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The Power Of Fear: Is Gilead A Buy Or Sell In 2015 After First Quarter Guidance?

What can stop a large cap company that's up over 400% in 3 years? Fear… The fear of falling revenues based on new competition and decreased pricing based on competition. That's what we saw yesterday after hours when Gilead (NASDAQ:GILD) beat 2014 4th quarter earnings estimates easily while posting above consensus earnings in HCV along with double digit growth in HIV sales (Table 1) but falling over 7% by premarket today. In the earnings call, Gilead management (which is super conservative) flexed its muscles saying they would add a $15B share buyback over the next 5 years and a quarterly dividend of $0.43 (1.6% annually). They also announced that they had completed the $5B share buyback in 2014 and have sufficient capital to push the pipeline forward and make acquisitions to boost its pipeline as…