Preview

Gilead Science Case

Best Essays
Open Document
Open Document
3088 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Gilead Science Case
University of La Verne
La Verne, CA

Prepared for Prof. Yibo Xiao

BUS 531 Investment & Portfolio Management

Investment Analysis Report
Gilead Sciences Inc. (GILD)

Mohamed Shabib

March 1st, 2014
College of Business and Public Management
Department of Business Administration

Executive Summary This report was written to analyze and examine whether investing in the Gilead Sciences Inc. stock is feasible. Nine main factors were used in reaching conclusions and recommendations, six of which are fundamental factors and three of which are technical factors, as follows:
Fundamental factors: Technical Factors:
1. Valuation Analysis. 7. EMA
2. Profitability Analysis. 8. MACD
3. Balance sheet Analysis. 9. Bollinger Bands
…show more content…
In addition, the three ratios were compared to the industry average to gain insight on other competitors financial health performance compared to Gilead’s own performance. Exhibits 1.3 and 1.4 show the findings of this analysis. The debt/equity ratio for Gilead has experienced very slight change in the past 3 years increasing from 0.76 in 2012 to 0.77 in 2014. Although the increase is minimal it is an indication that the company is financing its equity using more debt than before. This could be of concern in the sense that Gilead is relying on debt to finance its equity activities. However, it could also be viewed positively, knowing that the company is trying to leverage its position and push for further stock price growth. The current ratio increased from 1.44 in 2012 to 3.07 in 2014, indicating an increase in Gilead’s current assets compared to its current liabilities, a further indication on the company’s overall positive financial health. With this increase in current ratio the company is much better able to cover its short term debt …show more content…
ROE for Gilead was 90.32% in 2014. Compared to Amgen’s 21.55% and Biogen’s 30.21% Gilead is doing much better in generating profits from equity investments. Both measures are a testimony to the company’s management performance. In addition to quantitative factors, qualitative factors also give positive indications regarding Gilead’s overall managerial performance. Recently, Gilead’s management succeeded in reaching deals with a number of European countries including Italy, and Spain whereupon the governments of those countries commit to higher purchasing volumes. In exchange Gilead will lower the prices on some of its expensive drugs like Sovaldi, which sells for $1000 a pill. John F. Milligan the company’s president and COO states “Italy has committed to volumes this year that I believe are about three times the volume they have ever treated.” The company’s managers have also been successful in obtaining approvals for the company’s new Harvoni drug in the US in 2014, and in the UK in 2015, and still awaits the highly likely approval of the drug from the EU. All of which will likely boost the company’s sales during 2015 to exceed the current $12.1 Billion figure.
Technical

You May Also Find These Documents Helpful

  • Satisfactory Essays

    patton fuller

    • 1040 Words
    • 4 Pages

    The current ratio is a measure that gives an idea of the company’s ability to pay its short-term liabilities (debt) with its short-term assets (cash, inventory, receivable). The current ratio equals current assets divided by current liabilities. For instance, the Patton Fuller Community Hospital ratio is as follow (unaudited):…

    • 1040 Words
    • 4 Pages
    Satisfactory Essays
  • Good Essays

    EGT1 Task 3

    • 1171 Words
    • 5 Pages

    The first ratio calculated was current ratio. This is done by dividing current liabilities by current assets. Current ratio is important because it shows the business’s ability to pay back the current liabilities with the current assets that they have available to them. At the end of 2011, the current ratio was at 1.86. In 2012, this ratio dropped to 1.80. The industry ranges from 3.1 (showing a strong ability to pay back liabilities) to 1.4 (showing a weak ability to pay back liabilities) with a median of 2.1. Company G is below the median showing a weakness in this category.…

    • 1171 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    This is a brief analysis and comparison of select financial ratios of four companies: two in the manufacturing and two in the retail food industries. The financial ratios analyzed are the current ratio, debt ratio, profit margin, return on assets. I should point out that I used the most recent financial reports provided for each company, although in some cases they may not represent the same years. All dollar figures are in thousands.…

    • 2439 Words
    • 10 Pages
    Powerful Essays
  • Better Essays

    Its 2012 current ratio and quick ratio are 1.93 and 0.75 respectively. Its 2013 current ratio and quick ratio are 1.75 and 0.69 respectively. This suggests the company is still healthy in terms of carrying cash and cash equivalents, even though its current liabilities have increased in 2013.…

    • 1251 Words
    • 5 Pages
    Better Essays
  • Satisfactory Essays

    • Discuss the trend for each ratio and what it tells you about the organization’s financial health.…

    • 323 Words
    • 3 Pages
    Satisfactory Essays
  • Powerful Essays

    The purpose of this paper is to research, analyze and whether to recommend Merck & Co. to potential investors. I will be using both qualitative and quantitative analysis based on previous years of data for the company. I will provide efficient background information (life cycle analysis) including a brief history of Merck & Co., it’s stock chart since being added to the market, any advantages or disadvantages it has within its industry and important news that may affect a potential investor’s willingness to buy or sell this stock.…

    • 1517 Words
    • 7 Pages
    Powerful Essays
  • Better Essays

    In this report, we will revisit and evaluate the three methods of analysis: horizontal, vertical, and ratio. Next, we are to summarize each method, and discuss how the financial information is used to make a particular decision. Then, provide a scenario in a health care situation in which a given method of analysis might be used. I will explain each analysis beginning in order of the Horizontal Analysis with the Vertical Analysis and lastly the Ratio Analysis. Each analysis is different from the next and although the horizontal and vertical are similar, they show different aspects of a company by year. A ratio analysis is a combination of many different analyses and will be gone through individually so they are understandable.…

    • 925 Words
    • 4 Pages
    Better Essays
  • Powerful Essays

    close to surpassing $20 billion in annual sales in 2014. Last year (2013), the company’s sales…

    • 2561 Words
    • 11 Pages
    Powerful Essays
  • Powerful Essays

    Verizon vs Att

    • 1488 Words
    • 6 Pages

    Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.…

    • 1488 Words
    • 6 Pages
    Powerful Essays
  • Satisfactory Essays

    Kroger Co Analysis

    • 461 Words
    • 2 Pages

    The current ratio of the company is decreasing where it was 96% in 2010. In 2011 was at 94%, and 2012 at 80%. Now it’s 72% in 2013. It shows that that company is having more liabilities than assets every year. The stock price is at $36.82, and the range within 52 weeks is $22.05 - $39.98. Revenue is increasing on an average of $7…

    • 461 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Genzyme vs Biogen

    • 670 Words
    • 3 Pages

    From 5-factor ROE Dupont analysis, the current 5-factor ROE for 2011 is 0.088076 which is relatively ok for this biotech company. EVA is 181 which indicates Genzyme is a potential wealth creator. EVA momentum is .459 which, again, indicates Genzyme is a good company to invest in. Positive Residual Income of 23 and positive MVA of 11720 also reinforce the indication. On the scale of good vs. bad company from…

    • 670 Words
    • 3 Pages
    Good Essays
  • Good Essays

    During the Colonial period there was a lot of different outlooks on how the women were treated, how the men thought, how the children were raised. Colonization is dominating land, and its components. What I learned about the colonial period is that how they did things back then, is not how we do them now, they were more strict, powerful, demeaning. The first thing I realized about the colonial period had a difficult time seeing women, and men as equal.…

    • 384 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    Mgt/Swot Analysis

    • 2204 Words
    • 9 Pages

    Pfizer has come a long way since its modest beginnings in 1849, when it founded by cousins, Charles Pfizer and Charles Erhart and their sole product was citric acid, which would lead to the development of penicillin. Today Pfizer is the world’s largest research-based pharmaceutical company. The company consists of three Strategic Business Units: Health Care, Animal Health, and Consumer Health Care. Pfizer’s portfolio consists of 168 prescription products which is a big accomplishment since its inception 162 years ago (pfizer.com, Janu). However, as a mutual fund’s manager, one must look at various analytical tools and resources in deciding whether to invest in Pfizer stock. One of the resources chosen is a SWOT analysis, which acronyms stand for strengths, weaknesses, opportunities, and threats. A SWOT analyzes internal factors (strengths and weaknesses) and external factors (opportunities and threats) that can affect a company (blogspot.com, Apri). All four quadrants of the SWOT matrix will be populated with distinguishing factors unique to the company and examined to determine if investing in Pfizer is a sound decision.…

    • 2204 Words
    • 9 Pages
    Powerful Essays
  • Good Essays

    Wrongful convictions can happen, they should be looked at more by the system as more of a tragedy, but they do happen. In the criminal justice system there are so many different aspects and loop holes that effect the outlook on crime, let alone the convictions that happen. If we can look at all of the good that this system brings. All of the restitution paid, all of the criminals who committed a crime and have served what they deserve. I feel as if we can look so strongly at all of the good, we need to also look at the bad more intensely. The bad is what goes on the news. The bad is what makes cops, prosecutors, and judges look bad. On this task force, I want to review different aspects of our system that can be strongly correlated with wrongful…

    • 1681 Words
    • 7 Pages
    Good Essays
  • Good Essays

    Genzyme Case Study

    • 745 Words
    • 3 Pages

    1. How does Genzyme’s focus on orphan drugs affect the degree of competition it faces? How does it affect the bargaining power of customers?…

    • 745 Words
    • 3 Pages
    Good Essays