Follow the leader.
We’ve all played this game at some point in our lives. The popular children’s game helps teach our kids to be patient and listen to directions. It also sharpens their observational skills as they must mimic the actions of the leader.
As investors we want to be in leading stocks. The problem for most investors is that they fail to notice the relevant signs and distinctions from the leaders. They are too busy holding on to former losers hoping to break even, and refuse to recognize the buy signals that leading stocks are demonstrating under the surface. These investors often pay too much attention to the financial news media, who are usually wrong and don’t normally invest in the stocks they tout on TV.
The best investors exemplify the skills we teach to our young people. They are extremely patient and wait for proper entry points. They know what to look for in terms of price patterns, sector rotation, and relative strength. These investors have built a process over time that enables them to identify leading stocks at any given point in time.
Here at Zacks we give you the tools to help identify leading stocks and outperform the market. Our Zacks Industry Rank identifies the top industry groups that contain market leaders, providing a tailwind to your investing success. Our Zacks Rank methodology pinpoints stocks that are witnessing positive earnings estimate revision activity, allowing investors to jump on board
before an emerging rally gets underway. And our Earnings ESP filter empowers investors by allowing them the opportunity to detect stocks that are most likely to beat consensus estimates.
These are just a select few of the benefits available to Zacks’ subscribers. Our Zacks Style Scores and Premium Screeners also assist investors in narrowing down the investable universe to only the top names. That’s the key – we only want to include the best of the best in our portfolio, which will allow us to maximize our investing potential.
Let’s discuss three biopharmaceutical stocks that are displaying recent relative strength. These stocks have led the major indexes this year and are showing signs of continued outperformance.
Gilead Sciences, Inc. ( GILD Quick Quote GILD - Free Report)
Gilead Sciences is a global, research-based biopharmaceutical company that discovers, develops, and commercializes innovative medicines. GILD strives to transform and simplify care for people with life-threatening illnesses, including treatments for HIV/AIDS, liver disease, cancer, inflammatory and respiratory diseases, and cardiovascular conditions. Founded in 1987 and headquartered in Foster City, CA, Gilead Sciences has collaboration agreements with other biopharma giants including Bristol-Myers Squibb, Merck, and several other companies.
GILD has built a strong portfolio including but not limited to hepatitis C virus drugs, HIV/AIDS therapies, breast cancer drugs, as well as their COVID-19 treatment (remdesivir). The company’s diversified product pipeline bodes well for long-term growth. Gilead is also making headway in the oncology space with strategic acquisitions such as Immunomedics in 2020.
GILD has averaged a positive earnings surprise of 15.79% over the four quarters. The company most recently reported EPS in October of $2.65, a +54.07% surprise over consensus. Trading at a relatively undervalued 9.04 forward P/E, GILD is showing relative strength as we head into the new year. The stock is up over 31% in 2021 and is currently hitting a 52-week high. New highs are bullish for investors.