Gilead Sciences: A Coiled Spring.

Gilead Sciences: A Coiled Spring.

3 years ago
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If you study the following chart, courtesy of Gurufocus.com, you will notice that Gilead Sciences (NASDAQ: GILD) has been stuck in a sideways trading pattern since August 2014.

chart(4)This is unfortunate news for the impatient speculator, but great news for the patient long-haul investor.

Let me explain…

At Vailshire Capital Management, LLC, we believe that owners of equities should consider themselves much more than just temporary stock holders.  Rather, they are co-business owners.  As such, potential investors should dig deeply into a company’s financial statements, listen to conference calls, and do whatever it takes to understand the vision of the business and its management team.

Once he is satisfied with the entire story, the wise investor puts his personal savings to work and becomes a co-business owner with only the greatest companies.

Vailshire believes that Gilead Sciences is one of the great companies of our age, with first-in-class HCV and HIV therapies, skyrocketing revenues and earnings, as well as, a fantastic management team that is positioning the company to cure diseases and be a leader in the biotech space for years and decades to come.  With phenomenal returns on equity, robust cash flows and the initiation of its first dividend in June 2015, Gilead’s compressed stock price is analogous to a coiled spring.

The longer the share price trades sideways–with rapidly increasing revenues, earnings and cash flow–the more violently the stock will explode higher as the market realizes what it has been missing… and the shorts get squeezed.  Vailshire clients will be positioned to benefit nicely once the share price moves to follow the positive balance sheet trends.

Vailshire: Live well. Invest wisely.