Thursday, January 10, 2013

"The next 50 days in the stock market could seem like a visit to Harry Potter's "The Deathly Hallows". Scary"

Dow Jones Industrial Average 13,435.21  (UP) Week ending 01-03-2013

Whoa Nellie. If you feel like your portfolio has death-eaters and dementors swirling around it and dark clouds with skeleton heads appearing in them and looming over you, YOU are not alone. You are currently living through our version of Harry Potter's "The Deathly Hallows" with the government hitting Debt Ceiling limits, Run Away Government spending, and with leaders that have just raised your social security taxes 2% and that want to raise your taxes another trillion dollars. Oh and if that's not enough, the US Government is going to stop "Twist" and other artificial manipulations like buying up the surplus treasury bonds when issued, so interest rates will be surely be going up. Talk about uncertainty. 55 days or so from now we get to face Fiscal Cliff 2, (the postponed appointment with Fiscal Cliff 1 !)  

A scary place to be right now. So it may be a good time to get your financial house in order, and sell off some stocks that might have question marks on their revenues or earnings. You can carefully pick up on stocks that you know will bounce back if we do have a temporary downturn. One of these stocks I will mention below and is the subject of this week's blog.

Gilead Sciences Inc. 

(Symbol GILD, $75.72, Split 2:1 - $37.86)

Return on Equity 33.91% PEG Ratio 0.76

Gilead Sciences Inc. is projecting 2012 earnings of $3.84 per share and 2014 earnings of $4.42 per share. GILD has had 5 year sales growth of 20.02% and 5 year earnings growth of 22.37%. The company did 8.46 Billion in sales revenues in 2011 so it is a Mid Cap heading on it's way to becoming a Large Cap stock. I had starting writing this article on Saturday and just finishing now, so the stock has run up a little this week along with Celgene (CELG), so you may need to pick a spot to purchase it. The stock also currently has 21 Strong Buy recommendations and 4 Overweight picks in from analyst. The company has had a 3 year Total Return of 70% with most of that happening this year.

So grab your magic wand and prepare to do battle in 2013, which should be a wild ride with all the government hi-jinx going on. I will try to be on time for this weeks blog.

Keep those spells and potions in hand in case you need them to fend off demons.


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