"Gilead Sciences (NASDAQ: GILD), one of the world's largest biotechs, is a stock for all seasons," say growth expert Alexander Green.
The investment director for The Oxford Club explains, "It's a fine company with a solid balance sheet, a recession-proof business and excellent growth prospects."
"Gilead focuses on three main areas, including cardiovascular conditions and respiratory diseases. (Many may have taken its anti-influenza drug Tamiflu, Letairis to treat hypertension, or Macugen to treat macular degeneration.)
"But Gilead's real moneymaker is its antiviral franchise. The Centers for Disease Control and Prevention recently raised its annual estimate of new HIV infection in the United States from 40,000 to 56,000.
"Of the 30 million people worldwide who are infected with HIV, more than one million of those are in the United States and 54% of those are being treated with HIV drugs.
"Left untreated, the HIV virus progresses to AIDS, an immune deficiency that leaves the body vulnerable to a host of diseases. But with the right drugs, HIV can be managed for decades as a chronic illness rather than a death sentence.
"As the dominant player in the HIV drug market, Gilead benefits when the market expands. Four out of every five treated patients take at least one of Gilead's HIV drugs.
"Like most drug companies, Gilead's sales come mostly from the United States, Europe and Japan. In regions where patients can't afford to pay for drugs, such as Africa, Gilead licenses its drugs to third parties that sell them for a fraction of the cost.
"Business at the biotech giant is already robust. Shrugging off the recession, earnings are up 31% on a 29% increase in revenue. Annual revenues are $6 billion.
"Other numbers at Gilead look good, too. Operating margins top 49%. And management is earning an impressive 50% return on equity. No wonder 92% of the stock is in the hands of institutional investors.
"So ignore all the nattering about what the economy and stock market are going to do next. Nobody knows that. Pick up some Gilead instead. It's a fine company with a solid balance sheet, a recession-proof business and excellent growth prospects."
