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Is Gilead Science(GILD) Stock ready for Another Up Leg?

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Gilead Science ( GILD) is one of behemoth biotech to worth to watch. Especially after recent move up from  last 2 years lows and its acquisition to Kite Pharma  for its oncology business.

Some facts regarding Gilead science that quite fascinating and this stock should be prime target for value investing. Some of the facts regarding Gild worth to know:

1 P/E Ratio:

Gild is one of the biotech stock with insanely low P/E ratio. Currently Stock P/E ratio is  around  9. We know average biotech stocks P/E ratio is more than 73( Source: Morning Star).

Even last 5 year P/E ratio for gild is 20.Broad market index S&P 500 P/E is 21.Gild is definitely a  steal for value investor considering the P/E ratio only.

2.Price to Sales Ratio(P/S):

When we look at the P/S ratio, Gild  also offers very attractive opportunity. GILD P/S ratio is only 3.9.(Source: Morningstar).  Biotech Industry ‘s average P/S ratio is  7.1

 

3.Dividend:

GILD is also attractive for dividend investors. This stock current dividend yield is 2.5% , which is higher than S&P 500 dividend yield.  Biotech industry average dividend is .7% only.

Gild dividend yield is more attractive than other biotech stock.

4.Acquisition of Kite Pharma:

GILD recently acquired a major player in oncology field. Many experts believe this could bring the Gild back to 2012 to 2014 growth track. During this time Gild growth was so impressive that stock price   increased to sixfold in 3 years.

Technical analysis:

After 2 year downtrend, Stock just broke its down trend in June 2017 with strong volume. After GILD acquisition of Kite pharma, Stock showed very strong upward move.

GILEAD weekly chart
GILEAD weekly chart

Eventually this Gild acquisition event lead to a break out the whole biotech sector. Biotech ETF IBB is up more than 5% because of this acquisition effect.

As we see in the weekly chart, Stock first showed its upward move in June 2017.  Gild price move from its bottom price $64 to $76 just in one month.

After stock moved to $76, its pull back little bit. This pull back  was  expected. Because stock reached to inflection point of trend line. Only concern was how deep would be the pull back.

Stock pull back was healthy. After kite pharma acquisition news, Stock broke the long-term downtrend with strong volume and moved up $86.

GILD Daily Chart
GILD Daily Chart

Last 2 weeks stock  made a healthy pull back. As we look at the stock volume in the  daily chart, volume is week compare to its upward volume. That’s a good sign for stock.

May be we can see another up leg for GILD  at the end of September  or first half of the October. If this moves happen, we expects Gild will be $100   in 2017 or far beyond.