With the market facing some choppiness as of late, many
investors are taking another look at some of the strong sectors
that have been leading the market for much of 2013. One such
segment is undoubtedly biotechnology, as this key corner of the
healthcare world has been a star performer for much of the year.
After all, many biotechnology ETFs have added more than 35% so far
this year-compared to a gain of close to 15% for the S&P
500-and remain well positioned for further gains to close out 2013
Yet while a broad sector approach may be one way to target this
impressive corner of the market, looking solely at some of the
large caps in the space may also be an interesting play. That is
because these large biotech firms have actually beaten out their
broader ETF counterparts by pretty wide margins too, suggesting
that these large cap firms are leading the way in the biotechnology
One such company that fits this bill is
Gilead Sciences (
, a massive nearly $100 billion market cap behemoth in the biotech
space. The firm has already added more than 60% so far this year,
and based on some of GILD's fundamentals, the company could
definitely see more gains to close out 2013 as well.
Gilead in Focus
Gilead is a California-based biopharmaceutical company that seeks
to develop and commercialize therapies for life threatening
diseases. The firm currently has a lineup of products for HIV,
liver disease, the flu, respiratory diseases, among others.
Furthermore, unlike a number of big pharma companies, Gilead has a
solid product pipeline, as a number of drugs are in Phase III,
while several more are in Phase II. Combine this with Gilead's
track record of buying out promising small caps, and the firm could
have a long term recipe for success.
Analysts are certainly buying into this story, as estimate
revisions are moving higher across the board for GILD. Current
quarter and next quarter figures saw three revisions higher, while
current year and next year estimates also saw three revisions
higher. Not a single estimate went lower in the past ninety days,
suggesting total agreement among covering analysts.
Thanks to this, GILD is now looking at a double digit earnings
growth rate for the current year time frame, coming in at 10.8%.
Meanwhile, earnings growth is now expected to be at 26.8% for the
next five years, eclipsing the strong 15% growth rate in the past
With the universal move higher in earnings expectations, which is
pushing the consensus estimate higher, the future is still looking
good for GILD, even with its recent price surge. That is why we
have assigned Gilead Sciences a Zacks Rank #1 (Strong Buy) and are
looking for further outperformance from this giant in the months
ahead as well.
Gilead also has a solid Zacks Recommendation of 'Outperform' and
there is positive sentiment swirling around the broader
biotechnology space. The industry rank is currently in the top half
of the market, while other large caps in the space have top ranks
Given the bullish perception of the space, along with the solid
drug lineup, and investors may continue to have a winner with GILD
to close out the year. The company is loved by analysts and it
could make for an interesting addition to a portfolio if these
positive trends continue.
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GILEAD SCIENCES (GILD): Free Stock Analysis
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