5 Stocks To Watch After The Market Closes Today – 11/1/2016

Electronic Arts (EA): Electronic Arts started the year on a hot streak thanks to the overwhelming success of Star Wars: Battlefront. That has since cooled off and Electronic Arts is coming off a weaker than expected FQ1 2017 printing a 53% decline on the bottom line and 2% on the top. The second quarter unfortunately doesn’t fully cover the annual release of FIFA and Madden video games. These games are often two of  highest grossing games year after year and typically carry quarterly results, but investors will have to wait until the third quarter

Meanwhile, smartphone owners can expect to see new versions of FIFA, Madden and even a Star Wars based game. This is a new facet that Electronic Arts had previously never recognized but is now a huge source of revenue. The biggest factor, however, is growth in digital sales and in-game purchases. This new wave of digital offerings are not only convenient they also generate the highest margins. If Electronic Arts can continue to see strong growth in digital offerings then expect to see more favorable price movement.

Gilead Sciences (GILD): Gilead’s rise and now fall have come at the hands of its hepatitis C franchise, which includes Harvoni, Sovaldi and the recently launched Epclusa. The treatments were primarily credited with its double digit gains in 2014-15 and are now being blamed for negative growth in fiscal 2016. In the second quarter, the group of drugs recorded a 18.5% decline primarily due to lower sales of Harvoni. Harvoni sales were down a resounding 29% as new competition, mainly from Merck, seize its market share. Weak performance from the Hep C franchise was not only disappointing in the U.S. but Europe as well.

This sharp downturn caused management to cuts its outlook for the year in the range of $29.5 to $30.5 billion from $30-31 billion. Nevertheless some of these losses should be somewhat offset by its growing HIV business which includes a handful of already established treatments. Also, a robust pipeline positions Gilead for an easy bounce back in the near future. Setbacks from HCV will nonetheless be the primary talking point from this quarterly report.