Let's see if Gilead Sciences Inc. (GILD) stock is a good choice for value-oriented investors right now from multiple angles.
The new cancer treatments are probably not doing enough to cure patients or help them live longer or better.
The biotech industry performed reasonably well in Q4. Hence, it is a good idea to select stocks from the sector which saw positive estimate revisions post Q4 earnings release.
M&A, Innovation & New Drugs to Drive Pharma Stocks
Gilead Sciences (GILD) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.
The biotech sector was in focus last week with these stories - FDA's acceptance of Regeneron's Dupixent's application for asthma, Biogen and partner AbbVie's decision to withdraw multiple sclerosis drug among others.
Gilead (GILD) announces encouraging data from a phase III study, on its new HIV therapy, Biktarvy, at the 2018 Conference on Retroviruses and Opportunistic Infections in Boston.
Over the weekend, we reported that after looking at the recent violent reversal in ETF flows, which resulted in the biggest outflow from equity ETFs since the Feb 5 Quant Crash, JPM was getting concerned that retail investors are no longer "buying the dip." As JPM wrote "the potential withdrawal of retail investors as the marginal buyer of equities could create clear downside risk for equity markets for the near term - especially after buying an unprecedented $100bn of equity ETFs in only one month during January." Incidentally, the January inflow coincided with what many dubbed the market's blow-off top, or mania, phase. We now have confirmation that JPM was right because according to TD Ameritrade, in February euphoria turned to panic as mom and pop investors ran for cover from tumbling stocks at the fastest pace since at least 2010. As shown in the chart below, TD Ameritrade's Investor Movement Index (IMX) tumbled to a reading of 5.95 last month from 7.79 in January, a plunge of 23%, the largest monthly decline since TD Ameritrade started tracking the figures in 2010, according to a press release. This was also the second straight loss for the gauge, which fell 9 percent in January. “After the amazingly quiet 2017, we saw 2018 start with some volatility,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It appears that TD Ameritrade clients decided to significantly limit their volatility risk in the market, changing their game plan from less speculative to more of a low beta weighted one.” Speaking to Bloomberg, Kinahan added that the drop demonstrated "our clients really showing a lot of caution for the period. After last year where our clients built up their exposure all year long, we saw a little bit of a click down in January, and a significant click down in February.” That said, the decline didn’t persist throughout the month, according to Kinahan. Instead, the broker-dealer’s clients picked up some holdings around Feb. 9 when the selloff subsided. But shortly after, they resumed selling with force." Hence JPM's concern that retail investors may now be selling rallies instead of buying dips. According to TD Ameritrade, the equities that were sold the most in February were Gilead Sciences and Facebook. Bristol-Myers Squibb was also net sold after it reached an 18-month high, as was Snap which reported a revenue increase which led to a jump in share prices. Finally, Target was net sold following an analyst upgrade and increased price estimate. Additional names sold included ConocoPhillips, Juno Therapeutics, and Bioverativ. And yet, despite the sharp pullback in risk, clients remained net buyers in the period. Among the biggest net buys were General Electric and Ford as both companies neared multi-year lows. Apple and Amazon were also net buys, despite reporting better than expected earnings then trading lower following market volatility. Boeing traded higher following better-than-expected earnings and was also a net buy. Microsoft was a net buy after beating earnings, as was Alibaba Group, which was down almost 20 percent from recent highs during the period.
Offhand comments from Gilead Sciences helped gave the high-flying gene-editing stock more lift.
The Zacks Analyst Blog Highlights: Gilead, BNY Mellon, State Street, Alliant Energy and Dillard's
Top Analyst Reports for Gilead, BNY Mellon & State Street
The major news in the biotech sector in the last five trading sessions include the FDA's refusal to file letter for Celgene Corporation's (CELG) ozanimod while Gilead Sciences, Inc.'s (GILD) announced an agreement with Sangamo Therapeutics.
Sangamo Therapeutics (SGMO) shares rose more than 14% in the last trading session, amid huge volumes.
A federal judge in Delaware has overturned a jury's verdict requiring Gilead Sciences Inc to pay a record $2.54 billion because its hepatitis C drugs Sovaldi and Harvoni infringed a patent held by rival Merck & Co Inc. The verdict had been the largest ever in a U.S. patent case but U.S. District Judge Leonard Stark in Wilmington, Delaware, on Friday ruled Merck's patent was invalid. Gilead in a statement on Saturday said it always believed the patent was invalid and was pleased the judge confirmed that opinion.