Biotech Values

[Rocky3]

What I meant was that at this time I think it's probably fully valued.

While I am not sure that I would agree that GILD is "fully valued," it is hard to argue that it is undervalued at ~110. Since I still believe in the modified cliff for HCV (much lower sales in '18 and beyond), I do believe a pretty low p/e is appropriate. The issue is how low for the p/e and how high for normalized earnings. Wells Fargo upped the valuation range from $123-127 to $135-138. It has earnings topping at $12.77/sh in '17, primarily based on peak HCV sales of $15.865B (out of $28.976B total). I still think those numbers are too low for the peak, but that the peak will be in '16, not '17. Bottom line, I think that am generally a holder 'til 120 or so (having previously said 115). Since I have taken a lot of profits already, I will probably wait 'til '15 to sell my Jan 60 calls and then wait for long-term treatment for the rest of the longer options and to cut back on the outright shares. Net, net I am still comfortable holding, even though it is no longer undervalued. JMO.

As far as Gilead goes, the current management at least added around $125 Billion in market-cap over the last 5 years or so.

I'd be happy to award them 5% of that. My bigger problems is with the smaller bio companies that give 5% with nothing to show for it.

I think that 5% is too big a number. They are getting paid in current dollars to do their job. Getting a bonus is fine, but not in the BILLIONS. Agreed as to smaller bios. JMO.