The market is rebounding nicely after October’s sell-off. All signals point to a bullish trend, and as we dive back into the market after taking a pause, I’ve noticed that the health care sector is gaining momentum.
Today, I’d like to look into a biotech position that has great growth potential. Gilead Sciences, Inc. (GILD) is a biopharmaceutical company that develops and discovers medicines for the treatment of life-threatening diseases all over the world. While GILD has experienced its share of pullbacks, the stock has been able to bounce back fairly quickly. In fact, since the beginning of this year, GILD’s stock price has increased by 33.7%.
The Turner Analytics database gives the stock a Demand Fundamental rating of “Strongly Bullish,” with a score of 89 out of 100; Gilead’s quarter-to-quarter revenue growth, quarter-to-quarter earnings growth, year-to-year earnings growth and multi-year revenue growth all earn a score of 5 out of 5. This is not surprising, as in the third quarter GILD increased its total revenues to $6.04 billion, compared to $2.78 billion last year.
Technically, GILD is equally strong, scoring a 95 out of 100. I particularly like that GILD has strong institutional ownership and that the industry (biotechnology) and sector (health care) are both in bull mode. Gilead Sciences has an expected move of $8.91, or 8.9%.
The stock looks to have some solid momentum behind it — and if this market can continue to move higher, as I expect it to, GILD could do quite well. Overall, I think Gilead Sciences is a strong buy with an excellent long-term outlook.
With the recent sell-off, the market has given us an opportunity to pick up a great company while it’s on sale. I recommend entering this trade at $102 or better and setting a stop at $94.50.
Mike Turner is an engineer turned entrepreneur with more than 20 years’ experience in systems development and enterprise-level software applications and 15+ years in finance and stock market strategies. He is the founder of Signal Investor and Turner Analytics.
Mike’s background in finance, computer science and engineering provide a solid foundation for Signal Investor’s rule based trading approach. Turner Analytics provide members with access to the software Mike created and uses to make his stock, option and trading recommendations. Click here to get Mike’s unique take on stocks through technical and fundamental analysis.
