start, so lets try again:

    Peter Lynch once suggested investors search for P/E's at, or near, the growth rate, which ought to be accelerating. i.e. EPS rising 20% p.a. and a P/E ratio of 20.


    GILD trailing (ttm) P/E = 113.248

    Re: Yahoo �growth rate� est:

    Growth Est GILD
    Current Qtr. 26.8% Avg Est 0.53 EPS Growth 28.22%
    Next Qtr. 36.8% 0.52 36.58%
    This Year 29.5% 2.16 0.15%
    Next Year 15.3% 2.50 15.76%



    (This Qtr 06/2006) (Next Qtr 09/2006) (This Yr 12/2006) (Next Yr 12/2007)

    Avg Est 0.53 0.52 2.16 2.50

    Yr Ago EPS 0.41 0.38 1.66 2.16

    EPS Growth 28.22% 36.58% 0.15% 15.76%

    Hmmmm, seems to be some confusion on Yahoo as to what the forward growth rate is, but we can assume
    they are simply taking the average estimate against the year ago value and coming up with a best guess range, which is fine with me (1% +/- here and there is just noise among friends). Thus, my first concern would be the impact of the �un-accounted� for 115.2 million euros to Degussa and any material hocus pocus related to the $650.0 million principal amount of convertible senior notes, i.e., both of these SUBSEQUENT EVENTS are not priced into our P/E exam. In addition, I�d like to go back and check out:

    Change In Cash and Cash Equivalents ($439,236) $115,191

    Like dude, what was that about, i.e., your friggn Net Income Applicable To Common Shares is only @ $262,704 , so I kinda wanna know if that will impact my P/E. Yah gotta know this stuff as an investor, and hype and cheerleading is really a sweet thing when the bulls are running, but dude, the bulls aint running wild. So, anyway, I realize that like the bulls, Im off-track, so back to our P/E exam :

    If we take the GILD trailing ttm P/E @ 113.248 and go back to the estmates, then this whole exercise looks really stupid, because you can tell with your eyes closed that this thing is waiting to pop; nonetheless:

    EPS Growth 28.22% 36.58% 0.15% 15.76%

    Overvaluation #1: GILD trailing ttm P/E @ 113.248 - EPS Growth 28.22% = 85.02%

    GILD price 6/13/06 @ $57.35 X 85.02% = $48.75 overvalued

    Fair Value @ $8.60

    That could be way wrong, but maybe a good start would be nipping $8.60 off the over-heated $57.35 and head towards the $45 range after the dilutive hocus pocus hits the audited report?

    Until then, keep focused more on the following:

    * DOW JONES AVERAGES FUNDAMENTALS

    Index P/E (Incl. Negative)

    Trailing Industrial Average P/E 17.75

    Projected Industrial Average P/E 14.06


    ** U.S. producer prices rose modestly last month, but core producer prices climbed more than expected

    *** Rising interest rates will lead to a slowdown in the U.S. housing market

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • how about tomorrow there is a bird flu outbreak in the state. i bet GILD might go as high as $2oo

    • If this guy is such an expert in Gilead, why did he just create his profile a few days ago? Is he trying to hide something from us? Could this be the infamous stocksmoveforme coming back for more or just another nut like him?

    • he's analysis is so crazy that nobody on here would ever listen to him anyway. He would make it a tiny little more believable if his price wasn't so low.

      I don't know where these slimes come from.

    • Take your ten dollars an hour as a paid basher for a hedge fund and go somewhere else. Short term investments of less than one year are not assets with a tremendous amount of fluctuation but have a fixed rate of return. Again do not spout idiocy as all it does is take away any sense of credibility you may have.
      Goodbye

    • Re: The company is not burning through cash as implied but has taken the cash and bought short term investments. This is a judicious use of money as the ROI is much better than sitting in cash or cash equivlents


      Cash is KING baby and GILD just wasted future value by investing in over-valued investments which more than likely will melt in the next several years; wake up and read the news versus focusing on chicken nugget hype!

    • I've been in Gilead since it came public. Over those years, everytime GILD dipped a little, these basher guys would come on here and say the stock was overvalued and was going much, much lower.

      Guess what. They were wrong 100% of the time and dissappeared after the stock went back up.

      There bashers are so predictable (and wrong). I don't understand what they're trying to acomplish. What a complete waste of time.

    • Once you work it all out - do some retrospective analysis - if the price doesn't follow your model (e.g. we are currently XX% overvalued, then your model doesn't help much does it?

      I like Malos e-mail - right now the fair value of GILD id $57 period end of story.

      • 1 Reply to gildslayer
      • slayboy,

        I agree that the current fai market value of GILD is around $57, but the reason for the future estimate is to determine if GILD will go up or down in the near future. The future value will be based on how speculators react to real core EPS. The revenue hype and hocus pocus buildup is always an exciting time, because that is when the smart money either checks out or stays in for more. The main issue will be how people feel about cash burn and dilution versus holding on to hype and then placing a premium or discount on resulting EPS.

        The P/E is still a fun game to play, because it helps some people understand growth rates or in this case, cash burn!

    • hey dude, take another hit off that bong and relax; your little brain is straining so hard with all the numbers and math I'm afraid it might explode!

      now chill and ask mommy to fix you a sandwich.

      • 1 Reply to greatgeezersghost
      • Hey great dude,

        Very funny but Im still working on brunch.

        I did update the info a bit, with:

        52wk price range for GILD : 40.26 - 66.20 = $53.23, which indicates that my previous values are very much within realistic range:

        GILD �best� price per qtr:

        17-Jun-05 close @ 45.49

        30-Sep-05 close @ 48.76

        22-Dec-05 close @ 55.40

        15-Mar-06 close @ 63.74

        avg trailing price = $213.39/4 = $53.34

        Thus, Re EPS:

        GILD earnings for the four most recently completed quarters = $188.41/4 = 0.4710

        Then, to be fair, Ill split the differencr with yah since your crying about details and logic, i.e., $53.23 + $53.34 = $53.285

        Hence, average trailing GILD price @ $53.285/GILD earnings for the four most recently completed quarters = $188.41/4 = 0.4710

        $53.285/0.471

        GILD trailing P/E = 75.04

    • Cribsodden,

      Allow me to propose a truce. You've answered my questions honestly and fairly (and verbosely, a tendency of mine also); I can ask no more. That doesn't change the fact that I patently disagree with your methods and conclusions.

      Your entire argument is pinned on earnings growth estimates for 2007; A span of time starting 6 months from now and ending 18 months from now. Let's take a quick gander at how well those august analysts have estimated in the past.

      EPS Trends
      -------------- Current Year Dec-06
      Current Est. --------------- 2.15
      7 Days Ago ----------------- 2.14
      30 Days Ago ---------------- 2.13
      60 Days Ago ---------------- 2.10
      90 Days Ago ---------------- 2.07

      In three months, the estimate has been increased 3.86%. You should consider why that happened. Maybe the analysts making these estimates also choose to ignore the company fundamentals.

      Let's choose a date in the future when we can look back and judge those analysts and ourselves. I'll select 12/31/2006. If you have a preferred date in mind please feel free to name it.

      I would truly like to see a list of stocks which your methods suggest as good investments.

      Good luck.

      NoBuddy

 
GILD
101.38-1.96(-1.90%)Apr 17 4:00 PMEDT