Johnson and Johnson (JNJ)

The health care sector has lagged the broader market all year, and Pfizer’s announcement that they will cancel research on their most promising experimental drug, torcetrapib, seems likely to send all the major pharmaceutical companies into a tailspin this week. I will be watching Johnson and Johnson like a hawk. I already own JNJ but I would be interested in buying more at the right price.

JNJ is such a large and well-known blue chip figure in the health care industry that it needs no description. The Johnson & Johnson brand name itself is a priceless asset. The company manufactures and distributes too many high quality over-the-counter consumer products to list. JNJ is, of course, also a major player in pharmaceuticals, and in addition the company offers a wide range of products for treatment of circulatory disease, orthopedic joint reconstruction, spinal care, wound care, minimally invasive surgery, blood glucose monitoring, and professional diagnosis, and they sell disposable contact lenses. This multinational company has a major presence almost everywhere in the world. JNJ is without doubt one of the world’s greatest companies. It has an enviable record of rising earnings and steadily increasing dividend payments to shareholders. It is a component of the Dow Jones Industrial Average.

From time to time, the shares of this remarkable company become reasonably priced. Such is the case right now. There has been considerable fear on Wall Street about what the Democrats may do, and the drug business has been coming to grips with well-known issues threatening profits. All of this has been causing a drag on JNJ’s price performance and the shares have been starting to look remarkably cheap in relation to their quality and future potential. Signigicant price weakness at this juncture will create an irresistable opportunity for value investors.

Advertisements

3 Responses to “Johnson and Johnson (JNJ)”

  1. DANIEL @ INDIANA UNIVERSITY Says:

    REALLY LIKE THE SITE AND VALUE-DRIVEN APPRAOCH — HOWEVER, I’D LIKE TO KNOW MORE ABOUT JNJ; WHAT DO YOU SEE AS CATALYSTS?

    WHAT DO YOU THINK FUTURE EPS WILL LOOK LIKE — TELLING ME JNJ WAS A GIANT YESTERDAY DOES NOTHING TO CONSOLE ME — OR RATHER, GALVANIZE ME — TO BUY MORE.

    FYI, I OWN A BOATLOAD OF JNJ ALREADY, BUT WOULDN’T MIND GETTING MORE IF THE PRICE WAS, AS YOU SAY, ATTRACTIVE.

    THX
    DJ @ KELLEY MBA PROGRAM

  2. Alligator Investor Says:

    I have a lot of respect for fundamental analysis, but that is not my area of expertise. I look at the fundamentals for entertainment and I rely on technical analysis for decision making. I believe in trends, and I have made all my money by identifying persistent long-term uptrends and sticking with them. Everything I need to know about JNJ is contained in this chart:
    http://finance.yahoo.com/q/bc?t=my&s=JNJ&l=on&z=m&q=l&c=&c=%5EGSPC

  3. What is the Value of a Brand Name? « Alligator Investor Says:

    […] A couple of weeks ago in a post about Johnson & Johnson, I said the company’s brand name is a priceless asset. But maybe brand names can be objectively valued: A recently released article by Interbrand and Business Week attempts to do just that, and lists the top 100 global brand names for 2006 in order of value. […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: