Our latest recommendation returns us to a sector that has been out of favor over the past 12 months with biotech giant Gilead Sciences (GILD), explains Nicholas Vardy, editor of Alpha Algorithm.
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Founded in 1987 and headquartered in Foster City, California, Gilead is an independent biotech company that has a broad-based focus on developing and marketing drugs to treat patients with infectious diseases, including viral infections, fungal infections and bacterial infections. The company also has a specialized focus on cancer.
In our data-driven approach, we see 10 top investment strategies that are betting on Gilead:
1. Goldman Sachs Hedge Fund Index
The stock is part of the Goldman Sachs Hedge Industry Index, which tracks an equal-weighted index of the 50 most-frequently held U.S. companies selected from the portfolios of hedge funds.
2. Large-Cap Alpha Core
The stock is one of a tiered, equal-weighted index of large-cap stocks selected from the S&P 500 expected to outperform the broader large-cap space based on an intricate methodology of ranking stocks according to their recent performance.
3. Goldman Sachs’ Active Beta The stock is selected according to four factors which are value, quality, momentum and low volatility. These, in turn, are based on criteria including book value, sales and cash flow scaled by share price, profit/assets or return on equity (ROE), risk-adjusted returns and daily standard deviation of returns.
4. Morningstar’s Moat
This stock is included in a strategy that tracks an equal-weighted index of 20 companies that Morningstar determines to have the highest fair value among firms with a sustainable competitive advantage or “moat.”
5. Market Legends’ Pick
Stock is part of a strategy that replicates methods of a handful of legendary investors using 20-plus models built on fundamental valuation metrics, rather than technical factors.
6. Deep Value
This strategy tracks an index of 20 stocks selected from the S&P 500. It identifies undervalued stocks using proprietary quality screens -- positive earnings, dividends, etc. -- and valuation metrics like enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA).
7. Value Tilt
Selected using a multi-factor modeling approach, the company is a value stock designed to enhance portfolio risk/return characteristics.
8. Share Buybacks
The company’s outstanding shares have been reduced by at least 5% in the previous year through share repurchases.
9. Insider and Analyst Sentiment
One of 100 stocks chosen from the S&P 1,500 based on positive sentiment among those “insiders” closest to a company’s financials and business prospects, such as top management, directors, large institutional holders and the Wall Street research analysts who follow the company.
10. High-Quality Stock
The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and financial leverage.
