insert.a.chart.GILD

The editor of Ticker Tape Digestexplains, "We are suggesting scaled-in purchases of the with the final buying to be done on a breakout above $50." Here, he reviews the biotech stock and its fundamental and technical outlook.

"Gilead Sciences, with annual revenues of $4.2 billion, makes therapies to treat life-threatening infectious diseases. It focuses on pulmonary and cardiovascular diseases.

"The company has four products -- Viread, Emtriva, combination pill Truvada, and triple combination Atripla -- in its HIV franchise. as well as Hepsera for hepatitis B. GILD recently received approval for pulmonary arterial hypertension drug Letairis, acquired from Myogen. 

"The stock has climbed from 10 to 47 the past five years. It is one of the few stocks now that is knocking on the door of making a new high. With earnings growth to be solid this year and next, we see GILD in a good spot to be accumulated in anticipation of a breakout.

"Technically, the stock's long-term chart shows it is a  steady climber. It has been able to work higher without any significant pull back. So, the stock has been consistent. Near-term, we see a 'double-bottom' basing pattern.

"The base was formed after the stock advanced from 36 back in August to a peak near 48. The structure of the base is good showing a contraction in volume at the recent lows. Also, the recent largest volume days came when the stock closed higher in price. That is bullish.

"The stock's technicals are surprisingly strong given the weakness in the stock market the past several months. The momentum indicator is very bullish. And the accumulation - distribution line is near a new peak.

"This year, analysts predict GILD will post a 14% increase in net to $1.92 a share from $1.68 a year ago. Earnings growth should accelerate modestly in 2009 to 17% with net hitting $2.25 a share compared with the anticipated $1.92 for this year.

"Revenue growth is running at 22%. For the upcoming first quarter, analysts are forecasting a 13% gain in net to 48 cents a share from 43 cents a year ago. The highest estimate on the Street is at 52 cents a share.

"The past four quarters GILD has tended to either meet or top by 5 cents a share the consensus Street estimate. In late February, GILD put in place a $500 million stock buy back plan.

"Our strategy opinion is that GILD is a strong acting stock. We suggest accumulation of GILD as a partial stake with further buying to be done on a move over 50. We are targeting GILD for a move to 60. A protective stop can be placed near 45. We view this as an intermediate-term play.

"The stock's sponsorship is very good. The largest fund buyer lately was 5-star rated Columbia Marsico 21st Century Fund which purchased 1.5 million shares. Also, 5-star rated Janus Twenty Fund was a recent buyer of 521,000 shares."