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TAKE 120: Gilead beats OXY in Big Industry battle

Monday, July 08, 2013 - 02:35

July 8 - USAA's John Toohey has 120 seconds to choose between Big Oil and Big Pharma and says, despite the run in Gilead Sciences, the biotech firm has more upside.

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It is we -- what's funny we're getting big oil against big -- Johnson has systematic that sounded like he likes Gilead Sciences. Over Occidental Petroleum. -- judge like Gilead what's the number one. -- -- -- -- -- -- -- -- -- It is the drug at a baby boomers in the emerging markets. Did yesterday four million people in the US in fact it. Maybe as many as a hundred million worldwide. So big story but it stops its big gains more than doubling over the past year is -- that. We don't tax. We don't see an analyst models you don't see in the stock price. Let's here's talk about -- -- petroleum stocks not performed as well. Paying dividend in the oil business why it went. While the yet does have a lot of free cash flow pays a dividend -- what we think it's gotta take some additional action. -- spin out its international business to truly monetize the value of the company the other problem it is. While a great company is cyclical exposed to commodity prices. Global economic cycle. -- actually work regardless of economics of. It's interesting we talk about economic cycles what happens when interest rates to rise more -- they are now Kelly it's got one billion dollars to three years. We don't think so it'll be a problem for many companies to refinance or issue data rates rise. But -- act if the Pepsi drug war we'll have such huge free cash flow. Pay down debt they'll be able to do that easily the question is what are they gonna do all that extra free cash while this stuff. Two big risks one is is that the drug doesn't make it through pastry approved by yet. Second risk is is it's a high priced drugs for the payers team that managed care companies and be willing to pay for all of us out out of pocket. Bright light. Where does the stock trades by the end of here -- We think that trade trade significantly higher and probably in the seventy's toward a comedian art that -- how quickly. They get cancer from Iraq. John thanks for joining me at this week's take my money I -- shop there this is Reuters.

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TAKE 120: Gilead beats OXY in Big Industry battle

Monday, July 08, 2013 - 02:35

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