Biotech Stocks to Buy – Gilead Sciences (GILD)
Gilead Sciences (GILD) is another large-cap pure play, with a market cap of more than $136 billion.
Wall Street is looking for good news when GILD reports quarterly earnings on July 23; for instance, UBS analyst Matthew Roden recently raised his sales expectations.
Innovative virus treatments have been Gilead’s bread and butter, ranging from its development of Tamiflu in the late 1990s to blockbuster HIV and Hepatitis C drugs. Although GILD faces pricing headwinds from its blockbuster Hep C drug, Sovaldi, short-term jitters about the high cost of the orally delivered treatment are likely to fade given the high cure rate. Gilead also still has blockbuster HIV drugs like Stribild and Truvada.
GILD shares fell by more than 20% between late March and mid-April, but the stock has been trending higher since then. GILD’s fundamentals are intriguing: The stock trades at only 11 times forward earnings and has a price/earnings-to-growth rate of 0.46, indicating that the stock still could be undervalued.
GILD also has a lot of cash on its balance sheet — always a good thing for biotech stocks.