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Trade-Ideas: Gilead (GILD) Is Today's Momo Momentum Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified Gilead (GILD) as a momo momentum candidate. In addition to specific proprietary factors, Trade-Ideas identified Gilead as such a stock due to the following factors:

  • GILD has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $383.9 million.
  • GILD has a PE ratio of 35.1.
  • GILD is currently in the upper 30% of its 1-year range.
  • GILD is in the upper 25% of its 20-day range.
  • GILD is in the upper 35% of its 5-day range.
  • GILD is currently trading above yesterday's high.
  • GILD has experienced a gap between today's open and yesterday's close of 0.7%.

'Momo Momentum' stocks are valuable stocks to watch for a variety of reasons including historical back testing and price action. Market technicians refer to such stocks as being in a mark-up phase before a possible distribution period and price decline. Technical analysts and traders frequently find that the factors referenced above tend to create a temporary burst of strong wind in a stock's sail. Nevertheless, all successful traders must excel at maximizing gains while keeping losses to an absolute minimum. For that reason, the holding period on momo momentum stocks must always be a primary consideration, and this part of the puzzle is ultimately at the discretion of each individual's risk tolerance and portfolio risk management skills.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in GILD with the Ticky from Trade-Ideas. See the FREE profile for GILD NOW at Trade-Ideas

More details on GILD:

Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes human therapeutics for the treatment of life threatening diseases in North America, Europe, and Asia. GILD has a PE ratio of 35.1. Currently there are 18 analysts that rate Gilead a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Gilead has been 7.7 million shares per day over the past 30 days. Gilead has a market cap of $96.0 billion and is part of the health care sector and drugs industry. The stock has a beta of 0.93 and a short float of 4.3% with 9.84 days to cover. Shares are up 70.8% year to date as of the close of trading on Thursday.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Gilead as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, reasonable valuation levels, expanding profit margins and increase in net income. We feel these strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the ratings report include:

  • GILD's revenue growth has slightly outpaced the industry average of 9.3%. Since the same quarter one year prior, revenues rose by 15.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 91.40% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, GILD should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • The gross profit margin for GILEAD SCIENCES INC is currently very high, coming in at 76.98%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 27.91% is above that of the industry average.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Biotechnology industry average. The net income increased by 8.6% when compared to the same quarter one year prior, going from $711.56 million to $772.61 million.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12-months. Learn more.

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