Buying Gilead Sciences Under $66 Would Be a Steal

by Sam Collins | October 30, 2013 1:07 am

Gilead Sciences (GILD[1]) — This has been a favorite biotech stock of mine since I recommended it on Nov. 19[2], near $37. On Aug. 29[3], at just over $60, I reiterated my positive opinion of the stock, citing an increase in earnings estimates by S&P and saying, “New hepatitis C drugs and stabilization in market share for their leading HIV drug are expected to enhance future earnings, thus GILD should be high on the list of biotech stocks in investors’ portfolios.”

And on Sept. 19[4], I pointed out that, “Technically the stock is still in a clearly defined bull channel, but it has enhanced its potential by breaking through resistance at $64 from a ‘V’ formation. My trading target had been $67, but Wednesday’s bullish breakout boosted my target to $72.”

On Oct. 9[5], I suggested that the budget and debt ceiling struggle might provide an opportunity to buy GILD under $55-$56. But it only fell to $58.81, and hopefully some readers took positions under $60.

After the close Tuesday, the company reported Q3 earnings of $0.52 versus analysts’ estimates of $0.48, and revenues of $2.78 billion versus an estimate of $2.72 billion. After a pop from the excellent earnings, the stock could retrace back to support at $66, which is the new buy under price. The trading target is raised to $80.

GILD Chart
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Chart Key[6]

  1. GILD:
  2. on Nov. 19:
  3. On Aug. 29:
  4. on Sept. 19:
  5. On Oct. 9:
  6. [Image]:

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