Core Insights - The Pacer US Cash Cows 100 ETF (COWZ) has increased nearly 7% year-to-date, contrasting with the flat performance of the S&P 500, indicating a shift in investor sentiment towards profitable companies amid concerns over high technology valuations and concentration risk [2][9] Investment Strategy - COWZ targets profitable, cash-generative businesses with reasonable valuations by screening the Russell 1000 for the 100 stocks with the highest free cash flow yield, holding them in equal weight, which reflects a quality value strategy [3] - The fund's focus on strong free cash flow allows companies to fund dividends, buy back shares, pay down debt, or reinvest for growth without relying on external financing, which is increasingly important in the current interest rate environment [4] Market Context - With the Federal Funds rate at 3.75% and the 10-year Treasury yielding 4.09%, companies generating cash internally have a competitive edge, avoiding costly external financing while providing returns that compete with fixed income alternatives [5] - The portfolio is tilted towards sectors generating cash today, with healthcare representing 22.3% and energy 18%, both known for mature businesses with established revenue streams [6] Performance Metrics - COWZ has outperformed the market by nearly 20 percentage points over five years, driven by a fundamental market shift as investors moved away from unprofitable growth companies towards those with proven profitability and strong balance sheets [7] - The fund holds established companies like Exxon Mobil, Chevron, Gilead Sciences, and Merck, which generate cash rather than burn it, demonstrating institutional validation with $18.3 billion in assets under management and a low portfolio turnover of 1.51% [8][9]

Core Viewpoint - Pacer US Cash Cows 100 ETF (COWZ) has outperformed the S&P 500 significantly, reflecting a shift towards profitable, cash-generative businesses amid concerns over high technology valuations and concentration risk [1] Performance Summary - COWZ surged 7% year-to-date, outperforming the S&P 500 by nearly 20 percentage points over five years [1] - The ETF has $18.3 billion in assets under management and a low portfolio turnover of 1.51% [1] Investment Strategy - COWZ screens the Russell 1000 for the 100 stocks with the highest free cash flow yield, holding them in equal weight, which emphasizes a quality value strategy [1] - The focus on strong free cash flow allows companies to fund dividends, buy back shares, pay down debt, or reinvest for growth without relying on external financing [1] Sector Allocation - The ETF's holdings are concentrated in healthcare (22.3%) and energy (18%), sectors known for mature businesses with established revenue streams [1] - This cash flow focus leads to a portfolio that is less speculative and more aligned with current market conditions [1] Market Context - The shift in investor preference from unprofitable growth companies to those with proven profitability is attributed to the Federal Reserve's aggressive rate hikes, making capital more expensive [1] - COWZ's strategy positions it well in a high-interest-rate environment, as companies generating cash internally gain a competitive advantage [1] Cost and Yield - COWZ charges a 0.49% expense ratio, which is reasonable for an actively managed strategy, though it is higher than broad market ETFs [1] - The fund offers a 1.8% dividend yield, which requires significant equity appreciation to justify the yield gap compared to 10-year Treasuries yielding 4.09% [1] Risk Considerations - The concentration in energy and healthcare sectors may lead to volatility, particularly with fluctuations in oil prices [1] - Investors should consider the total return profile of COWZ, as its cash flow methodology and equal-weight approach create specific risk-return characteristics [1]

Industry Overview - The fourth-quarter 2025 reporting season for the Medical sector is nearing its final stretch, with only a few pharma and biotech companies left to report [1] - As of February 11, 73.3% of companies in the Medical sector, representing 91% of the sector's market capitalization, reported quarterly earnings, with 86.4% exceeding both earnings and sales estimates [2][10] - Overall, fourth-quarter earnings in the medical sector are expected to decrease by 0.6%, while sales are projected to rise by 10.4% compared to the previous year [4] Company Performance Johnson & Johnson - Reported strong fourth-quarter results, beating estimates for both earnings and sales [3] Novartis - Beat earnings estimates but faced revenue pressure due to generic competition for key drugs like Entresto and Promacta [3] Bristol Myers Squibb - Beat both earnings and sales estimates and issued encouraging guidance [3] Gilead Sciences - Earnings exceeded both top and bottom lines, supported by higher sales of HIV and Liver Diseases drugs [3] Bausch Health - Mixed performance with two earnings beats and two misses in the last four quarters, delivering a four-quarter average negative surprise of 6.26% [5] - Scheduled to report on February 18, with an Earnings ESP of -8.84% and a Zacks Rank 3 [7] Amicus Therapeutics - Disappointing earnings track record with three misses and one beat in the last four quarters, averaging a negative surprise of 20.21% [8] - Set to be acquired by BioMarin, with its lead drug Galafold showing solid uptake [9] BioMarin Pharmaceutical - Impressive track record, beating earnings estimates in each of the last four quarters with an average surprise of 66.51% [11] - Scheduled to report with an Earnings ESP of -3.23% and a Zacks Rank 3, driven by strong demand for its dwarfism drug Voxzogo [12] Insmed - Poor earnings track record with four consecutive misses, averaging a negative surprise of 20.64% [13] - Scheduled to report on February 19, with an Earnings ESP of +7.01% and a Zacks Rank 3 [14] - Lead drug Arikayce gaining traction, with a new drug approval marking a significant milestone [15] Madrigal Pharmaceuticals - Missed earnings expectations in three of the last four quarters, with an average negative surprise of 17.17% [16] - Scheduled to report on February 19, with an Earnings ESP of -852.37% and a Zacks Rank 4 [16][17]

Core Insights - Gilead Sciences, Inc. (GILD) reported strong fourth-quarter and full-year 2025 results, with HIV product sales increasing by 6%, driven by a 7% growth in Biktarvy and a 47% surge in its prevention portfolio [1][2][10] Group 1: HIV Product Performance - Biktarvy holds over 52% market share in the HIV treatment market and is the most prescribed therapy for both treatment-naïve and switch patients [2] - Descovy's sales increased by 31% year over year to $2.8 billion, accounting for more than 45% of the U.S. market share in pre-exposure prophylaxis (PrEP) [3] - The FDA approved injectable lenacapavir (Yeztugo), which offers a twice-yearly dosing schedule, enhancing adherence compared to daily oral regimens [4] Group 2: Financial Projections and Growth Drivers - Despite a $900 million headwind from the Medicare Part D redesign, HIV sales grew 10% when excluding this impact, surpassing management's annual target of 5% growth [2][10] - Gilead expects total HIV sales to grow approximately 6% year over year in 2026, with potential growth of 8% when excluding pricing pressures and channel mix shifts [6] - Early uptake of Yeztugo generated $150 million in 2025, with projected revenues of approximately $800 million in 2026 [5] Group 3: Research and Development Initiatives - Positive phase III results from ARTISTRY-1 and ARTISTRY-2 studies for the investigational BIC/LEN regimen increase the likelihood of regulatory approval, potentially launching by year-end [7] - Gilead is collaborating with Merck to advance its HIV pipeline, with data from studies on islatrovir plus lenacapavir expected in 2026 [8] - Plans to initiate a phase III study evaluating lenacapavir plus broadly neutralizing antibodies are set for the second half of the year [9] Group 4: Competitive Landscape - Gilead faces competition from major players like GSK and Merck in the HIV treatment market, with GSK's growth driven by long-acting injectable medicines [11] - Merck markets doravirine and is evaluating a once-daily oral regimen for treatment-naïve adults with HIV-1 infection [12] Group 5: Stock Performance and Valuation - GILD shares surged 45.9% over the past year, outperforming the industry's growth of 19.6% [15] - The current price/earnings ratio for GILD is 17.46x forward earnings, higher than its historical mean but lower than the large-cap pharma industry average of 18.51x [16]

Group 1 - Gilead Sciences, Inc. (NASDAQ:GILD) is recognized as a strong investment opportunity by hedge funds, with BofA raising its price target to $162 from $154 while maintaining a Buy rating [1] - The company reported strong fiscal Q4 and full year 2025 results, highlighting the successful launch of Yeztugo, the first twice-yearly HIV prevention therapy, and continued growth in Biktarvy and Descovy [2] - Total fiscal Q4 revenues increased by 5% to $7.9 billion compared to the previous year, driven by higher sales of HIV and Liver Disease products, despite a decline in Veklury® sales [3] Group 2 - Gilead Sciences, Inc. is a biotech company focused on developing medicines for serious diseases, including cancer, HIV, viral hepatitis, and COVID-19, with a portfolio that addresses unmet medical needs [4]

Economic Overview - The U.S. economic landscape remains resilient with major indexes moving higher, driven by strong earnings from large technology companies and steady consumer spending [1] - The Dow Jones Industrial Average closed above the 50,000 mark for the first time in February 2026 [1] - Market participants expect the Federal Reserve to begin cutting interest rates later this year, although there is uncertainty regarding new Fed leadership and future monetary policy [1] Inflation and Geopolitical Concerns - Inflation is currently above the Fed's long-term target of 2%, which may lead the central bank to maintain higher interest rates for an extended period [2] - Rising geopolitical tensions pose a significant concern, potentially impacting U.S. exports and corporate profits [2] Investment Trends - Investors are shifting towards steady industrial growth stocks due to concerns over high valuations in technology companies and the costs associated with sustaining the AI revolution [3] - Economic reports are being closely monitored, as even minor surprises could lead to significant market movements [3] Dividend-Paying Stocks - In the current market conditions, investors looking to diversify can consider dividend-paying stocks, which indicate a healthy business model [4] - Stocks that have recently increased dividends tend to exhibit a sound financial structure and can withstand market volatility [4] Company Highlights NetEase (NTES) - NetEase is an Internet technology company based in China, with a dividend of $1.16 per share declared for March 27, 2026, and a dividend yield of 1.9% [5] - Over the past five years, NTES has increased its dividend 10 times, with a payout ratio of 29% of earnings [6] Penske Automotive Group (PAG) - Penske Automotive Group operates automotive and commercial truck dealerships globally, declaring a dividend of $1.40 per share for March 5, 2026, with a dividend yield of 3.2% [7] - PAG has increased its dividend 20 times in the past five years, with a payout ratio of 38% of earnings [8] Urban Edge Properties (UE) - Urban Edge Properties is a real estate investment trust focused on shopping centers, declaring a dividend of 21 cents per share for March 31, 2026, with a dividend yield of 3.7% [9][11] - UE has increased its dividend five times over the past five years, with a payout ratio of 54% of earnings [11] Gilead Sciences (GILD) - Gilead Sciences specializes in developing drugs for HIV treatment, declaring a dividend of 82 cents per share for March 30, 2026, with a dividend yield of 2% [12] - GILD has increased its dividend six times in the past five years, with a payout ratio of 39% of earnings [12] Royal Caribbean Cruises (RCL) - Royal Caribbean Cruises operates multiple global cruise brands, declaring a dividend of $1.50 per share for April 3, 2026, with a dividend yield of 1.2% [13] - RCL has increased its dividend five times over the past five years, with a payout ratio of 26% of earnings [14]

Group 1 - Tsugami Machine Tool China (01651) saw a nearly 6% increase, reaching a historical high, with revenue of 81.58 billion yen in China, up 28.3% year-on-year, and segment profit of 22.534 billion yen, up 51.2% [1] - Zhizhu (02513) surged over 26%, with a 25.8% increase reported, following the launch of its flagship model GLM-5, which achieved state-of-the-art performance in coding and agent capabilities [1] - China Nuclear International (02302) rose over 7%, with a forecasted revenue of no less than 2.46 billion HKD for 2025, driven by increased uranium trading volume [1] Group 2 - Tianyu Semiconductor (02658) increased nearly 8% after announcing a strategic partnership with EYEQ Lab Inc., a leader in third-generation semiconductors in South Korea [2] - Harbin Electric (01133) rose 7.95% after announcing an expected net profit of 2.65 billion yuan for 2025, a year-on-year increase of approximately 57.2% [2] - Weichai Power (02338) increased over 5.6%, with Morgan Stanley raising the projected cumulative power gap for U.S. data centers from 44 GW to 47 GW for 2025-2028 [2] Group 3 - SOLV Energy (MWH.US) debuted on the U.S. stock market with a 22.68% increase, focusing on large-scale solar power and battery storage projects [4] - Gilead Sciences (GILD.US) rose 5.82%, with a reported revenue growth of 2.4% year-on-year and a significant net profit increase of approximately 16.73 times [4] - TSMC (TSM.US) increased by 3.37%, reporting a January revenue growth of 36.8% year-on-year, marking its strongest monthly revenue ever [5] Group 4 - Bilibili (BILI.US) rose 2.84% after announcing collaboration with the Spring Festival Gala, marking the first involvement of UP owners in the event [6] - Micron Technology (MU.US) surged 9.94% as the memory market experienced a rapid increase, with prices rising 80%-90% since the end of Q4 2025 [7] - Kingsoft Cloud (KC.US) increased by 9.98%, with Goldman Sachs predicting Xiaomi's investment in AI to reach approximately 10 billion yuan in 2026, benefiting Kingsoft Cloud [8]

Core Viewpoint - Gilead Sciences experienced a significant stock increase of nearly 6% following favorable Q4 results, with a notable 100% gain over the past two years, reaching an all-time high of $157 per share [1]. Q4 Results - Gilead reported Q4 sales of $7.92 billion, a 5% increase from $7.56 billion in the same quarter last year, exceeding estimates of $7.57 billion [2]. - The HIV franchise sales grew by 6%, driven by strong demand for products like Biktarvy and Descovy, while liver disease revenue rose by 17%, led by Livdelzi [2]. - Net income for the quarter was $2.2 billion, translating to an adjusted EPS of $1.86, which surpassed expectations of $1.83 despite a decline from $1.90 per share a year ago [2]. Full Year Results & Guidance - For FY25, Gilead's EPS is projected to spike by 76% to $8.15 compared to $4.62 per share in 2024, with annual sales increasing over 2% to $29.44 billion [4]. - Gilead's guidance for FY26 anticipates annual sales between $29.6 billion and $30 billion, slightly below Wall Street's estimate of $30.04 billion, but the top end of EPS guidance ($8.45-$8.85) exceeds expectations of $8.61 [5]. Valuation and Dividend - Gilead's valuation remains attractive at 17X forward earnings, which is below the S&P 500 average and the industry average of 19X [6]. - The company offers a 2.15% annual dividend yield, higher than the S&P 500's average of 1.07%, with a payout ratio of 39% [8][9]. Return on Invested Capital (ROIC) - Gilead has a return on invested capital (ROIC) of 24%, significantly higher than many biopharmaceutical companies, which typically have ROIC in the mid-teens or single digits due to high R&D investments [10]. Investment Outlook - Following the favorable Q4 results, Gilead Sciences holds a Zacks Rank 3 (Hold), presenting an intriguing option for long-term investors seeking value and income [11].

Core Viewpoint - Gilead Sciences is experiencing strong financial performance and growth potential, particularly in its HIV and liver disease segments, supported by a robust pipeline of new products and an optimistic outlook from analysts [1][2][3][4][6]. Financial Performance - Gilead's Q4 2025 earnings report showed total product sales of $7.9 billion, marking a 5% increase year-over-year [2][6]. - For the full year 2025, total sales reached $28.9 billion, reflecting a 1% increase from 2024 [2][6]. - HIV sales specifically grew by 6% year-over-year, driven by the success of the drug Biktarvy and a 47% increase in the HIV prevention portfolio [2][6]. Product Developments - The new HIV prevention injectable, Yeztugo, has surpassed coverage goals and is gaining market share [3][6]. - Gilead's pipeline includes up to 10 ongoing and potential new launches through 2027, with four commercial launches planned for 2026 [3][6]. - The liver business reported a 6% growth, attributed to the adoption of Livdelzi for primary biliary cholangitis [4][6]. - Trodelvy, an oncology product, also demonstrated positive momentum with a 6% growth in 2025, supported by favorable Phase results [4][6]. Analyst Ratings - BMO Capital has maintained an "Outperform" rating for Gilead, raising the price target from $150 to $160, indicating confidence in the company's future performance [1][6].

Core Viewpoint - Gilead Sciences, Inc. reported strong fourth-quarter results for 2025, with adjusted earnings per share (EPS) of $1.86, exceeding estimates, while total revenues of $7.9 billion also surpassed expectations, driven by growth in HIV and Liver Disease drugs [1][4][6]. Financial Performance - Adjusted EPS for Q4 2025 was $1.86, beating the Zacks Consensus Estimate of $1.83, but down from $1.90 a year ago due to higher acquired IPR&D expenses [1][6]. - Total revenues reached $7.9 billion, a 5% increase year over year, surpassing the Zacks Consensus Estimate of $7.6 billion [1][4]. - Product sales increased by 5% year over year to $7.9 billion, with HIV product sales growing 6% to $5.8 billion [4][5]. Product Sales Breakdown - Biktarvy sales rose 5% year over year to $4 billion, capturing over 52% of the U.S. HIV treatment market [5][6]. - Descovy sales surged 33% year over year to $819 million, driven by increased demand for HIV prevention [6][7]. - Liver Disease portfolio sales increased 17% to $844 million, exceeding estimates, primarily due to demand for Livdelzi [8]. - Veklury sales fell 37% to $212 million, attributed to lower COVID-19 hospitalization rates [8]. Cost and Expenses - Adjusted product gross margin was 86.8%, slightly up from 86.7% year over year [11]. - Research and development expenses remained flat at $1.6 billion, while SG&A expenses decreased to $1.7 billion from $1.9 billion [11][12]. 2025 and 2026 Guidance - For 2025, revenues rose 2% year over year to $29.4 billion, exceeding estimates, with adjusted EPS increasing to $8.15 from $4.62 in 2024 [13]. - Gilead expects 2026 product sales between $29.6 billion and $30 billion, with adjusted EPS projected in the range of $8.45-$8.85 [14][15]. Pipeline and Regulatory Updates - Positive phase III results for the investigational regimen of bictegravir and lenacapavir were reported, with a potential launch targeted for the second half of the year [16][23]. - Gilead has discontinued several studies based on recommendations from independent committees, including the phase III STAR-221 study [18][19]. Market Position and Competitive Landscape - Gilead's HIV business exceeded management's growth target, driven by strong performances from Biktarvy and Descovy, despite competitive pressures [21][22]. - The company anticipates continued competitive pressures in cell therapies and expects to face headwinds from U.S. government drug pricing agreements [24][27].