There was a time when Gilead Sciences, Inc. (NASDAQ:GILD) shares represented a clear-cut growth opportunity. But is it possible that we are now looking at more of a value-trap stock? From a share price of about $22 in 2012 shares rose in the next few years to reach highs of almost $120 in 2015. However, as Gilead’s key hepatitis C franchise comes under pressure, there are concerns that the time where such profits could be realized is long gone. In fact, shares have been on a fairly consistent downwards trajectory since 2015 to their current price of $68.19.
Using TipRanks score system we examined six different elements of the market including expert sentiment, news and crowd wisdom and other data points usually only available to hedge funds, and combined them into one simple score. The result: investors can make a clear, data-based, decision of whether Gilead is a buy or a sell stock.
Wall Street Analysts– the consensus rating from all analysts is moderate buy. Interestingly, the 12-month analyst price target of $83.44 represents an impressive 22.36% upside from the current share price- while the price target from only the best-performing analysts is a 24% upside. Five-star Jefferies analyst Brian Abrahams reiterated his buy rating on GILD’s HIV franchise which saw strong growth in 2016: “Expect upside on increasing comfort on HIV franchise longevity given increasing dependence [of Gilead] on HIV” he says.
Financial Bloggers– TipRanks’ unique algorithms extract relevant stock opinions from thousands of financial blogs. Bloggers are a powerful investing resource: we recently discovered that in 2016 bloggers had a higher success rate on their buy picks than analysts. Here a whopping 92% of bloggers are bullish on Gilead, although there are top bloggers who are bearish on Gilead because 1) of price competition to its hep C franchise from rivals like Merck and Glaxo and; 2) the failure to use its $32 billion cash pile for strategic acquisitions.
Corporate Insiders– with a score of 4.5, the insider confidence signal is low. Indeed, in the last three months corporate insiders sold shares in Gilead worth $13.7 million. Only 9 days ago, for example, Chairman and CEO John Martin made an informative sale of $5 million of GILD stock. In fact, TipRanks reveals that in the last year there has only been one informative buy of shares out of a total of 28 insider transactions.
Hedge Fund Managers– analyzing 13F forms from the SEC reveals the latest activity of prominent hedge fund managers. In the case of Gilead Sciences, a strong sell trend is apparent. In the last three months hedge funds decreased GILD holdings by 267,600 shares, hence the very low score of 2.8. Ray Dalio for example slashed Bridgewater’s GILD shares by 75% down to just $5.75 million while Mario Gabelli cut Gamco’s GILD holding by 65%.
News Sentiment– from TipRanks’ new news page we can immediately see that the news on Gilead is far more bearish than the sector average which has a bullish/ bearish ratio of 74:26. The negative articles pulled up by TipRanks in the past week cover, for example, the fact that management has guided for 2017 hep C revenue of $7.5-9 billion, down almost 50% from its FY16 hep C revenue of $14.8 billion.
TipRanks Users– crowd insights are a fundamental feature of TipRanks’ award-winning Smart Portfolio platform. Tracking the 120,000 active TipRanks portfolios shows how Gilead stock is held by TipRanks users. We discovered that the average portfolio has Gilead as its eighth biggest stock (about 3.56% of the portfolio) and as the second biggest healthcare stock. However, the best-performing TipRanks portfolios i.e. the portfolios that generate the highest return, do not hold Gilead as one of their top stocks- either overall or in the healthcare sector.
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Gilead Sciences is just one of the 5,000 stocks tracked by TipRanks. You can perform the same market analysis on any of these stocks as we have done just now on Gilead. What are top Wall Street analysts, hedge fund managers or corporate insiders saying about your stocks? Is the news bullish or bearish and how does this compare to the sector average? TipRanks has the answers. See how your stocks shape up on TipRanks today.