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  • Apple Gross Margins Impressive And Sustainable  [View article]
    Could the slowdown in iphone sales be a result of their high margins? Time will tell.
    Feb 7, 2016. 11:59 AM | 2 Likes Like |Link to Comment
  • Updating My Price Target On Gilead Sciences For 2016  [View article]
    I think that all analyses that I'm aware of have underestimated the potential impact of Merck's Zepatier.
    Feb 5, 2016. 04:56 PM | 2 Likes Like |Link to Comment
  • Gilead: Competition Worries Are Overblown  [View article]
    There is no telling how much discounting Merck will offer with Zepatier, since there is an enormous margin to deal with. They could discount heavily and go after market share to gain as much real world data as they can in as short a time as possible. Price will be a major issue with PBMs. That would not be good for Gilead.
    Feb 5, 2016. 09:17 AM | 2 Likes Like |Link to Comment
  • Gilead May Represent A Rare Value Opportunity In Biotech  [View article]
    Your 9% top line growth for 2016 is incorrect. Gilead has guided to $30-31 billion in revenues this year, a 5-8% decrease from 2015. And I expect that revenues will continue to decrease thereafter. It doesn't matter that a liver transplant costs $700,000+. What matters is what the competition will charge. Competition from AbbVie has so far driven Gilead's $80,000+ price for Sovaldi/Harvoni down to the $50,000 level. But there were problems with AbbVie's Vikeira pak, basically allowing Gilead a monopoly. You don't even mention Merck in your report. They just received FDA approval for Zepatier, which will be a much more formidable competitor, leading to further declines in drug pricing.
    Feb 4, 2016. 04:29 PM | 6 Likes Like |Link to Comment
  • Gilead Sciences Has Surprised Again  [View article]
    If they meet their 2016 revenue projection, that would mean a 6% drop from 2015. But with buybacks, they could reduce the share count to around 1.27 billion from the current 1.44 billion, a 12% decrease. So EPS would increase 6% to hopefully support the stock price. I don't know how one can figure how much Merck could cut into Gilead's market share if they discount heavily from their 54K pricing. It seems 2017 figures would only be a guess at this point. If revenues continue to decrease, it would not be good.
    Feb 3, 2016. 09:27 AM | 1 Like Like |Link to Comment
  • American Capital Agency: Disaster  [View article]
    It was trading at $28-30 three years ago, not a year ago.
    Feb 2, 2016. 09:32 AM | 4 Likes Like |Link to Comment
  • Valero Is Surprisingly Cheap  [View article]
    A good article and a good discussion.
    Feb 2, 2016. 09:24 AM | Likes Like |Link to Comment
  • Is It Time To Buy Or Sell Shares Of Gilead Sciences  [View article]
    The market has only priced in moderate price cutting from Merck. If there is stronger price cutting, there would be substantial downside risk for Gilead.
    Feb 1, 2016. 06:41 PM | 1 Like Like |Link to Comment
  • What To Expect From Gilead Sciences' Earnings Report  [View article]
    High earnings growth prospects? You must be kidding. The reason for the stock trading the sickening way that it is, is because earnings are starting a long slide. I expect Merck to offer more than the 10-20% discount people expect, and that will force Gilead to increase its discounts. With their one pill a day offering, Merck is a more formidable competitor than AbbVie ever was. Scripts will pick up as PBMs relax their requirements, qualifying a larger patient pool. Buybacks will bolster EPS somewhat, but the $12 or thereabouts that they earned last year will be somewhat lower this year, and perhaps a lot lower next year and subsequently. The analysts were wrong with Apple and will be wrong with their overoptimistic projections for Gilead.
    Feb 1, 2016. 01:54 PM | 3 Likes Like |Link to Comment
  • Gilead Sciences: Don't Get Your Shorts All Twisted Up  [View article]
    I think that there is a reasonable possibility that Merck engages in a price war to gain market share. There is negligible cost of production for any of the HCV drugs, and revenues per patient could easily be cut in half. The benefit to Merck would be political as well as possibly more profitable than if they went in with only a 10-20% discount for a smaller market share. The market is underestimating this risk. Needless to say, the outcome for Gilead would be dire should this scenario occur.
    Feb 1, 2016. 11:10 AM | Likes Like |Link to Comment
  • Why Gilead's Earnings Will Not Matter  [View article]
    I have to agree with PaulL. I think Merck is going to go for market share and cut pricing substantially. Maybe even less than 20K/patient. Think of the positive press they'll garner by making an HCV cure affordable for so many. Gilead shouldn't have idolized Gordon Gecko of Wall Street fame (the Greed is Good guy).
    Jan 31, 2016. 06:00 PM | 1 Like Like |Link to Comment
  • Situation At Apple Might Be Similar To Microsoft At The Turn Of The Century  [View article]
    I expect Apple to earn $50 billion +/- this year (less than 2015's record $53 billion) and around the same for the next several years with little or no growth. Saturation and competition in smartphones should be offset by growth in other product lines. If this scenario plays out, earnings alone would have an NPV of $500 billion. Add to this repatriated cash less debt of around $120 billion, and you get a current fair value of $620 billion, or $112/share. Buybacks at 3-5% of float will probably continue indefinitely and increase the stock price by that percentage (but not the market cap). With the dividend which will likely be continually increased, you have a solid investment, but not one that's going to rocket up to anywhere near the $170-$200 targets proposed by some analysts anytime soon.
    Jan 30, 2016. 09:54 AM | 3 Likes Like |Link to Comment
  • Gilead: Detailed Insight And Interpretation Behind The Headlines: Should You Be Scared?  [View article]
    Jmor1 - If you don't want it to stop going down I suggest you close your eyes, put your hands together, and repeat: "I promise to be good, I promise to be good...."
    Jan 29, 2016. 05:52 PM | 6 Likes Like |Link to Comment
  • Gilead: Detailed Insight And Interpretation Behind The Headlines: Should You Be Scared?  [View article]
    JF - So if it went down to where you bought it at you would be OK with that?
    Jan 29, 2016. 05:50 PM | 2 Likes Like |Link to Comment
  • Gilead: Detailed Insight And Interpretation Behind The Headlines: Should You Be Scared?  [View article]
    I think Merck gives larger discounts than the 10-20% talked about to entice PBMs to go with them. Gilead can stand fast on pricing (like Apple with their iphone pricing) since they have the experience, but will lose market share. I don't expect them to match Merck's discounted pricing. I expect Gilead revenues to decline for several years, but buybacks should bolster EPS somewhat. Their chart looks awful. I think the stock price continues to move lower.
    Jan 29, 2016. 05:43 PM | 2 Likes Like |Link to Comment
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