GILD

Target-CVS Agreement: What It Really Means

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Image Source: Mike Mozart Target (TGT) and CVS Health (CVS) announced an agreement June 15 in which CVS would acquire, rebrand, and operate Target’s pharmacies and clinics for the price of approximately $1.9 billion. After the deal closes, CVS will operate 1,660 of Target’s pharmacies in its stores under the CVS/pharmacy brand name. The nearly 80 Target clinics involved in the deal will be rebranded as MinuteClinic, and CVS plans to open up to 20 new clinics in Target stores, part of the CVS/minuteclinic goal to operate 1,500 clinics by 2017. Target and CVS also plan to open five to ten small, flexible store formats that will be branded TargetExpress and include a CVS/pharmacy. After Target’s recent Canada debacle, we … Read more

Gilead Price-to-Fair-Value Convergence Underway!

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It’s a bird… It’s a plane… Nope, it’s Best Ideas Newsletter Portfolio holding Gilead Sciences (GILD) flying high in the months of May and June. For those that are new to the Gilead “story,” shares registered a 10 on the Valuentum Buying Index in September of last year, and while the near term has been a bit rocky, the company is now off to the races. The pharma giant was trading just over $100 at the end of April, and now, 10 days into the month of June, its share price is over $117 and climbing, a cool 17% move. Despite news being sparse on the company during the past few weeks, there are certainly a number of factors driving … Read more

The Invincible S&P 500?

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This is the performance of the S&P 500 (SPY) since the March 2009 panic bottom. It’s incredible, to say the least. US stocks, as measured by the S&P 500 have more than tripled since the doldrums of the Financial Crisis, and for those of us that lived and breathed the markets during every day of the Financial Crisis, the lack of volatility and the ongoing, steady advance seemingly month after month during the past 6-plus years have been incredibly peculiar–and perhaps contradictorily–less-than-comforting. Any market that sets prices on the buying and selling behavior of a wide-variety of participants with differing views shouldn’t be so coordinated and one directional. It seems unnatural, or at the very least, unusual. While others are … Read more

May Dividend Growth Newsletter to Be Released Monday, May 4

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Twitter (TWTR) and LinkedIn (LNKD) – perhaps two of the most “un-ownable” stocks on the market today offered terrible outlooks in their calendar first-quarter reports. Frankly, we’re not surprised. Wall Street is off its rocker with their valuations. We put the largest fair value bands in our coverage on these two stocks, and we wouldn’t touch either one with a ten-foot pole. Investors are reeling. LinkedIn is down ~20% on Friday, and Twitter has dropped more than 20% from earlier this week, to under $40 per share. We’re not harping on these stocks because they are speculative and unproven. That’s a given. We’re bringing this to your attention because we just don’t see the investment case in either one. Their normalized … Read more

The Savvy Strategy of Gilead’s Management

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Gilead investors’ only thing to fear is fear itself? I never thought I would refer to the first inauguration speech of Great Depression and World War II President Franklin Delano Roosevelt in explaining the situation with Gilead Sciences (GILD), but I just did. The psychology of the markets is perhaps the most difficult to assess, and I can almost feel portfolio managers behind their multi-screen terminals just scratching their heads, saying “Am I missing something?” To them, I say “No, you’re not.” Gilead’s shares are trading at bargain-basement levels, and its fourth-quarter results were stellar. Yet, to their dismay, they will wake up tomorrow to find Gilead’s shares trading lower than the day prior. It is almost as though the … Read more

4 Opportunistic Stocks To Consider Buying in 2015

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The Valuentum Buying Index (VBI) is a philosophy that considers the valuation of a company and the likelihood that a company’s stock will converge to a cash-flow derived fair value estimate. The VBI accepts the view that value is based on the sum of a company’s future expected discounted free cash flows and the excess cash on its balance sheet, while acknowledging that market participants must eventually agree with a firm’s underpricing (and buy the stock) in order to drive the stock’s price to fair value. An underpriced stock with no buying support is not poised to generate good returns, nor is an overpriced stock with good momentum as it will eventually succumb to panic selling once euphoria fades. Stocks … Read more

HCV Competition Not New “News” for Gilead

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Let’s set one thing straight. On a fundamental basis, biotech firm Gilead Sciences (GILD) is performing quite well, contrary to what its recent stock price move might suggest. Prescriptions for the firm’s Harvoni and Sovaldi hepatitis-C drugs continue to track slightly ahead of projections, and we would expect a slightly stronger-than-forecast fourth-quarter report as a result. In coming periods, we look forward to positive management commentary that speaks to the strength and sustainability of the firm’s hepatitis-C franchise (about half of Gilead’s sales). Any commentary, in light of the recent uncertainty and growing competition in the hepatitis C market, will be reassuring for investors that have been anxiously pursuing tax-loss selling and profit-taking in Gilead’s shares the past few weeks. … Read more

Stocks Catapult Back To Near All-Time Highs

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It appears that we may get a Santa Claus rally after all. Call it window dressing. Call it drinking at the Fed’s punch bowl. Call it what you will. But the Dow Jones Industrial Average (DIA) polished off its biggest two-day gain in six years to propel itself back to near all-time highs again. The S&P 500 (SPY), shown above, is now within throwing distance of setting new record ground, and spirits remain high as we approach the Christmas holiday and New Year. Collapsing prices at the gas pump, though highlighting risks to global economic growth, may be helping to spread the holiday cheer. For clarification, we continue to be optimistic about the future returns in the newsletter portfolios, but … Read more

Gilead Sciences: The Going Rate for a Stock Analyst These Days?

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Image Source: September 2014 Best Ideas Newsletter, page 9 If there is one thing that I would encourage all of you to do when looking at your holdings in your portfolio it would be to look at their long-term charts. There is nothing that provides greater perspective than looking at historical performance and assessing when price moves may just be reasonable profit-taking (and/or risk-mitigation) versus something more serious. You don’t have to be a highly-trained technician to know that a 5% pullback on a stock that has more than quintupled is a meaningless move. Case in point: Gilead Sciences (GILD). I want you to check your stocks every day, if you feel the need, but you shouldn’t make assessments on … Read more

Valuentum Update – Post-Thanksgiving

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Hi members, We hope you had a long and happy holiday weekend with your families! I wanted to touch base today for a variety of reasons. I received a few emails over the holiday weekend regarding a couple of the newsletter portfolio holdings that are trading down with the markets.  Nothing out of the ordinary, but for those who are new to the stock market, this may be a bit startling and confusing. If you didn’t know already, we target the best ideas to converge to intrinsic value over a 12-24 month period, and sometimes longer, if market conditions do not cooperate. First, you should be aware of the collapse in crude oil prices (1). As it relates to the … Read more