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Gilead Sciences, Inc. (NASDAQ:GILD) is a biopharmaceutical stock which plunged over 14%. This drop was in response to news of viral relapse in a sample of patients who received Gilead's Hepatitis-C treatment, which is currently being developed. Is this price movement enough for value investors to jump upon?

No. On the contrary, investment returns are ultimately dictated by financial performance, not price movements and events. Regardless of interest in GILD, its earnings and future cash flows will determine its value. The future financial potential of a stock can be gauged by using financial metrics to determine how cheaply a stock is priced, its ability to weather hardship, and its growth potential.

As alternatives to GILD, consider the following stocks with strong track-records and solid credit scores:

Ticker

Company

Industry

10-Year Average ROE

Altman Z-score

AOSL

Alpha & Omega Semiconductor, Ltd.

Semiconductor - Specialized

9.8%

3.86

ATW

Atwood Oceanics, Inc.

Oil & Gas Drilling & Exploration

15.3%

4.23

BPI

Bridgepoint Education, Inc.

Education & Training Services

10.8%

7.73

BRLI

Bio-Reference Laboratories Inc.

Medical Laboratories & Research

20.1%

7.50

CF

CF Industries Holdings, Inc.

Agricultural Chemicals

11.9%

3.29

CPLA

Capella Education Co.

Education & Training Services

11.5%

9.57

EZPW

EZCORP, Inc.

Specialty Retail, Other

14.1%

13.44

MED

Medifast Inc.

Specialty Retail, Other

27.8%

10.27

GILD

Gilead Sciences Inc.

Biotechnology

19.0%

5.95

Like GILD, these alternative stocks are all categorized as "safe" according to the Altman Z-score,* indicating that they are not considered bankruptcy risks. Moreover, the average 10-year equity returns demonstrate these firms have grown shareholder wealth at respectable annual rates. It is clear from these two metrics that each of these ten alternative stocks is a "high" quality stock capable of weathering bad times and delivering positive long-term results.

What's more, these stocks are cheaper and have better growth prospects than GILD:

Ticker

P/E

P/S

P/B

EPS growth past 5 years

EPS growth next 5 years

AOSL

11.46

0.75

0.99

67.5%

20.0%

ATW

10.63

4.4

1.75

24.9%

15.0%

BPI

8.63

1.5

4.17

67.2%

21.7%

BRLI

15.19

0.98

2.89

24.9%

18.8%

CF

9.67

2.05

2.74

48.5%

14.8%

CPLA

11.46

1.39

3.49

33.6%

15.7%

EZPW

11.76

1.75

2.25

28.5%

15.0%

MED

12.15

0.93

3.81

52.1%

17.5%

GILD

13.24

4.91

6.02

24.6%

14.3%

Even after Gilead's fall, these stocks are cheaper than GILD based on lower price multiples. What's more, they have better growth prospects according to analyst projections and growth trends. Rather than restrict yourself to concentrated investments in one notable stock like Gilead, consider a diversified mix of these ten securities as a more attractive alternative.

*Please read the article disclaimer.

Source: 8 Safe Alternative Investments To Gilead