Category Archives: $GILD

Some Insight into Incyte – a hot Biotech stock in the FT this week…

Incyte is developing a drug which prevents cancer tumors effectively ‘hiding’ from the body’s immune system which fights disease.
When the body encounters foreign bodies which could do it harm, our immune system kills it off or may reject it in the case of say an organ transplant. But in the same way a female foetus does not reject sperm from a foreign body – an IDO enzyme protects the tumour or foreign body from the immune system – by inhibiting the IDO enyzme, the tumours cannot hide from the immune system!

All sound simple, but drug development is anything but smooth!

2CentView fair value for $INCY = $60 vs 123, consensus target price 144.

So the stock is expensive – the trials data the company will present in June needs to be good – also Gilead has been rumored as a potential buyer of $INCY, so the price also includes some take over premium.

Biotech stocks are very risk, keep positions manageable and be prepared for downside shocks!

If you like $INCY, keep an eye on the stock and hope for a pull back to 80-100 area,

$GILD fair value = $80.

Market sell off Savage – quality stocks at lower prices…UPDATE…

Revisiting some the quality stocks tweeted out at the end of August, following a savage sell off.The market is punishing stocks whose guidance is weak – $SAVE, $GPRO and NXPI…but have rewarded big cap tech stocks like $GOOG, $MSFT.
Can FaceBook join the big tech party or will it sell off following its big run this month?

Here is an update on these great companies mentioned on August 23rd:

Biotech:
$GILD (Gilead) FV = 115 vs 109 – hold out for 115.

Financials:
$MS (Morgan Stanley) FV= 39 vs 34 1.75% 14% Cheap
Reported a terrible quarter, but hold  Р stock is back to 33.4 wait another quarter!

$JPM (JP Morgan) FV=72 vs 64 2.77% 12% Cheap
Prospect for lower rates for longer has not hurt the stock – HOLD.

$HSBC (HSBC) FV=625 vs 533 5.9% 18% Cheap
Weak earnings in Barclays and a potential cash call in Standard Chartered, has not hurt the stock that much at 510. Keep a stop of 470.

Social Media/Internet Retail
$FB FaceBook – look to buy around $80 (30% 5Y Growth)
Results next week – if you got in the low 80’s take profit. 2Centview sold some of the core at 104.

$AAPL (Apple) FV = 120 vs 105
Take profit some profit here above 120.

$TWTR (Twitter) FV=28 vs 26
Terrible quarter – but stock holding up – FV Much lower as company lowers growth expectations. Exit for flat or hold if you believe in Dorsey.

$YHOO (Yahoo FV = 36 vs 33 (vs 68.2 in BABA stock)
Take profit above 36.

$BABA FV= 88 vs 68
Take some profit here at 84.

Chips
$SWKS (Skyworks) FV=92 vs 79 14% Cheap
Stock lower following NXPI results – but FV Unchanged. HOLD.

3D Printing
$HPQ (hewlett packard) FV= 36 vs 27.5 2.56% Yield – Separation could add $5 – look at EBAY/Paypal!
HOLD. FV Unchanged.

$SSYS (stratasys) FV = 25 (if you include $6 of cash) vs 28
FV lower. Exit here at $26 unless you believe 3D printing is potential growth story.

Solar
$SPWR FV=26 vs 21.7
Take some profit here at $26. Keep a core if you believe in Solar Power long term.

Oil
$BP FV=470 vs 357 yield 6.8%
FV= 400 now – lower as oil prices expect to stay lower for longer. Hold for the YIELD or take profit if you got in at 357.
$PFC (PetroFac) FV = 930 vs 789 yield = 5%
Stock did get to 940 – where 2CentView took some profit – holding a core.

Insurance
$AV. (Aviva) FV=580 vs 482 yield = 4.4%
FV Unchanged – hold for the yield.
$AIG FV = 65 vs 60 1.88% Yield
Take profit at $65 (now 63.53)

Airlines:
$EZJ (easyJet) FV= 1950 vs 1624 3.4% Yield
HOLD.
$SAVE FV = $56 vs 55
Terrible run sees the stock trade down to $35. FV $10 LOWER. 2CentView has exited the core position.
$AAL FV=$55 vs 40
HOLD. Nice rally to $46.

Market sell off Savage – but now is to time to look for quality stocks at lower prices…

They say that all bull markets have the occasional 10% correction and last week’s Friday’s was brutal – is this a correction in a bull market or the start of a bear market?

One thing for sure, China growth is slowing – probably to around 5% – or even lower and this is what is driving stocks lower – first the commodity crash – and then companies with growth to China – which is almost every company – hence broad sell off.

The fall out of this significant market event is there could be some more selling over the coming weeks with a possibility of the SP500 hitting 1900.

2CentView is that it is not an overall bear market – the US and UK Economy are buoyant – and with interest rates and oil prices set to remain low for some time yet, this should spur growth as consumers spend. So the broader market may correct a 3-5% more then rally as the lower growth in china is fully priced in.

Mark your stocks from 1 to 3 – 1 being those you really want to keep forever, and 3 those you can sell to raise cash and buy companies you really want which were too expensive before – 2CentView has sold FitBit and Man Group.
2CentView strategy is always to take some profits when stocks hit your target – reducing the overall cost basis making to hard to lose money in volatile markets – and it is times like now when you are glad you did!

Here are some great companies to keep an eye on

Biotech:
$GILD (Gilead) FV = 118 vs 105 1.6% Yield 11% Cheap

Financials:
$MS (Morgan Stanley) FV= 39 vs 34 1.75% 14% Cheap
$JPM (JP Morgan) FV=72 vs 64 2.77% 12% Cheap
$HSBC (HSBC) FV=625 vs 533 5.9% 18% Cheap

Social Media/Internet Retail
$FB FaceBook – look to buy around $80 (30% 5Y Growth)
$AAPL (Apple) FV = 120 vs 105
$TWTR (Twitter) FV=40 vs 26
$YHOO (Yahoo FV = 36 vs 33 (vs 68.2 in BABA stock)
$BABA FV= 88 vs 68

Chips
$SWKS (Skyworks) FV=92 vs 79 14% Cheap

3D Printing
$HPQ (hewlett packard) FV= 36 vs 27.5 2.56% Yield – Separation could add $5 – look at EBAY/Paypal!
$SSYS (stratasys) FV = 33 (if you include $6 of cash) vs 28

Solar
$SPWR FV=26 vs 21.7

Oil
$BP FV=470 vs 357 yield 6.8%
$PFC (PetroFac) FV = 930 vs 789 yield = 5%

Insurance
$AV. (Aviva) FV=580 vs 482 yield = 4.4%
$AIG FV = 65 vs 60 1.88% Yield

Airlines:
$EZJ (easyJet) FV= 1950 vs 1624 3.4% Yield
$SAVE FV = $66 vs 55
$AAL FV=$55 vs 40

NASDAQ Closes above 5k! Bail out or Buy more? 2CentView …….

Can the NASDAQ power on from here or is this Y2K all over again?

$CSCO traded on a p/e of 100x in 2000 and there was talk it could become the first trillion $ company. Today, it has a market cap of 145bn a p/e of 13 and a growth rate of just 5% over 5 years – so not exactly the same as Y2K.
The Biotech sector is showing some signs of a bubble brewing up – but this is still not on the scale of bubble in 2000.

Mobile Social and BioTech stocks have done well over the past 18 months – PC related stocks have performed poorly – and will probably remain that way as there is no growth in PC – look at $INTC and $HPQ recently…

There are very few bargains left in these hot sectors – the last one $SWKS (Skyworks) which was an incredibly cheap stock at $60 when 2CentView tweeted the name back in November 2014, is now $102!

Value names in various Sectors:

PC’s
Keep away from PC Stocks for now – if you do want to buy, $MU is the cheapest.
$MU FV = 38
$HPQ FV = 35 Yield 2%
$INTC FV = 29 Yield 3%

Mobile/Social/Internet of things/Wearables
$GOOG FV=600 – was a great opportunity to buy when below $510
$MSFT FV= 45 – if you think they can move out of their depdendence on the PC
$CSCO FV=30 – buy some for the yield of 3% and potential in the internet of things – implied growth still very low

Internet Software and Services
$BABA FV=120 – includes $20 cash – implied growth 25% vs 45% on $AMZN
$Z FV=108 – Spencer RasCoff is a great young CEO
$YELP FV=70

Biotech/Pharma
$GILD FV = 109 also pays dividend! HepC is competition is heating up though!
$JAZZ FV=189 – could be the next pharma take out!

Solar
$CSIQ FV=60 [see earlier tweet on this name ]

2CentView has core positions in $AAPL, $GOOG, $FB [3 best tech companies in the world!], also $TWTR, $ISIS, $CELG , $GILD and $FEYE

2CentView FVs are calculated using a proprietary earnings based model which has been calibrated to determine a fair vlue stock price today. It is based on consensus analyst predictions of future earnings – these are predictions only and may not play out in the real world. It is designed to identify mispricing between the stock price and future earnings potential of the company. The model has helped 2CentView realise a 35% annual gain over the past 2 years.

$GILD(Gilead Sciences) FV Lower post results but $15bn buyback should…

Gilead Sciences reported last week and declared its first dividend and a $15bn buy back – that was the good news – the bad news was that intense competition in HepC means margins had to be cut – much more than analysts had priced in and the stock got whacked.

From an ethical perspective – this is good – the $1000 list price per pill for Solvadi means that the 12 week treatment needing one pill a day costs $84,000! (but almost guarantees a cure) – making it difficult for many to access the treatment and are forced to take less expensive drugs which have to be take intravenously and have much lower chances of success.

The lower prices are good for the patient and hopefully they will sell a lot more – mainly in Europe and possibly Asia – but India has not recognised their patents and making a Solvadi clone for $1 per pill! But bear in mind there are 150 million HepC sufferers in the world – even if they sold it an average price of $10,000 per treatement that’s still a TAM of 1.5 trillion dollars!!

The $15bn BuyBack should see a 10% rise in EPS over time and the dividends will make it appeal to dividend investors who buy stocks with stable cashflows and good divdend cover. This should support the stock and keep it above the $90 level.

FV = 106 now for Gilead. If you got in at around 96 hold unless better opportunities come up – upside is limited in the short term for Gilead and cannot see it hitting the $112 take profit target before the summer.

2CentView has a trading position in $GILD opened at 95.75 end of December 2014.

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Happy 2015 from 2CentView

Thanks for the all the comments in 2014.

As tweeted at the beginning of 2014 (http://www.2centview.com/2014/01/02/happy-2014-from-2centview-2014/) central bank policies are designed to create real jobs – jobs will not be created unless companies must see real growth – this has certainly happened in the US where unemployment has fallen below the target 6% and gdp growth last reported at 5%!
This has sent the US Indices to records as the majority of companies continue to beat earnings expectations.
As growth begins to accelerate, interest rates are expected to rise as growth is normally accompanied by inflation – but this did not happen – instead of the 10Y US government yield rising to 3% as many predicted it yields kept falling…For some time this created a paradox – the bond market was saying inflation was not a problem – in fact deflation was a bigger problem than inflation – hence growth cannot be possible – but the stock market was saying the opposite? Which market was right?
From the US Perspective, it turned out they both were – what we have seen is amazing drop in oil prices and commodity prices staying low. Oil prices have dropped due to oversupply (fracking, more efficient cars/jets, need to for countries like Venezuela and Iran to keep pumping oil, and a lack of any growth outside the US.
So this means we could have a year of growth with zero inflation – even deflation or disinflation – this could be great for stocks as costs are kept low but prices may not necessarily follow as there is strong demand as people spend their additional cash from their savings on fuel and general confidence in the job prospects.

Only once in the past 13 where there is a 5 in the year has the stock market gone down and David Tepper is making parallels with 1998=2014 and 1999=2015 – both of which saw a russian crisis followed by a great year leading to over valuation from fair valuation.

Stay Invested in stocks in 2015 – the market is not cheap anymore – so finding bargains will be difficult – so look for sells offs like EBOLA to get in!

Would recommend keeping at least 50-60% invested in the US in 2015 (2CentView had 75% in the US invested in 2014).

If you are not invested, here are some starter stocks to get your portfolio going:

Financials – should do well in rising interest environment – so hedge against interest cost rising
$Barc FV=280 vs 243 yield 2.8%
$JPM FV=72 vs 62 yield 2.5%
$GS = 215 vs 194 yield 1.25%
Or if you want exposure to Europe $DB (Deutshe Bank) F=35 vs 25 yield 3% – note:Euro could go much weaker

Social, Mobile, Cloud
No Bargains here – the last was Google at 500 – take a small position in TWTR below 40

Commodoties – with prices at all time low could be an entry point – keep to stops if they keep falling
BHP BIlliton FV=1850 px = 1390 yield = 5.9%
Anglo American FV=1550 px = 1200 yield = 4.5%

BioTech
No bargains here except:
$GILD FV=115 vs 96 9.5 2015 P/E 5% 5Y implied growth!

And finally – look to get into oil stocks when oil finally bottoms out…keep an eye of PetroFac and Halliburton

Happy New Year and all the best for 2015 from the 2CentView team!
Lets hope its good and a bit less volatile!

$GILD(Gilead Sciences) FV Update following Express Scripts decision to …

Give exclusive to Abbvie on their Hep C drug.

FV $10 lower at $115 so Gilead is a good buy here with stock at 96.5

Gilead’s Hepc Drug requires just one pilll a day – AbbVie takes 5 – but the $GILD price is higher – competition may require Gilead to lower prices but not as much as priced into the stock.

2CentView has a trading position in $GILD opened at 95.75 – take profit target $112.

Biotechs – UK Fund Manager Woodford believes “We are on Cusp of Some…

Extraordinary breakthroughs in the UK life sciences sector” and is investing 10% of his portfolio in UK companies like Oxford Nanopore and Circassia Pharma, according to the Times.
The Times also mentions US Biotechs – Celgene, Gilead, Amgen, and Biogen Idec.

There are breakthroughs happening in the US – and every week small biotechs announce innovative new treatments are getting FDA phase one approval.

2CentView has been tweeting about $CELG and $GILD all year – so hopefully you are involved in at least one big biotech – FVs below:

$CELG 100
$GILD 120
$BIIB 300

Which are all up between 30 and 50% this year and still reasonably valued.

As for the smaller Biotechs – there are 100’s! and picking the right one is a lottery…

Best to buy the IBB ISHares if you want exposure to the whole sector, or buy into Neil Woodford’s portfolio.

Warning: The Sector is however very risky – invest for the long term so keep positions in the IBB and small Biotechs small and look to add on weakness – and keep wide stops.

2CentView has a core position in $CELG and $ICPT.