There is nothing "wrong" with GILD. It will continue to grow and do well. It's just that the days of doubling every 12-18 months is over.
I go after people that have, IMO, unrealistic expectations -- be they bull of bear. I also go after people who believe that any stock goes up in a straight line
To answer your question, absent a major acquisition, I'd be surprised to see GILD going above 125 within 12 months, but I do believe that the long term trend is still up.
I chose to focus in on your most ridiculous statement that GILD would be worth $320 to $350 ($500+ billion market cap) within 12-18 months. As much as you want to talk theory, you ignore the fact that an 18% growth in EPS isn't going to get you there.
Other companies have higher PE's because they have higher future expectations for growth than GILD. CELG for example has a PE of 29 , but will grow eps by 33% (if analysts are right). Now if GILD were to find another blockbuster acquisition, than it's PE might rise.
"But you DID say 12-18 months and not 36-48."
You see time does make a difference.;
I'll say it again: THERE IS NO WAY IN HELL THAT AN 18%
GROWTH in EPS gets you to a $500 billion market cap within 18 months.
However, an 18% growth compounded over 4 years yields an EPS that is almost 2x the current level. That would yield a higher stock price -- but still nowhere near a $500 billion market cap -- absent a significant acquisition,.
"My original post stated a cursory range of 12-18 months, truth is...it can be 24-36 or even 36-48 months...or it can be within 12 months.
But you DID say 12-18 months and not 36-48.
"If GILD takes the lion share of the HCV market (50-75%) market with virtually no competition and other hurdles."
Well Abbievie already shoots that argument to hell -- and then there's the MRK/IDIX combo to deal with ..
"So....as long as GILD increases Revenue/Net Income, it will increase its market cap. Nothing you and I can do about that."
You are absolutely correct.
Analysts expect EPS to grow by 18% this year to next. You were talking about a $500+ billion market cap "within 12 to 18 months". There absolutely no way that an 18% growth in EPS gets you anywhere near that by the end of next year -- except in your fantasies.
$500+ billion market cap???
Absent a realy significant acquisition, there's not even one small chance in hell -- in my most humble opinion
Here's the summary:
The HCV franchise has transformed Gilead (GILD) in the past two years from a solid mid-tier biopharma company into a pharma giant with a market cap rivaling Merck and Pfizer.
The rapid growth, however, is organically unsustainable and earnings decreases are likely within 4-5 years.
To maintain its trajectory to become the world’s largest market cap pharmaceutical company, Gilead is likely looking for another transformative acquisition, perhaps a sizeable one.
While 2015 would be a better time for an acquisition, the current M&A frenzy may drive GILD to an earlier acquisition since companies of interest may no longer be available.
Some acquisition targets include Bristol-Myers-Squibb (BMY), Regeneron (REGN), Pharmacyclics (PCYC), Incyte (INCY), Intercept (ICTP), and Alnylam (ALNY)."
I would hope that GILD would NEVER even think about buying BMY.
Replace the word oversold above with overbought.
There are plenty of examples of "death spiral" stocks staying oversold for long periods of time.
YUP, BoDs vote on stock splits, but in order to do one they need to have available shares to accomplish the task. It is shareholders that must authorize an increase in the number of shares.
So I have a question for you: GILD has split 5 times over the last 12 years. EVERY TIME it split in the past, EVERY TIME, it split after showing that it could hold $80. Why not this time?
Give it time.
I challenge you to find ANY RSI oversold stock, ANY STOCK EVER, that has stayed that way for 2 months.
GILD won't be the first.
In general I agree with you. I still have most of the GILD I bought 11 years ago at a split adjusted price of about $7/share.
However the question was "why would someone want to short GILD?"
The answer is because technicals may be saying that it's about to fall.
I was answering the question.
Besides, if one had sold when ti was overbought and bought at the 50 each time it hit those levels over the last two years -- even couting taxes and brokerage fees one would still have about 30-40 percent more than a buy and hold strategy would have yielded.
No stock is a "buy and never sell." Not one of 'em.