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  • The Market Is Wrong About Gilead Sciences' Growth Prospects [View article]

    I wanted to thank you for the observation on the accuracy of the high estimate from analysts.

    Regarding Plumberb comment I disagree as follows

    1) The market is likely larger than predicted as GILD suggested but not double. 4MM sounds reasonable
    2) Most HCV infected are baby boomers and quickly passing to Medicare
    3) It makes sense to treat high need first. Since the cost of HCV is in the hundreds of thousands per HHS a cure at $50k is the best approach
    4) The DHHS program to get 66% of HCV diagnosed by 2020 will provide a consistent flow of patients.
    5) Demand isnt based on lack of patients but on budgets. Budgets are increasing.
    Oct 29, 2015. 04:26 PM | Likes Like |Link to Comment
  • The Market Is Wrong About Gilead Sciences' Growth Prospects [View article]

    I have to admit I was less than thrilled with the thought that GILD may have borrowed money to buy back shares.
    Oct 29, 2015. 04:07 PM | 1 Like Like |Link to Comment
  • Amgen: Q3 Review; Comments On Repatha And Corlanor Launches And On The Pipeline [View article]
    I always find value reading DrX articles.

    My view over the past year has been quite bullish on AMGN and remains so. I would just note that

    - AMGN profitability per $1 of sales has risen substantially as it has slashed costs and it continues
    - Repatha could be worth almost as much as the rest of the company ie CVS suggested $100 billion PCSK9 sales potential. Also REGN is splitting profits 2 ways and may end up paying AMGN on its sales of Praluent.
    - The number of AMGN double digit growth products is amazing.
    - The pipeline of 46 drugs with 12 in phase 3 is robust
    - AMGN gives detailed forward guidance and a 5 year plan of 12% expected growth and they are ahead of target.
    - a 12% growth company should be worth a 20 PE not a 16 PE.
    - Biosimilar unit looks promising with $3 billion sales projected
    - Legacy drugs are a risk but so far better than expected performance.
    - announced a 27% increase in the dividend expected in 2016

    Perhaps I am a little over optimistic but some good Repatha results next quarter and $200 could be in the rear view mirror. I do have too much AMGN after it traded at a 14 PE a few weeks ago.
    Oct 29, 2015. 12:55 PM | 4 Likes Like |Link to Comment
  • Gilead's Q3 Beats, The Street Shrugs: Why I'm Happy To Stay The Course [View article]

    I dont disagree with your view on Milligan.

    That wasnt what was communicated however. Cory K asked about M&A activity. Milligan answered with a scorn in his voice "Well that assumes we have been making offers" like it was the last thing he would consider.

    I do appreciate your many excellent contributions.
    Oct 29, 2015. 11:52 AM | Likes Like |Link to Comment
  • The Market Is Wrong About Gilead Sciences' Growth Prospects [View article]
    I have chilled out since earnings and I am happy to be a shareholder of GILD. GILD management has plenty of opportunity to raise the valuation and I will offer some thoughts and suggestions.

    - The HCV business is valued at about a 5-6 PE

    Management could help investors and analysts understand the long term value by offering reasonable long term revenue and profit expectations. It would be hard to offer a more negative view.

    - The pipeline is a black box that currently doesnt have much valuation

    Management could share how they look at the pipeline. What its value is and why they have say 20 drugs in the pipeline vs 50 drugs. How much revenue are they targeting to get from the pipeline. You cant value what you cant see.

    - Communication with shareholders ( estimates, future, goals )

    GILD shares nothing with shareholders. The estimates are probably based on what it takes to get a maximum option payout for management. Since they are unrealistic and low, GILDs estimates only serve to injure company value.

    When GILD does communicate in earnings calls you get answers like the one from Norbert B in the 3Q call. 1st question asked about GS-9883 Does it have any advantages over the current drugs? GILD Answer No not really?

    - Forward guidance

    GILD told investors in the 3Q call to expect current sales to continue and that the early year bulge in patients was over. So GILD guided to no growth or decline and doesnt offer a longer term view. I suspect they are sandbagging as usual.

    All of these things create a very undervalued stock. So shares are likely to rise in my view.
    Oct 29, 2015. 11:34 AM | 2 Likes Like |Link to Comment
  • Gilead Sciences Beats Expectations Again [View article]
    I think it is time for me to put GILD out of my mind until something changes.

    It is a great value and I will hold on to it. At the same time nothing much seems to change for now. Even studies suggesting the number of patients could be double what is expected doesnt seem to matter right now.
    Oct 28, 2015. 02:01 PM | 3 Likes Like |Link to Comment
  • Gilead's Q3 Beats, The Street Shrugs: Why I'm Happy To Stay The Course [View article]
    Thanks for another great article!

    I couldnt agree more. GILD has room to run when the right catalyst comes along. So I will just put on my $12 x 12 PE = $144 sometime in the next year hat, and wait.

    I was disappointed at how anti acquisition John Milligan's comments were and the guidance. The Focus study suggesting an effective doubling of the incidence of HCV definitely was the most bullish point.

    I continue to think the best potential for increasing share price is an acquisition that would diversify revenues. One has to ask if even $4.00 4Q EPS would cause the stock to rise if it is based on HCV revenue.
    Oct 28, 2015. 01:40 PM | 1 Like Like |Link to Comment
  • Next Quarter, Next Earnings Beat For Gilead [View article]
    GILD once again gives everybody what they expect.

    The bulls of which I am one look at PE and quarterly EPS growth and we were happy. We believers know that GILD management lowballs any estimates. We look at Japan, TAF, and GILD growth history.

    The analysts which direct flows of funds looked at the future and imagined specific products and earnings. GILD told them not to expect growth ahead saying we expect the current revenue flows to continue. The peak warehousing of patients from earlier in the year is over GILD leaders said. To them GILD said no more growth and we arent making an acquisition.

    Really all GILD did was hold up a mirror and ask investors how they feel.
    Oct 28, 2015. 10:48 AM | 2 Likes Like |Link to Comment
  • My Take On Gilead Post-Earnings [View article]
    I forgot to add as a key reason the stock is lower after earnings that guidance while raised to $30-$31 billion suggests lower 4Q revenue.
    Oct 28, 2015. 09:43 AM | 5 Likes Like |Link to Comment
  • My Take On Gilead Post-Earnings [View article]
    Excellent article!

    I feel GILD comes out of 3Q earnings a more valuable company and agree with the $12.50 2016 EPS.

    Why the stock is down after hours

    - cash flow came in lower than expected
    - Milligan seemingly scorned the thought of an acquisition
    - no additional pipeline revenue visability
    - HCV revenue appeared to non believers to have peaked in US

    Bullish point

    A question was asked about HHS wanting 66% of patients diagnosed by 2020 and would that happen. GILD responded that a Focus study group is finding in 18 different test areas a much larger number of patients than expected. About twice the number of patients expected.

    Is the size of the HCV market significantly larger than currently expected?
    Oct 28, 2015. 09:30 AM | 7 Likes Like |Link to Comment
  • IBM: Use Revenue Recognition Panic As An Advantage [View article]
    a few thoughts...

    I dont buy stock in companies that are being investigated for accounting fraud.

    Anyone who has listened to IBM management in earnings calls would distrust anything they say.

    For the SEC to open an investigation means they likely received an allegation. They then would have likely asked for documents and found evidence of a material problem.

    Yes almost anything could be argued to be not material in a $80 billion revenue company. Still the SEC wouldnt likely investigate something under $50 Million.

    With IBM, accounting irregularities or investigations are not an unusual occurrence. It happened in 2002 when a $300MM gain from a sale was reported helping them meet estimates. In 2007 a $7MM fine to settle a fraud charge over sham transactions with Dollar General and a cease and desist order. In 2013 revenue recognition in Cloud computing was investigated.

    In a move with lots of irony IBM is reportedly trying to buy the Weather Channel to add to its cloud business.
    Oct 28, 2015. 12:34 AM | 2 Likes Like |Link to Comment
  • Why Commodities May Be Ready To Drop Again: Implications For Bonds And Biotechs [View article]

    So considering your fascination with bonds and the potential for 1% 10 yr, and 2% 30 yr yields I must ask what kind of a return are you expecting?

    It would seem a significant period of heavy deflation would be required to force someone to want to commit money for 30 years at a 2% return. Anything can happen but isnt a dollar an immediate treasury note offering better utility and less risk?

    I am thinking a traditional portfolio mix might offer you both better risk and better reward opportunity. No matter how good an investor is, markets take unexpected turns.
    Oct 27, 2015. 07:01 PM | 1 Like Like |Link to Comment
  • Gilead: The Pharm Will Deliver On Tuesday [View article]
    Listening to the GILD conference call they suggested a stabilization of revenue trend. Based on GILD expecting revenue trends to continue from the end of this year into next year my estimate for 2016 is $32-$33 bil revenue and $12.50 EPS.

    The stock probably dropped after hours because GILD continues its official guidance in a more conservative manner of $30-$31 bil. That implies decreasing sales in the coming quarter.
    Oct 27, 2015. 05:40 PM | Likes Like |Link to Comment
  • IBM discloses SEC revenue-recognition probe; shares -3% [View news story]
    I am not surprised.

    IBM does everything it can to deceive shareholders. When I held IBM shares I felt it was just one lie after another.

    - We arent borrowing to buy back stock
    - All our revenue loss is currency related
    - Our undefined cloud revenue is growing
    - We are a cloud company
    - Smarter Planet
    - Watson and game shows
    - We are growing
    - If it wasnt for restructuring everything would be great

    As an investor wouldnt you expect IBM to disclose an SEC investigation when they meet with shareholders?

    IBM it BOD and CEO consider you as fools if you an investor. If you invest in IBM you can expect to get surprise after surprise dropped in your lap and then explained away as nothing.
    Oct 27, 2015. 03:16 PM | 10 Likes Like |Link to Comment
  • Why Commodities May Be Ready To Drop Again: Implications For Bonds And Biotechs [View article]
    Great article DRx

    I look at Oil and the history of Oil crashes and since December 2014 when a crash became apparent I sold out of commodities. My view at that time and since has been that after 3Q or 4Q earnings a full capitulation will occur.

    It only makes sense that banks will have to stop lending to every energy and mining project imaginable and take steps to reduce their risk. When that happens a very chilly wind will blow through markets.

    At the same time I have invested more in biotech and recently industrials seemed way to low. If I can get a 4% yield on a good stable growth industrial paying out 50% or less of earnings in the dividend I have taken those opportunities.

    We likely have a difficult period coming but I dont judge that it will be like 2008 and I always remain mostly invested. I am waiting patiently for some quality Oils at a great price that I can buy for great 10 year returns.

    One of my concerns is that great biotech earnings get overshadowed by moves in the rest of the market.
    Oct 27, 2015. 01:10 PM | Likes Like |Link to Comment