5.6.14: Healthcare Earnings Deep-Dive

Last weekend, in our Weekly Earnings Update here, we noted the strength in SP 500 earnings was coming from Technology and Healthcare.

Thanks to Gregg Harrison of Thomson Reuters, T/R provided us with some color on the HealthCare sector.

Here is the spreadsheet FCHlthcare5514 detailing the jump in HealthCare earnings over the last 5 weeks.

According to Gregg Harrison, most of the increase is due to Gilead, the biotech giant that was on fire last year.

According to our charts, Gilead was up over 100% for calendar 2014.

Looking at the fundamentals, when GILD reported earnings on April 22nd, the expectation was for $0.91 in EPS and $3.99 billion in revenues. Actual results were $1.48 and $4.99 billion in revenues for actual upside surprises of 64% and 25% respectively.

The stock is still trading below its March 25th high of $84.88 too.

Q1 ’14 SP 500 earnings are coming in stronger-than-expected, Our expectation was 3% – 5%, but I’m guessing that the 5% ceiling will be exceeded by mid-June ’14.

Growth stocks have been hit hard this year: Small-cap’s, Consumer Discretionary, Biotech, etc., but looking at  a lot of our names that have reported (like a Facebook), the growth is still there. (Long FB)

Thanks for reading,

Trinity Asset Management, Inc. by:

Brian Gilmartin, CFA

Portfolio manager

 

 

 

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