May 19, 2020
Those Who Purchased Gilead Sciences Shares Five Years Ago Have A 32% Loss To Show For It
by finance.yahoo.com
Gilead Sciences, Inc. (NASDAQ:GILD) shareholders should be happy to see the share price up 11% in the last quarter. But if you look at the last five years the returns have not been good. After all, the share price is down 32% in that time, significantly under-performing the market.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
Looking back five years, both Gilead Sciences's share price and EPS declined; the latter at a rate of 16% per year. This fall in the EPS is worse than the 7.4% compound annual share price fall. The relatively muted share price reaction might be because the market expects the business to turn around.
You can see how EPS has changed over time in the image below (click on the chart here to see the exact values).
It might be well worthwhile taking a look at our free report on Gilead Sciences's earnings, revenue and cash flow.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Gilead Sciences's TSR for the last 5 years was -22%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Gilead Sciences shareholders have received a total shareholder return of 17% over one year. That's including the dividend. Notably the five-year annualised TSR loss of 4.7% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Gilead Sciences better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Gilead Sciences .
Of course Gilead Sciences may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
http://finance.yahoo.com/news/those-purchased-gilead-sciences-nasdaq-123714449.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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