With summer approaching, most of the major brokerage firms are making some changes and additions to their firms top stock ideas. At one of the top regional brokerage firms, Baird, they are making some additions to the firm’s Focus Idea list that look like they make very good sense for investors searching for new ideas. Here are two ideas in the healthcare industry given by Baird analyst Brian Skorney.

Gilead Sciences, Inc.

Baird’s Brian Skorney offers Gilead Sciences, Inc. (NASDAQ:GILD) as one of his focus ideas for 2016, as shares appear undervalued, especially with a substantial cash reserve over $21 billion.

Skorney stated, “Though U.S. Hep C sales were taken to a new low in the first quarter, we continue to believe that recent script trends indicate a positive volume effect on loosening payer restrictions combined with higher discounts. Assuming pricing holds from here, Q1 results may have been a clearing event for the stock, which is currently trading at a P/E close to that of companies with bankruptcy risk. Gilead also has a PDUFA date set for June 28 for a third oral, single-tablet Hep C regimen, a combination of sofosbuvir/velpatisvir. If approved, it would mark the company’s first oral pan-genotypic Hep C.”

The analyst concluded, “Gilead is sitting pretty with a substantial cash reserve over $21 billion (as of end of 1Q16), which puts the company in the driver’s seat when thinking about a potential deal. With the ushering in of a new CEO, John Milligan, discussions around deal-making have come front and center as the company determines how to offset Hep C sales.”

Skorney rates Gilead stock an Outperform, with a price target of $135, which represents a potential upside of 56% from where the stock is currently trading.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Skorney has a yearly average return of 3.8% and a 50% success rate. Skorney has a 11.2% average return when recommending GILD, and is ranked #801 out of 3986 analysts.

Out of the 15 analysts polled by TipRanks (in the past 3 months), 9 rate Gilead stock a Buy, while 6 rate the stock a Hold. With a return potential of nearly 32%, the stock’s consensus target price stands at $114.42.

Achillion Pharmaceuticals, Inc.

Analyst Brian Skorney also included Achillion Pharmaceuticals, Inc. (NASDAQ:ACHN) in Baird’s Focus Ideas report. Skorney rates ACHN an Outperform with a $10 price target, which represents a slight upside potential from current levels. According to TipRanks.com, Skorney has a 11% average return when recommending ACHN.

Skorney opined, “Achillion’s odalasvir is currently in combination trials with J&J’s simeprevir and/or AL-335. Given that the current Hep C therapies have high cure rates at 12 weeks in most patients and eight weeks in some, success on the six-week endpoint would be a major improvement over what even Gilead can provide. Achillion presented a 100% SVR at six weeks in 18 patients for a combination of sofosbuvir (Gilead’s Sovaldi) and odalasvir last year. We expect the Phase 2a data readout in the third quarter, which should provide insight into the eight-and six-week cohorts, but note that J&J just initiated a Phase 2b study including two six-week arms, one triple combo and one doublet, which hints at positive Phase 2a results.”

Furthermore, “The company currently has nearly $443M in cash on the balance sheet, and management projects an $80M burn over 2016. In addition, Achillion stands to receive significant milestones throughout development of odalasvir for Hep C, from the J&J collaboration.”

Out of the 6 analysts polled by TipRanks, 4 rate Achillion stock a Buy, while 2 rate the stock a Hold. With a return potential of 4.6%, the stock’s consensus target price stands at $10.25.