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jstratt

jstratt
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  • My Top Biotechnology Stocks For 2015 [View article]
    Thanks for an interesting article!

    I would comment that I do like the big players and own GILD, CELG, REGN, BIIB, AMGN. Your analysis would seem to do a respectable job of identifying those biotech companies poised to take over a larger share of the 1 trillion pharma business.

    On the smaller names, potential, pipelines and explosive growth areas are more important. RNA research, Genetics, personalized medicine, CAR-T for cancer and others as an example. For those which are riskier but also can provide 1000%+ returns the metrics used do not apply as well.

    Enjoyed the article!
    Feb 19, 2015. 11:00 AM | 4 Likes Like |Link to Comment
  • Procter & Gamble: 'The Most Significant Impact We Have Ever Incurred' [View article]
    I have owned PG for decades and still own some shares. It has provided a relative safe place to be in bear markets and used to provide excellent growth in good markets.

    What concerns me is that they have not grown or built anything of value in this century. The past 5 year return of 1.13% reflects my concern. Further, market fears have moved investors into PG so that it is trading at a 25 PE for projected earnings decline.

    The world is changing and pretending that PG is still a great investment is a mistake. Also I appreciate the article but I am unlikely to try to protect PG shares.
    Feb 19, 2015. 10:13 AM | Likes Like |Link to Comment
  • Gilead Sciences, Future Dividend Aristocrat In The Making [View article]
    Thanks for the article!

    I was trying to point out that lots of people only want to consider investing in Dividend Aristocrats, most of which ended their growth long ago. I own a number of Aristocrats, but I also try to get growth in my portfolios.

    GILD is an avenue for growth even if it wont be a dividend aristocrat any time soon. Nothing is wrong with looking ahead as well as behind. I am mixed on the dividend as I do like a growth company to feel they can achieve more with capital than the average yokel.

    Dont be afraid to consider Total Return in your investing. Huge quantities of investors here on SA will disagree with a religious fervor saying that the dividend is everything. I too like dividends but I also like growth.

    GILD is a wonderful growth company and I am a long term shareholder. Its growth in share price over the past few years spends just the same as a dividend should I decide to sell some day. Since March 2000 GILD is up 4500% and 342% over the past 3 years.
    Feb 19, 2015. 02:35 AM | 4 Likes Like |Link to Comment
  • Gilead Sciences, Future Dividend Aristocrat In The Making [View article]
    Wake up Doug, your dreaming!

    Few really care whether in 2040 GILD could become a dividend aristocrat.
    Feb 18, 2015. 09:59 AM | 5 Likes Like |Link to Comment
  • An Update On Gilead's 2015 Outlook [View article]
    This was in todays news

    Ray Dalio’s Bridgewater Associates revealed its top picks for the fourth quarter in a 13F Form filed with the U.S. Securities and Exchange Commission. Excluding its exchange-traded fund (ETF) holdings, the hedge fund’s largest position at the end of 2014 was in Gilead Sciences, Inc. (NASDAQ:GILD), with a stake of 537,300 shares.
    Read more at http://bit.ly/GUugpE
    Feb 18, 2015. 01:52 AM | Likes Like |Link to Comment
  • Celgene: Good Q4 2014, Outlook Is Good To Great Going Forward [View article]
    I enjoyed an excellent article!

    I own some CELG and would like to get more on a pullback.
    Feb 17, 2015. 02:17 PM | 1 Like Like |Link to Comment
  • An Update On Gilead's 2015 Outlook [View article]
    One other thing

    If I were to place a fair price on GILD today I would put $117 as a proper share valuation. Using $9.75 2015 EPS est X 12 PE.
    Feb 17, 2015. 01:35 PM | Likes Like |Link to Comment
  • An Update On Gilead's 2015 Outlook [View article]
    Thanks for an interesting article!

    I would just comment that while the author could be correct in revenue and EPS, a more reasonable bullish prediction could also move the share price to the same range.

    A more realistic revenue projection of $29.2 bil and EPS of $9.75 with a 14 PE gets $136 price. GILD is currently at a trailing 14 PE.

    a few other points

    GILD was at $107 when the ABBV news broke in Dec and it is in better shape now, than at that time.

    Just today I noticed that Ray Dalio's Hedge Fund had made GILD its largest holding and some other hedge funds are buying in.

    What GILD has been able to do for those afflicted with Hep C is amazing and the lack of side affects even more so. Were I to need treatment I would be more than reluctant to try anything else other than Harvoni/Sovaldi.
    Feb 17, 2015. 01:24 PM | Likes Like |Link to Comment
  • Gilead Fundamentals Appear Better Than The Stock 'Is Suggesting' [View article]
    I am not sure what you are referring to but I end up with higher revenue and slightly lower EPS for 2015 than your projections. I do agree revenue will build from a lower level during the year ahead.

    Regarding consensus I may be farther away on revenue and you are farther away on EPS. I should add that I liked the 19MM US dollar patient estimate. I had been looking an estimate of payable patients.

    In my mind I would consider 19MM US dollar patients / 700k patients treated per year = 27 years of Revenue. Not sure I would invest on that thesis but it is interesting.
    Feb 16, 2015. 01:36 PM | Likes Like |Link to Comment
  • Audit The Fed? [View article]
    I appreciate the article!

    My comment is just to state on the record that I am against an audit of the Fed. What concerns me is that the Fed was set up to be independent for good reason. If new legislation changes that, special interests may be able to start to sway Federal Reserve policy.

    I like what has been accomplished in the US since the Federal Reserve was founded. We changed Glass Steagall and look what that brought us. Should we do the same to the Fed we could expect similar results or worse.
    Feb 14, 2015. 05:49 PM | 2 Likes Like |Link to Comment
  • GE amends bylaws to allow proxy access for big shareholders [View news story]
    Interesting!

    This tells me GE is finally responding to pressure from major shareholders who are tired of a decade of horrible results. I suspect Buffett might be included as well.

    For investors this could be a sign that the status quo is no longer acceptable. Different views will be expressed in the board room resulting in change. Those views will be from long term shareholder entities that first saw the current price of GE shares reached in Dec of 1997.

    Just guessing they wont subscribe to the Immelt 20 year plan!
    Feb 14, 2015. 05:29 PM | 1 Like Like |Link to Comment
  • Gilead Fundamentals Appear Better Than The Stock 'Is Suggesting' [View article]
    I just want to add that Revenue seems to be the key to predicting GILD 2015 performance. The analyst average is $28.18 bil in revenue. Last quarter GILD had revenue of $7.3 bil which is a $29.2 annual rate. Several other things to consider include

    - GILD has little effective competition as ABBV is appearing to fizzle and should probably no longer be targeted to get 20% of the market, perhaps 5%.

    - GILD Hep C weekly data is strong up 10% last week as an example.

    - GILD this week indicated that approvals for Harvoni are coming much more rapidly than expected and they are well ahead of schedule both in the US and internationally.

    - Discounting is coming with guarantee of revenue volume. Discounting may be a misnomer as I would call it revenue enhancement agreements.

    Given all of the above I am using $29.2 bil as the 2015 revenue estimate. With respect to margins, GILD is suggesting close to 90% which is why I think revenue is the key item to consider.

    In short GILDs Hep C revenue should match the worldwide Hep C budget less a few percent for ABBV. The world budget is increasing significantly. I would like to hear a specific number on that. To offer a guess I would think perhaps 15 - 20%.

    For those interested I would encourage going to DoctoRx recent article and use his model with your own revenue forecasts to arrive at an EPS estimate.
    Feb 14, 2015. 04:52 PM | 4 Likes Like |Link to Comment
  • Comments On Gilead's Quarter And The Road Ahead [View article]
    I came back to this article because of the excellent financial estimates and wanted to try and come up with what I think is fair. Not conservative but fair as I always apply conservatism to my investments.

    Revenue DRx used 27.5 bil, analysts collectively are using 28.18 bil. I look at the run rate of $29.2 bil (7.3 bil rev 4Q X 4 = $29.2). Then I notice the growth rate including the just announced 10% increase in US weekly volume and GILD statements that agreements are moving faster than expected in the US and around the world. While I think revenue could be much higher I am reluctant to go above the run rate of $29.2 bil.

    Then I will assume the exact middle of GILDs gross margin estimate of 88.5% of $29.2 bil = $25.84 bil GM - expenses of 6700 ( higher due to volume increases) = $19.14 bil and tax at 19% = $15.50 bil / 1.5 bil shares = $10.33 EPS less .85c share to get to GAAP EPS = $9.48 GAAP EPS.

    So my difference is about 10% higher than DRx $8.62 GAAP EPS estimate basically due to higher revenue projected. Also while I like GAAP EPS I note that most investors are focusing on non GAAP EPS numbers in biotech or the $10.33.

    So based on a 2015 PE est of 13 x 9.48 = $123 Share price. Even though I would suggest that a 15 PE is a more fair valuation at $142 using this analysis.

    Surprisingly my estimates are very close to what analysts project for 2016 in Yahoo Finance as I believe those numbers are company reported EPS and Revenue, not GAAP numbers.
    Feb 14, 2015. 02:16 PM | Likes Like |Link to Comment
  • Gilead: No Reason To Panic Here [View article]
    DTM

    Interesting analysis! I am curious how you are coming to a 300MM decline in Gross Margin. I am not disputing it but would like to understand it.

    Also while I agree with your statement that the market sees GILD Hep C as peaking, each quarter of growth sort of raises the share price floor at this point. At least until a peak is actually reached.
    Feb 14, 2015. 12:00 PM | Likes Like |Link to Comment
  • Gilead: No Reason To Panic Here [View article]
    I thought I would add another thought to this article. I would prefer to invest in conservative stocks that have little risk and earn a significant return. Unfortunately that is not the world we live in. We have to weigh risks, and balance vs reward potential.

    So JNJ which has been a long time favorite (except during the Weldon years) has a 15 PE and minimal growth. GILD has a PE around 10 and more than quadrupled profits last year.

    People worry about pricing but really the big story is that GILD has such a great Hep C product line that payers couldnt budget enough resources to meet the demand. So this year the budgets are expanded and little effective competition exists. To me this presents the likelihood of excellent results in 2015. More countries approving the treatments with more budgeting across the world and little effective competition.

    So the investor in GILD has an opportunity for growth at an attractive valuation. Then consider that the $1+ trillion pharma market is transitioning to biotech solutions and that we are in the biotech century.

    I understand the concerns, a cure doesnt present long term patients, competition could pop up, too much reliance on Hep C, and prices dropping.

    At the end of the day you are getting an opportunity for growth and the kind of gains that growth can bring. In the late 1980s a relative invested in AMGN because it was similar to GILD with a low PE and opportunity for appreciation. His $20k investment has grown by about 25% annually for nearly 30 years. You can calculate the millions if you want.

    My point is the risk reward ratio seems attractive, and shouldnt you give yourself a chance to win with some part of your portfolio? Further if you do give your self a chance do you really want to try to trade in and out of it?
    Feb 14, 2015. 03:23 AM | 4 Likes Like |Link to Comment
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