GIlead science is an intriguing looking value purchase that has been trending down for the past few years due to shrinking sales of its Hep C drug treatment "Harvoni", conceivably because they've done such a good job curing the public of this liver disease.
Seeing as their biggest risks right now are that their blockbuster is declining in sales, and it is uncertain if/when this will end I think sometime within the next 6 months will be a good entry point. The pessimism imo is baked into the price and they are generating significant enough cash flows and EPS that if these values were cut in half I still wouldn't be upset based on current market conditions. They are also paying a 3% dividend and have an EV/EBITDA of around 5 which are both great numbers relative to the biotech industry and the market in general.
Considering they have many possible new drugs in the pipeline, including a one pill a day HIV treatment expected to gain FDA approval in February I think the risks are mitigated. They also recently acquired KITE pharma for 11 billion, who is pioneering research in antigen altering cancer treatments. I see GILD continuing to be a strong player in HIV and hepatitis treatments and being a pioneering member of new gene altering cancer therapies. Obviously there are many risks, but the amount of cash on hand and the insane cash flows being generated offset this as well as their many future prospects. In 5-10 years, this investment will likely pay off.
Submitted December 26, 2017 at 11:15PM by InvestingLifeSavings http://ift.tt/2C9ivur
