Motley Fool: A possible COVID-19 treatment

Shares of Gilead Sciences (Nasdaq: GILD), a large-cap biotech known for its game-changing HIV and hepatitis C therapies, have risen since early 2020, because of its closely watched COVID-19 therapy, remdesivir, which was approved for emergency use by the Food and Drug Administration. There’s more to like about Gilead, though.

For one thing, it has new products in its pipeline, such as experimental rheumatoid arthritis drug, filgotinib, which has the potential to become a megablockbuster by the middle of the decade.

Gilead has been building up its oncology franchise, which is key to its long-term outlook. During the first quarter of 2020, for instance, it snapped up cancer specialist Forty Seven in a $4.9 billion deal, and some expect it to make further acquisitions in the coming years.

Finally, Gilead sports a strong balance sheet, free cash flow and a top-notch shareholder rewards program. Its dividend recently yielded about 3.6%, and it bought back more than $1 billion worth of shares during the most recent quarter.

If you’re looking for growth, value and income, give Gilead Sciences a closer look. (The Motley Fool owns shares of and has recommended Gilead Sciences.)

Ask the Fool

Q: I bought a stock at what ended up being its all-time high. It’s fallen in price. Should I sell it? Did I buy at too high a price? – D.H., Hartford, Connecticut

A: Don’t think so much about what you paid for the stock. The purchase price (your “cost basis”) matters whenever you sell and have to calculate your gain or loss, but you can ignore it most of the time.

Instead, focus on the stock’s current price and what you think its intrinsic value – its true fair price – is. For example, let’s say you bought shares of Buzzy’s Broccoli Beer (ticker: BRRRP) at $50 apiece and they’re now near $30. If your research suggests the shares are really worth about $40 each, then they’re undervalued and probably worth holding, waiting for them to eventually grow in value. If you think that the shares are worth around $20, though, selling makes sense. With any stock holding, whether you’re sitting on a gain or loss, what matters most is where the shares are now and where you think they’re headed.

Don’t hang on to any stock you’ve lost faith in, and don’t hold on waiting to gain back any losses. Instead, sell and move whatever money is left into your best investment ideas.

My dumbest investment

My dumbest investment was buying shares of Shopify for $99 apiece in June 2017 – and then selling them at $86 only 24 days later. That was followed by seeing the shares explode upward later. I learned to be patient with the stock market, and that you can’t really become rich overnight. – Justin, online

The Fool responds: Some people do luck out and buy into a stock that’s about to skyrocket, making them a lot of money quickly – but that’s mostly luck, and not something you can count on.

Instead, it’s best to find healthy and growing companies and to invest in them when their shares seem undervalued. Then hang on for many years, while keeping an eye out for any unpromising developments. That system has made many investors millionaires.

Shopify, whose e-commerce platform and services help businesses sell offerings online, has been a rapid grower in recent years. Its shares were near $40, $100, $140 and $400, respectively, at the beginning of 2017, 2018, 2019 and 2020. You were on to something when you bought the shares, and you should ask yourself why you sold. If you found a more compelling stock or you needed the cash, selling made sense. But if you were simply impatient or spooked by some volatility, those are impulses you need to tame to be a successful long-term investor.