I wouldn't mind seeing any of my stocks advance to their price target. In the case of CLMT, I think any reassurance about the dividend - even if they were to cut it substantially - should take us to 25, I think.
Melhuie, that's a perspective I hadn't thought of. Intriguing idea. When I was a novice advertising copywriter, i was put to work on some of Kodak's copying systems, which were markedly inferior to Xerox's. They explained to me that Kodak was terrified of being sued by the feds for monopolizing the photographic products industry and had no interest in making their products competitive with Xerox. Now Kodak is bankrupt and Xerox provides labor intensive back office services. They probably would both have done better if they'd competed more aggressively.
We will probably never know. But, given the background of the patent suit, I don't understand why GILD wasn't more aggressive. I recently read an excellent biography of Cornelius Vanderbilt. If a competitor horned in on a profitable steamship or railroad route, The Commodore would lower his own price until he had driven the competitor to the brink of bankruptcy, then step in and graciously buy his assets at salvage prices. He never conceded even a small portion of the business.
ESRX for committing to an inferior drug when they could have had the superior drug at the same or lower prices. GILD for losing the ESRX business when they were eventually willing to sell Harvoni at the same or lower prices. The losers are obviously the patients on the ESRX formulary plans. The only possible explanation for ESRX's folly is that they had calculated that a cheaper drug could be made available earlier in the progression of the disease. But, given their ultimate willingness to discount, it's hard to conceive of a reason why GILD didn't shut ABBV out of the business.
Yes, there are such animals. But, in general, I would venture to say that buy-and-hold-forever is not a viable strategy for most. For one thing, you can eventually end up with a very large portion of your money in one asset. My first major ventures into the market were GE and HPQ in the early nineties, a period during which they both split twice. I gradually sold off my shares and took my long term capital gains, which I have never regretted, since neither has gone anywhere since. The corollary to "every dog has his day" is "almost every star becomes a dog someday".
..we're sure getting outperformed by the big refiners today.
PS Despite this seemingly parabolic performance, there were long periods where GILD went essentially nowhere. For example, the split-adjusted price first breached 20 in April 2007. In November of 2011, it closed at a split-adjusted 19.92. So you would have held the shares for 3 1/2 years without any gain at this point. The high split-adjusted monthly close during that period would have been 27.66 in May 2008, and the low 15.91 in August of 2010. In other words, you would have seen the value of your investment drop almost in half over a period of a little over 2 years. It would have taken an extraordinarily patient and faithful investor to hold the stock during this time, especially since the S&P dropped only about 25% over that same timeframe. My point is that despite the fabulous gains seemingly returned by buy-and-hold investors, they are rarities. And there are also instances of those who held tight to very profitable investments in companies like JDSU or Xerox and lost all of their gains ... or more.
No one ever bought GILD for $1. Revaluing shares from the past to account for splits may get you down there, though. There have been five 2-for-1 splits since February 2001. If you had bought 100 shares there at around 68 a share for $6,800, they would have become 3200 shares by now with a value of $320,000. (making your split-adjusted cost per share around 2.12) The real beauty of this investment, if you had held it, would lie in the fact that this sum was compounding untaxed all that time.
If you bought GILD at the beginning of last year, you'd have made about 33% on your investment by now. If you had bought the biotech ETF, IBB, you would have done even better. This is not to disparage GILD, but just to point out that its recent performance is not exceptional. In fact, when the biotech indices outperform it, an obvious conclusion is that many pharmas have done better than GILD.
I own 13 other biotech stocks and 10 of them are up more percentagewise than GILD today. I intend to keep holding this, but I don't think it will be a bellwether of my pharma stocks anymore.
Well, since IBM fell from 185 to 162 last year, 2014 must have been a terrible year for the market.
...one could assume that some are selling into this strength. Given the very large overhang of calls, it's hard to imagine this breaking out above 100 before next Friday.
Yes, I agree that this is poised to go higher. Unfortunately, these stocks are packaged as elements of oil price hedges, so that when prices stabilize, they are automatically sold. Also, some who were reluctant to take profits at the end of last year are doing so now. Which brings us to the poster's question, "WHY hold?", in a word: Taxes. Having been lucky enough to enter at an average price of 29 three months ago, I am not about to split that gain with the feds and California.
Yesterday's Feurstein article in The Street was headlined "Fifteen Fabulously Intelligent Biotech Stock Predictions for 2015". What followed was a series of stupid prognostications of GILD buying PFE, etc. I have never known any stock tout so insecure that he labeled his own musings "fabulously intelligent".
The real question here, I think, is how closely this company is tied to the price of oil. I offered some uninformed observations about their hedges, and am still waiting for someone knowledgeable to check in. The stock's behavior suggests that lower oil prices will have an adverse effect on their profits. I have the novel idea that the effect of lower oil prices, inthe long run, will be highly favorable. We will see.
Shostakovich, you musical old bolshevik, has it occurred to you that you could have shorted (bought puts, really) on almost any stock but this one and made some serious money during these past few sessions?
To amplify a bit, I note that XOM has recovered 4.4% from its December lows; CVX has recovered 8%. CLMT is up 16.7% from its December low of 19.76.
Seems to me that this dips every day, but rebounds much more strongly than the rest of the energy stocks. I have been buying into these intraday dips and now own a lot more of this than I'd planned on. Unlike most energy stocks, it is still well off its oilcrash lows.