Out Fox The $treet

Gilead Sciences rallied on potential COVID-19 treatment. The plan to remove stock-based compensation from non-GAAP EPS guidance provides a headwind in 2020. Due to a disappointing turnaround, the stock is a sell on any major rally based on the COVID-19 treatment. The ability of  Gilead Sciences  ( GILD ) to make a run at new highs must speak to bullishness surrounding the coronavirus because the biopharma is struggling to complete the expected turnaround. In addition, new management made the unwise decision to remove stock-based compensation from non-GAAP results going forward causing a headwind for EPS estimates. When combined with disappointing growth prospects for 2020, investors are probably lucky the stock is at yearly highs above $70 versus the yearly lows at $60. Read the full article on Seeking Alpha.  Disclosure: Long GILD. Please review the disclaimer page for more details. 

Gilead Sciences continues a recent trend with limited revenue growth in Q3. The biotech has the pipeline to generate decent growth over the next 5 years. A boost to the capital returns could yield a 4% dividend and 10% EPS growth. For years,  Gilead Sciences  ( GILD ) has been plagued by declining sales form their crucial HCV drug franchise causing a painful few years for shareholders. The stock topped $120 back in 2014 and the company finally appears poised for a sustainable turnaround, albeit a minor one. Read the full article on Seeking Alpha.  Disclosure: Long GILD. Please review the disclaimer page for more details. 

Gilead Sciences (GILD) had been about a 5% weighting in our Net Payout Yields model. The company had been on a huge buyback plan making the stock very attractive for this model that focuses on stocks with high yields from the combination of net stock buybacks and dividends. Unfortunately with the recent Pharmasset (VRUS) buyout announcement, Gilead has strayed from the plan of rewarding investors with capital returns toward buying growth. Typically these deals don't workout for investors of the purchasing company. With the reporting of Q4 numbers , Gilead verified on the conference call that stock purchases have all but been eliminated as the company raised debt to buy Pharmasset. Via Seeking Alpha transcript : Robin L. Washington And, Geoff, relative to your share count, as we talked about with the acquisition, we did moderate and pretty much have spent our share repurchases after October of 2011. We will do moderate share repurchases in the near term to offset option d...