Gilead reported earnings after the close on 2/3/15 and shares dropped approximately $10. GIlead reported:
- Revenue growth of 134% yoy
- EPS growth of 363% yoy
- Average HCV discounts of 22%
- Initiated $1.72 annual dividend
- Authorized 5 year $15B stock buyback program
And 2015 guidance of:
- $26-27B in sales
- 87-90% gross margin
- HCV discounts of 46%
- Approximately 15% EPS growth
In my opinion $GILD shares are even more attractive now that the company will begin paying a dividend and has authorized a buyback that currently equals around 10% of the outstanding shares. There seemed to be a lot of concern among analysts about the projected HCV discount of 46% next year, but I believe Gilead management generally issues conservative guidance. Even if 2015 guidance is dead on accurate, the stock is trading at a multiple of 13.3 with projected earnings growth of 15% for a PEG of 0.89.
If shares drop any further this week, I may add to my position.
Seeking Alpha has some excellent articles that go in to much more detail on $GILD
I have found Bret Jensen's articles on $GILD and many other securities extremely helpful. Here is one of his most recent.
Disclosure: The author is long GILD.