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lookoutgrady 15 posts  |  Last Activity: Dec 12, 2014 9:19 AM Member since: Nov 15, 2007
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  • By Ben Levisohn
    RBC’s Michael Yee and team tell Gilead Sciences’ (GILD) shareholders not to worry about the bears:
    Associated Press
    Over the past months, investor sentiment has shifted from bulls enjoying significant upside consensus earnings revisions to many going into 2015 worrying and telling us the “bear case” such as: (1) Q4 Hep C sales may miss consensus (analyst expectations a bit high for Q4), (2) competitor AbbVie (ABBV) is coming by 12/22 and may take lots of share from Gilead, and “payors are in control” and AbbVie “will just significantly rebate” to get more share from Gilead Sciences than consensus thinks…and then Merck (MRK) is coming in 2016, causing Gilead Sciences Hep C sales to flatten out in 2015-16 so no more growth, (3) pipeline isn’t enough to overcome Hep C short-tail and so visibility is limited at best beyond 2015.

    We think these issues are understandable but won’t play out – and we expect Gilead Sciences stock will generally work higher. In contrast to bears, fundamentally, and based on our discussions with docs, and especially with the stock back at 10x buyside consensus next year, our call is: (1) AbbVie may get a long “24-week” (not 12-week) label for cirrhotics, making AbbVie’s regimen less interesting/competitive, and they’ll price rationally around $85-90K for 12 weeks’ non-cirrhotic use but thus $170k+ for 24-week cirrhotics, (2) payors have “adjusted” and are “better prepared” for HCV after 2014 and built in the impact for ’15 and can’t truly “block” Harvoni on formularies since it’s the only drug for GT2/3, and AbbVie also has drug interactions with another 30% of pts, (3) Gilead Sciences will meet or beat 2015 US consensus of $12B, (4) they’ll beat OUS ’15 consensus of $3B possibly by $1B+ over the year, (5) they’ll recruit senior oncology personnel and leadership to increase focus on cancer and immuno-oncology in 2015-16 and may do more bolt-on deals, (6) continued aggressive buybacks and our view is they’ll eventually give

    Sentiment: Strong Buy

  • lookoutgrady lookoutgrady Dec 11, 2014 7:45 PM Flag

    Yet Gilead doesn’t look poised to deliver a worst-case scenario — perhaps just the opposite. With first-mover advantage in the HCV space — and less-than-promising results from other big pharma peers like Merck ( MRK ) and Bristol-Myers Squibb ( BMY ) — Gilead will probably remain the industry leader, especially given the ease of taking Harvoni: just one pill a day. Even AbbVie ( ABBV ), probably Gilead’s closest competitor in HCV, can’t match that convenience — so many doctors and patients are likely to prefer paying a premium for Harvoni over whatever discounted treatments AbbVie ultimately launches.

    Moreover, given the fanfare around HCV, many investors have forgotten about Gilead’s $9 billion HIV business and its ongoing research in other areas. “I would argue that [investors are] paying nothing for the potential upside of Gilead’s R&D pipeline,” says John Park, co-portfolio manager for the Oakseed Opportunity Fund ( SEEDX ), which recently counted the stock as its sixth-largest position. He notes that Gilead recently submitted a new formulation of its HIV drug tenofovir alafenamide (TAF) for approval, an important development that’s being overshadowed by Harvoni.

    “The biggest thing people forget about is the management track record,” says Park. “In the 1990s, Gilead had no products and no profits. Not a lot of those companies make it to the size Gilead is today, and even fewer make it with the same CEO. John Martin has demonstrated a lot of value creation.” Gilead’s market value is about $158 billion.

    Sentiment: Strong Buy

    Dec. 11, 2014 8:01 a.m. ET
    It’s unusual for a stock to be a favorite of both growth and value investors — but then Gilead isn’t a typical pharmaceutical company.

    Most investors know Gilead Sciences (ticker: GILD ) for its blockbuster treatments for HIV and hepatitis C (HCV) — and its big swoon this spring when the biotech sector as a whole sold off. Yet while the stock has bounced back strongly, its valuation remains low, even as prospects for its drugs look brighter than ever. The Food and Drug Administration approved its latest HCV drug, Harvoni, in mid-October, and it is expected to log $1.4 billion in sales in the fourth quarter alone.

    “A lot of traditional value companies are trading at a higher multiple than Gilead,” says Brain Lazorishak, portfolio manager of the Chase Growth Fund ( CHASX ), which recently counted Gilead in its top five holdings. He says that while some discount is warranted given uncertainty around future drug sales, at current levels the stock is at an attractive entry point. “If things go right, there’s a lot of upside, and with the valuation where it is, it’s [already] discounting the possibility of things going wrong.”
    Indeed, at just 10.5 times forward earnings — versus 17 times the Standard & Poor’s 500 — Gilead seems to already reflect significant risk. And even if 2015 earnings per share match the lowest of Wall Street’s 27 estimates, the stock, at a recent $104.84, would be at 13.7 times forward earnings. That, too, would be cheap given that earnings per share are projected to rise 25% from this year to next.

    Sentiment: Strong Buy

  • lookoutgrady lookoutgrady Dec 11, 2014 6:07 AM Flag

    Great find! It would be good to hear more about the up-listing mentioned in the write-up

    Sentiment: Strong Buy

  • lookoutgrady by lookoutgrady Oct 29, 2014 7:52 PM Flag

    "Trading at 11.5 times forward earnings, Gilead doesn’t look too pricey, despite touching a new high earlier this week. That multiple is below many of its peers, and while some discount is warranted given the uncertain outcome of many of its drugs, it seems too cheap given that on average analysts expect the company to log long-term EPS growth approaching 20%. Gilead also repurchased $1.7 billion of its stock in the quarter."

    Sentiment: Strong Buy

  • Reply to

    Insider sales

    by gadder007 Sep 25, 2014 7:15 PM
    lookoutgrady lookoutgrady Sep 26, 2014 9:01 AM Flag

    Interesting. It's concerning that the CFO sold all shares. He is not anticipating that apple goes higher

  • Reply to

    Keep calm - let us sell first

    by gadder007 Sep 25, 2014 6:28 PM
    lookoutgrady lookoutgrady Sep 26, 2014 9:00 AM Flag

    Are you referring to Barrons?

  • Reply to

    Keep calm - let us sell first

    by gadder007 Sep 25, 2014 6:28 PM
    lookoutgrady lookoutgrady Sep 25, 2014 7:25 PM Flag

    See you at 90

  • Reply to

    Millions of ibend recalled or returned

    by gadder007 Sep 25, 2014 6:30 PM
    lookoutgrady lookoutgrady Sep 25, 2014 7:24 PM Flag

    I like my phone bent

  • Reply to

    News out: new price target 90

    by gadder007 Sep 10, 2014 7:30 AM
    lookoutgrady lookoutgrady Sep 10, 2014 8:57 AM Flag

    Doesn't look good

  • lookoutgrady by lookoutgrady Aug 13, 2014 10:33 AM Flag

    $44.52 is its 52-week low and acts as a major support. Any high-volume move below $44.52 will then push shares of CREE into new 52-week-low territory, which is bearish technical price action.

    I'm still long a few shares as I'm optimistic about the company. However I'm disappointed about management and strategy. There seems a lot of competition in the lightning business and low cost light bulbs will erode profit margins. And I think this is the concern here with the weak guidance.

    I'm still confident that the market place is big enough for several players and Cree carved out their place. But the company needs to move more aggressively as competition is not sleeping.

    Sentiment: Hold

  • lookoutgrady lookoutgrady Aug 11, 2014 3:41 PM Flag

    This Friday is option expiration for August and max pain is about 320. I bet big money brought the stock down to induce max pain. After Friday the stock will recover, hopefully go back over 340 and to new highs .

    Sentiment: Buy

  • lookoutgrady lookoutgrady Jul 31, 2014 12:25 PM Flag

    There could be several reasons for selling, but there is only one reason for buying. It is really great news that a director of the company thinks the stock is heading higher. He must know some the sellers don't....

    Sentiment: Strong Buy

  • From Barrons: "Satghare and Tainter think shares of Plug Power could hit $8. That means the stock could gain another 71%...."

    More from Barrons:
    "FBR analysts Aditya Satghare and Benjamin Tainter explain why they’re optimistic about Plug Power’s prospects:

    We believe that Plug Power has successfully made the transition from the early introduction of fuel cell power packs in material handling systems to offering complete hydrogen-based solutions for a wide range of material handling applications. We encourage investors to look beyond the company’s history and instead focus on the steps taken by the management team to transform the company into a fully integrated business model. We believe that the recent order wins at large marquee customers will have a follow-on effect, and we expect the company’s diverse customer base to continue to transition to hydrogen-based forklift fleet solutions. We acknowledge that Plug Power remains in the early stages of its growth and believe that the next 12 months will determine the pace of overall market adoption and business model transformation. However, we see multiple catalysts on the horizon in the form of new order wins in the U.S., the potential for expansion in Europe, and the rollout of a hydrogen delivery solution. We also view the risk/reward profile as attractive at current levels, and our blue sky scenario could result in meaningful upside."
    I know the write up is a few days old, but still valid.

    Sentiment: Strong Buy

  • Sentiment is that Gilead will beat in a big way....

    Sentiment: Strong Buy