Our latest recommendation is a biotech giant well known for its success with HIV drugs and, lately, its hepatitis drug, Sovaldi, explains Nicholas Vardy, editor of Bull Market Alert.

Gilead (GILD) endured an intraday pullback of as much as 8% on Friday before the stock rebounded, ending the day down 1.4%. The panic ensued after Bloomberg reported the company is discussing selling a “cheaper version” of Sovaldi.

It turns out that Gilead is close to a deal with generic drug makers to bring cheaper versions of its $84,000 hepatitis C drug Sovaldi to approximately 80 developing nations, including India, Pakistan, and Indonesia.

Under the terms of the deal set to close at the middle of this month, Gilead intends to sell Sovaldi directly in certain lower-income countries, including India, at $900 for 12 weeks of therapy. Sovaldi sells in the United States for a price of $1,000 a piece, or $84,000 for 12 weeks.

Less well-informed investors sold the stock off sharply. In contrast, analysts who follow the company closely were left confused. After all, such a deal was already expected, and it is something Gilead already does with its HIV medication.

In any case, from a pure earnings standpoint, any new sales will only add to Gilead’s profits, as almost all of its current profits are based in the few developed countries' sales.

Trading at a forward price-to-earnings ratio (P/E) of 11.26, Gilead is now quite a cheap stock considering both its sales and earnings are growing at a steep rate. So buy Gilead and place your initial stop at $90.00.

Subscribe to Bull Market Alert here…

More from MoneyShow.com:

Affymetrix: Jump In the Gene Pool

Celgene: Breakout in Biotech

Novovax: Viral Values