Gilead’s stock is soaring on a technical breakout of the downtrend. Value investors have joined the party, too, as the hepatitis-C powerhouse remains undervalued on our discounted cash-flow process. When value and technical/momentum investors like the same stock, it often surges, and that’s what we’re witnessing. Gilead has become a Valuentum stock.
By Brian Nelson, CFA
It’s good to see the Valuentum stock-selection methodology working well.
The latest example is Gilead (GILD). For a long time, we thought shares of the hepatitis-C powerhouse were undervalued on our discounted cash-flow process, but we didn’t add it to the newsletter portfolios until shares broke through their defined downtrend more recently. Since the time we added shares to the newsletter portfolios (July 31), the price of Gilead’s equity has soared. Here is our bullish take, released August 3.
Gilead is but the latest example of how the Valuentum process combines value and technical/momentum to identify stocks that may be timely considerations. We believe that an undervalued stock that breaks through a defined technical downtrend may be poised to make one the strongest price advances, even on what might be considered modestly-positive news. In this case, we’re viewing Gilead’s planned purchase of Kite Pharma (KITE) with excitement, and it has reignited interest across the biotech space.
We expect to update readers on our thoughts of the proposed Gilead-Kite merger shortly, but we wanted to provide this illustration as yet another example of the efficacy of the Valuentum methodology in action. No methodology is perfect, but we think the Valuentum methodology makes a lot of practical sense. We include Gilead in both the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio.
To access Gilead’s stock page, please click the following link: /search-by-symbol/?tag=gild
To read our latest paper on the Valuentum Buying Index, please click here.
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