Sell Alert: Gilead Sciences (GILD)

By Jim Pearce • February 9, 2017

TRADE INSTRUCTIONS
Date: February 9, 2017
Name: Gilead Sciences
Symbol: GILD
Type: Close
Limit: Sell at market

TRADE RATIONALE
Gilead’s weak quarterly report released after the close on Tuesday pushed its share price down 10% yesterday, closing beneath our stop price of $68 so I am closing out this position. I admit to being flummoxed by GILD, since its management team refuses to take action while its share price has halved in value over the past eighteen months.

I was expecting the company to offset weak forward guidance on Hep-C sales by at least suggesting it is considering using its massive cash horde to buy its way into the fast-growing cancer immunotherapy space. Instead, its CEO only offered this wan and cryptic comment: “It makes it challenging for us to grow without an acquisition.”

From a longer term perspective I believe GILD will begin to recover once it makes such an acquisition, or at least announces its intention to do so, and for that reason I am going to keep this position open in the Personal Finance Growth portfolio a while longer to see if it does that prior to the next quarterly earnings report. But by rule I am compelled to close out any position in Systematic Wealth that closes beneath its stop price, so this position is being closed out a loss.

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02/09/17 ‐ 3:17pm ET February 9, 2017 at 3:17pm ET

Jim, I know officially this is a sell, but I’m hesitant to do it yet due to still possible upside as you allude to. Do you think it might be worth hanging on to for a bit longer or is there a bottom still to be reached? (obviously all conjecture of course)

Jim Pearce

02/09/17 ‐ 3:31pm ET February 9, 2017 at 3:31pm ET

Yes, and I am hanging on to it in my PF Growth portfolio since that is much longer term in nature. No idea where the bottom is either, but I think the company has to acquire a cancer immunotherapy company sooner or later to get analysts focused on the potential for growth in revenue from that area instead of just sitting on its hands. In fact, that is subject of my Mind Over Markets article that will be published tomorrow.

02/09/17 ‐ 3:32pm ET February 9, 2017 at 3:32pm ET

Thanks, Jim. I’ll keep an eye out for the article. I think I’m going to hold on for a bit.

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