Stock number one is:
Gilead Sciences, Inc, (SYMBOL: GILD ) and the headline says:
Gilead profit meets Wall Street forecast, sales rise 14% -- Reuters
Gilead Sciences reported second quarter earnings on target, with revenues up 15%, and Wall Street was pleased. Gilead has a strong pipeline fueling projected earnings growth of 50% per year in 2014 & ‘15. European regulators approved Gilead’s new HIV medicine last week, and the FDA is expected to approve a cancer drug, and a breakthrough hepatitis C drug, late this year.
On June 10, we told Ransom Notes listeners that the stock would probably bounce once more at $49, then recover to $56, both of which happened by July 11. The stock price is up 26% since our buy signal, broke past $56 in mid-July, and continues to climb. We would wait for a pullback to accumulate more shares.
Our Ransom Note trendline says: HOLD GILEAD SCIENCES.
Stock number two is:
Starbucks Corp., (SYMBOL: SBUX) and the headline says:
Starbucks Profit Gains 25% as U.S. Sales Improve -- Bloomberg
Starbuck’s third-quarter sales and earnings came in higher than analysts expected. Sales of new food and beverage products in its retail stores and supermarkets showed surprising increases. The grocery category represents Starbuck’s fastest-growing and most profitable business segment. Morgan Stanley called Starbucks “a best in class retailer producing one of its best ever quarters.”
Earnings are expected to grow 20-22% for each of the next three years. The PE is 33. Watch for fourth quarter estimates to increase after today’s report.
The stock began reaching new highs in early May.
Our Ransom Note trendline says..... ACCUMULATE STARBUCKS.
Stock number three is:
Expedia Inc., (SYMBOL: EXPE) and the headline says:
Concerns from Intensifying Competition – Morgan Stanley Research
Global online travel company Expedia Inc. missed analysts’ second-quarter sales and profit estimates by a wide margin due to internal problems, poor Hotwire revenue, and domestic competition. The sales problems seem to be company-specific, and are not expected to affect competitors such as Priceline.com. At least ten brokerage firms cut their price targets on Expedia today.
Full-year profits are expected to grow in the high single digits this year.
Frustrated shareholders have missed their chance to sell at a good price. The stock will likely establish a new trading range between $48 and $52.
Our Ransom Note trendline says.... SELL EXPEDIA AT $52.