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Top Stocks To Help Prepare For A Recession - We Recommend Gilead Sciences


  • We think a serious recession is more likely than not, with the signs of crisis and dislocation already showing themselves.
  • In big focus are rates, and the house view is that they'll have to rise more than the market expects to deal with supply shortages.
  • Disposable income could get meaningfully chopped as inflation is also supply side and harder to tackle, and much leverage has been introduced to the economy.
  • It's time to get defensive, thinking of beaten-down stocks with a margin of safety and products that won't decline much during a recession.
  • Our main pick is Gilead, but we also propose Imperial Brands and TeamViewer.
  • Looking for a helping hand in the market? Members of The Value Lab get exclusive ideas and guidance to navigate any climate. Learn More »

Maker Of Coronavirus Trial Drug Remdesivir, Gilead Sciences. Inc., Reports Positive Data Coming From Trials

Justin Sullivan/Getty Images News

The house view here is that while inflation, to the extent that it's supply side, is actually 'transitory', to nip the persistent component in the bud, rates will have to rise much higher than the markets currently expect, and indeed than pocketbooks

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This article was written by

The Valkyrie Trading Society is a team of analysts sharing high conviction and obscure developed market ideas that are likely to generate non-correlated and outsized returns in the context of the current economic environment and forces. They are long-only investors.

They lead the investing group Learn more.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of GILD, TMVWF either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (16)

No Guilt profile picture
You know what works even better than defensive stocks in a recession?

GILD is the last man standing, look at the carnage in bio land. GILD is holding strong and should be around 70-80+
lshiang profile picture
Gilead is undervalued and has great growth potential. However, its management team does not seem to be capable of acquisitions as BMY and/or AbbVie.
SpoiledRottenBrat profile picture
Biktarvy is Gilead’s top-selling drug while bringing in $8.6 billion in sales last year, of which more than $7 billion came from the US alone

COVID-19 treatment: Remdesivir now available outside the hospital
It's hard to bet on a company with flat revenue projections. I got in the last time it dropped below 60 and it worked out but since revenue increase kept dropping I sold when it hit 70. Now revenue increase is less than inflation, not good. I do like the nice dividend, what in their pipeline could accelerate revenue growth?
@i like stats KITE its essentially a replacement for Chemo. Let that sink in for a moment.
IF there is a coming recession and it is only going to go down less than other stocks why not wait, unless u r going for the dividend, till it slips
jimklawyer profile picture
$GILD has been down so long, I guess the low to mid $60s level suddenly looks like up. The only thing this stock has to recommend it is the dividend yield which is in the 4% range.

Although I've held a position for years, I cringe to think of the lost opportunity costs. I recognize that major pharma (think BMY, PFE and MRK) is a defensive mature group of companies, and for the most part there are very few really standout companies (maybe ABBV and definitely LLY). If not for the defensive nature and covered call opportunities, I might be close to calling the sector largely dead money.
Willow Street Investments profile picture
@jimklawyer Better than watching NFLX drop from $700 a share to $200.
@Willow Street Investments so true, now they can pick off these small bios if they want. GILD is the last man standing
No Guilt profile picture

JNJ and NVO have worked.

GILD has not.
Sell covered calls. GILD is a premier option killer.
SeattleGoldMiner profile picture
I agree that selling covered calls, combined with their dividend can provide a double-digit return in a stagnant market (or if the stock stays stagnant and I used to do this with GILD (and still do it with other stocks that I do not believe have "explosive" upside, like T, and BTI). However, I have recently bought back my calls and will just hold the stock as I believe there is a chance (albeit still small) that one of the companies that has had "windfall" profits (i.e. Moderna, Pfizer, Biontech etc.) could take a run at GILD and one might wake up to see that a tender for $85 (or whatever) has taken place. They have purchased so much IP in the past 8 years that has not converted to sales, but some of which still has high-level potential that I think they would be attractive. Someone can buy them for even $100/share, service their existing debt and still cover the cost of the acquisition with GILD's own cash flow. If I were 20 years younger I would be looking at them very carefully with that in mind, but fortunately have had my own leveraged buyout and was able to retire at 51.
mpcascio profile picture
That’s hoping they don’t piss away however many billions on nonproductive assets.
OR mgmt stock comp for no sh performance.
mpcascio profile picture
@JDoe20 Agreed.I'm all for good compensation but for goodness sake not for lousy performance and decision making.
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