Wall Street was disappointed at recent earnings reports from Genentech (NYSE: DNA) and Gilead Sciences (NASDAQ: GILD). In his ChangeWave Biotech Investor, biotechnology sector specialist Michael Shulman sees long-term opportunities.

"Genentech is one of the greatest companies in the world -- easily the best cancer company on the planet. Analysts did not like Genentech's earnings numbers, in part because of overall revenue growth, which was quite sluggish.

"However, profit growth was up 14%, key drug sales were up 13% and European partners are ramping up sales that produce pure profit in the form of royalties. Its revenue growth is far better than big pharma outfits and its earnings are bigger than all but four biotech outfits combined.

"The valuation is increasingly attractive, at 22 times the current earnings and less than 20 times forward earnings, especially with a $10 billion stock buyback in the works. Will DNA double soon? No. Is it a great long-term investment that is grossly undervalued? Absolutely. Buy it now."

"Gilead is at a compelling price point and valuation. The recent sell-off was a result of its earnings report, which showed 22% revenue growth, profits at 54 cents a share, product sales that increased by 36% and HIV product sales that grew 37%.

"The one-time slowdown in torrid revenue and profit growth came from a falloff in royalties from Tamiflu, which fell 38% to $118 million. The company generates so much cash that it bought back half a billion shares and still had $2.5 billion in cash at the end of the quarter. It is continuing with the remainder of a $3-billion stock buyback program.

"GILD is now selling for 20-22 times forward (12-month) earnings and, with decreased royalties built into the price of the stock, GILD is a screaming buy as revenues and profits will grow in serious double digits for several years."

Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.