What Is the Number One Stock to Buy Right Now? There’s simply no way for any company or brand at this point to ignore Covid-19.
Companies are putting out statements and working to help both customers and employees. But one segment of companies (biotech) stands to make a killing from coronavirus cures, and Gilead Sciences, Inc (GILD) is at the front of that pack.
Gilead’s claim to fame is Sovaldi, the first approved cure for the hepatitis-C virus. It also worked on clinical trials for HIV drugs in Truvada and is now conducting phase 3 trials in both the U.S. and Wuhan, China for remdesivir, the company’s proposed Covid-19 cure.
It expects to have 500,000 antiviral treatment courses manufactured by October and one million by year end.
That means the company is not only defying the market, but it also has a bright future. Oh – did we not mention that it outperformed the rest of the market this year?
Let’s dive into what makes Gilead Sciences a solid investment for 2020 and beyond.
Gilead Sciences vs S&P 500 & DJIA
As countries around the world shut down, the global economy has been devastated.
Major companies in every sector (even healthcare) have experienced mass furloughs, layoffs, and closures. The global market dropped over 25% from February through March, and the S&P 500 became extremely turbulent.
The Dow Jones Industrial Average sank over 2,300 points at the end of February, and both the DJIA and S&P 500 have investors worried.
Even on a good year, the typical yield for an S&P 500 stock is 2%, and Gilead is already nearly doubling that, yielding 3.8% dividends for its investors in the first quarter of 2020 alone. The company has already been increasing dividends since 2015, so this latest coronavirus simply accelerated that trajectory
In fact, Gilead is part of the S&P 500, so it’s pulling the average up for everyone else. Let’s isolate this biotech company from the pack to talk about what steps they’ve taken since January 2020 to get where we are now.
Gilead Coronavirus Vaccine
Gilead was founded by a group of scientists in Foster City, California in 1987, and recruited former Secretary of Defense Donald Rumsfeld to its board of directors soon after. By 1992 it had its initial public offering (IPO), which raised over $86 million due to its anticancer and antiviral research. The company focuses on treatments for influenza, hepatitis B and C, and HIV.
When Vistide launched in 1996, it was hot on the heels of the AIDS crisis. Magic Johnson was diagnosed in 1991, and he soon became the face of AIDS and HIV.
His partnership with Gilead lasts to this day, which has seen its HIV treatments evolve regularly to now include Descovy and more.
Their decades of experience developing viral vaccinations and other treatments (even at a time digging into cancer), Gilead stands to become a global hero during this pandemic (especially for its investors).
And while no coronavirus treatment has yet been officially approved, Gilead’s experimental treatment has become a beacon of hope.
According to a report published in the New England Journal of Medicine, 68% of the 53 patients given the remdesivir treatment improved their condition.
This included patients in the U.S., Europe, and Canada, with a mix of patients needing respiratory support like mechanical ventilation and heart-lung by-pass machines.
Gilead Coronavirus Treatment
It’s not definitive, but there are large-scale clinical trials being performed in both the U.S. and China.
Results could be reported from China as early as this month, while the U.S. National Institutes of Health is voluntarily enrolling patients as the virus spreads and won’t be far behind in announcing results. Meanwhile, the company is sponsoring two additional trials to prove the medicine’s efficacy.
Remdesivir is on the brink of being approved on a global scale. It’s well ahead of other potential treatments, such as hydroxychloroquine, which has been touted throughout the White House press briefings during the 2020 coronavirus lockdown.
This drug was once used to treat malaria and lupus, but Gilead’s Covid-19 treatment is the only one that has been studied on a large clinical trial to determine if it prevents severe complications.
With all this global hype, it’s probably safe to assume all one million of its vaccines will be purchased somewhere on the market long before they’re even developed, and that brings us to the important piece.
Is Gilead Stock Undervalued?
Based on a discounted cash flow analysis, GILD is currently undervalued. Nearly every analyst on the planet believes it’ll double by year end.
The trial results are soon to be announced, but with so many global sources, they’re moot at this point. They show enough promise that the drug will likely be produced and bought by some country or organization anyway.
Remdesivir is the belle of the ball, and it’s racing to be the first cure. Much like in software development (and what occurred with Gilead’s HIV treatment) the most effective Covid-19 treatment will be determined over the long run. Gilead’s pending approval puts it in the position to make a lot of money.
What Is the Number One Stock to Buy Now?
It’s never easy to pick a single stock to outperform over the long term but Gilead is certainly a strong contender. With every brand in the world trying to attach its name to coronavirus relief in some manner, the company that pulls ahead with any type of treatment is going to win.
Just like a surgical mask, N95 mask, canister gas mask, and closed-loop scuba oxygen system all provide different levels of protection while grocery shopping, there will be different coronavirus cures that pop up over the next decade. But Gilead ranks top of the list of protective defenses too.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.