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  • Seeking Alpha's Biotech Weekly: The Mystery Of Gilead Sciences [View article]
    In response to those authors that continuously extol Gilead's undervaluation, please look at analysts' 2016 projections. Most project essentially no growth in EPS except for financially engineered share repurchases. It doesn't matter what they did and are doing this year compared to last. It's next year and thereafter that count.

    It's the same story for Apple. Both rely on one product line for the majority of revenues and earnings. And both are currently fairly valued.

    I'm long Gilead, but not because I think it's undervalued. I'm just hoping that they will find a way to keep growing, either through M&A or internal development.
    Jul 31, 2015. 06:19 PM | 10 Likes Like |Link to Comment
  • Is Apple More Vulnerable Than Microsoft To Trends In Mobile? Probably [View article]
    Good article MB. As I've said repeatedly, Apple's day of reckoning will most likely come in late October when they will probably guide to a decline in YoY revenue for their first fiscal 2016 quarter. The recent weakness could be in anticipation of this.
    Jul 31, 2015. 12:39 PM | 8 Likes Like |Link to Comment
  • Gilead Beats And Raises Again: Why I've Stayed Overweight [View article]
    "Based on the current consensus estimates, analysts are projecting 34.4% EPS growth this year and 2.5% EPS growth next year."

    EPS growth next year and thereafter are the problem. And the small EPS growth next year is probably entirely from by buybacks. Until there is consistent organic growth, the stock could have difficulty going much higher.

    I cut my position in GILD after the post-earnings rally and maintain a reduced position hoping that I'm wrong.
    Jul 30, 2015. 06:18 PM | 1 Like Like |Link to Comment
  • Gilead Reports Another Blow Out Quarter [View article]
    Jonathan, as you pointed out, the Graham formula essentially indicates no growth over the next 5 years. That is the present conundrum and the reason for the current valuation. This will only change when there is more clarity on the sustenance of the HepC segment and growth of other products, either in their pipeline or from acquisitions.
    Jul 29, 2015. 07:27 PM | 1 Like Like |Link to Comment
  • Apple: The Key Trend Remains Intact [View article]
    Good article Stone Fox. You point out that Apple could reduce the 2016 share count by 5%, giving EPS an identical 5% ($0.46) boost. Since the 2016 EPS projection of $9.75 represents a 7% increase from 2015, only 2% is from organic growth. That's the problem holding back current performance. A 5% reduction in the share count would cost $35 B at today's share price, bringing total debt to $85 B. Yes, growing EPS by buybacks should boost the stock price if the P/E is not adversely affected, but it could be if there is not true organic growth.
    Jul 29, 2015. 07:13 PM | 2 Likes Like |Link to Comment
  • Gilead Beats And Raises: Thinking Through The Future Of Its Business And Its Stock Price [View article]
    You say: "It is rare that two of the great growth stocks of our time, AAPL and GILD, trade at significant discounts to the market (NYSEARCA:SPY), but I see no reason to look the proverbial gift horse in the mouth."

    They both have the same problem, resulting in the discounts: Overreliance on one segment (iphones and hepC). Increasing competition and market saturation/shrinkage don't auger well for this reliance. Both will have milestone years this year, but face little growth next year and thereafter. Until significant new sources of growth are firmly established, the market will continue to discount them.

    As the great Martin Zweig continually preached: "Don't fight the tape."

    Disclosure: Long GILD but relying too much on hope. No position in AAPL.
    Jul 29, 2015. 02:07 PM | 6 Likes Like |Link to Comment
  • Gilead Sciences Continues To Surprise [View article]
    The key issue is growth for 2016 and beyond, not what they will do this year. One can't base valuation metrics on past growth. Most analysts are projecting only a few percent revenue and EPS growth next year (and EPS growth is being helped by buybacks). The PEG is not really 0.50. It is more like 2.0 if future growth over the next several years is say 5% and the P/E remains at 10. A PEG of 2.0 does not suggest undervaluation. It is widely recognized that they need acquisitions to resume their strong growth trend.
    Jul 29, 2015. 11:01 AM | Likes Like |Link to Comment
  • Is Gilead A Buy Pre Earnings? [View article]
    Who knows what they will report tomorrow. I'm uneasy in that I'm putting too much reliance on hope. Like the Cowardly Lion in the Wizard of Oz said when he got frightened by the wizard: "I promise to be good....I promise to be good..." . And maybe that will result in a good report.
    Jul 27, 2015. 04:33 PM | 3 Likes Like |Link to Comment
  • Apple: Short-Term Estimates And Stock Fluctuations Mean Nothing For The Long Term [View article]
    Apple's revenue and EPS growth next year will only be mid single digit according to the 40+ analysts surveyed by Yahoo Finance. And half of the EPS growth will be financially engineered through buybacks. The PEG based on that growth is around 2, as opposed to the current 0.97 that you cite. After next year, who knows, but it is unlikely that growth will continually exceed the P/E and that the PEG will be less than 1.
    Jul 23, 2015. 06:45 PM | 6 Likes Like |Link to Comment
  • Apple: Fundamental Story Taking A Turn? [View article]
    A message for Apple bulls. Yes they are going to set many records for 2015. Revenues should come in around $234 B, up 28% from 2014. And EPS should come in around $9.13, up 42% from 2014. But what about the next few years? S&P is only projecting 4% revenue growth for 2016, and only 7% EPS growth (half of it from buybacks). Yahoo Finance polled over 40 analysts and they are likewise projecting an average of 5% revenue growth and 7% EPS growth for next year. These are weak numbers considering that most of the analysts are bullish! The first shot across the bow came this week with their weak F4Q15 revenue guidance. The second will come in late October when they give guidance for F1Q16. Guidance should be below F1Q15's record $74 B in revenues, prompting a selloff in the stock. Sheri Scribner of Deutsche Bank has it right. She believes that iphone sales have peaked. I don't know whether they have peaked, but they are certainly flattening out.
    Jul 23, 2015. 03:36 PM | 2 Likes Like |Link to Comment
  • Apple: 4 Was Not The Magic Number [View article]
    Good article Bill. I noticed that F3Q15 earnings/revenues declined to 0.215 from 0.241 for F1Q15 and 0.234 for F2Q15. This is presumeably from a lower margin iphone mix as well as from adverse currency issues. If this continues into 2016, it will be hard to show any EPS growth at all next year, even with continuing buybacks. And with difficult comps starting in F1Q16, revenue growth will also be difficult. The weak F4Q15 guidance presented yesterday reinforces this.
    Jul 22, 2015. 03:38 PM | 2 Likes Like |Link to Comment
  • Apple: Enjoying The Good Time While It Lasts [View article]
    Good article WestEnd. You couldn't have called it better. I have no sympathy for those that posted negative comments. Today's after-hours trading is just the first shot across the bow, setting in motion a decline that I believe will continue as it becomes more and more evident that 2016 will show little to no growth.
    Jul 21, 2015. 11:21 PM | 2 Likes Like |Link to Comment
  • The Impact Of Apple's Share Buyback Program [View article]
    There is no way that Icahn will be correct in his EPS forecasts of $10 for FY2015 and $12 for FY2016. Yahoo Finance's poll of 48 analysts currently shows a range of $8.73 to $9.50 for FY2015 EPS, with an average of $9.06. For FY2016, 47 analysts show a range of $8.19 to $11.21 with an average of $9.74. Icahn is way above the top of each range. Is he really a better analyst?

    I'm in the lower portion of the above 2015 estimate range. I see good results when they report this month, and similarly, good results for F4Q15. There is no doubt that 2015 will be a spectacular year. But what next? For 2016 I see little to no organic growth, with any EPS growth mainly from buybacks. The day of reckoning will come in late October, when they give guidance for F1Q16. I expect guidance to be below F1Q15's results, and see a selloff in the stock at that time, if not sooner.
    Jul 15, 2015. 05:35 PM | 4 Likes Like |Link to Comment
  • A Pre-Earnings Look At Gilead Sciences [View article]
    The analyst EPS estimates for 2015, 2016, and 2017 show why Gilead is trading at only a 10 P/E multiple. Essentially no EPS growth for 2016 and only 7% growth for 2017. And that's with buybacks. What Gilead needs to do is obvious - make strategic acquisitions and/or deals. Vertex or others. Just look at Celgene which has a much smaller market cap - first investing in Juno and now Receptos as I write this.
    Still long GILD, but relying too much on hope.
    Jul 14, 2015. 05:44 PM | Likes Like |Link to Comment
  • Gilead Will Keep On Rolling [View article]
    Bret, I hope you're right. My concern though is the flat earnings analysts are projecting for next year. And after that, who knows? If there is little earnings growth YOY 2016/2015, the PEG is very high, making the stock not cheap despite the 10 P/E. Still long Gilead, but concerned that I am relying too much on hope.
    Jul 9, 2015. 11:30 AM | 3 Likes Like |Link to Comment