Wednesday, January 23, 2008

Johnson & Johnson (JNJ) - A Sliver of Good News

Well it’s been a pretty dismal couple of weeks for the markets with many companies (particularly financials) releasing earning reports that surprised even the bearish of analysts. However, despite all the doom and gloom there are a few positive results out there.

Yesterday Johnson & Johnson announced record sales of $16 billion (a 16.6% increase from Q4 2006) and a 10.8% increase in fourth quarter EPS. Excluding special items their fourth quarter EPS was $0.88 beating the analyst consensus of $0.86 a share. Although these aren’t blockbuster results they are exactly what I’d expect from JNJ, consistent and steady. Even more importantly I think it’s important to look at where the growth is coming from:

U.S Sales: Up 37.6% to $1.63 billion from $1.18 billion
International Sales: Up 57.9% to $2.18 billion from $1.38 billion
Total Growth: Up 48.5%

(The huge increase in this sector is partially a result of the acquisition of Pfizer’s consumer division.)

U.S Sales: Up 2% from last year's $3.87 billion
International Sales: Up 17.8% to $2.45 billion from $2.08 billion a year ago
Total Growth: Up 7.5%

U.S Sales: 6.8% to $2.66 billion from $2.49 billion
International Sales: Up 15.4% to $3.09 billion from $2.68 billion
Total Growth: Up 11.3%

The results are certainly indicative of where the growth is for JNJ (international) and also one of the reasons I originally initiated a position in JNJ.

The company also gave guidance for 2008 and indicated that their EPS would be in the range of $4.39 - $4.44. This represents an increase of 5.8% to 7% not bad considering it looks like we're heading into a recession.

(Disclaimer: I currently have a position in JNJ but am not a financial advisor. Please do your own research and make your opinions on when to buy or sell. Nothing I say should be bastardized or construed in any way to be advice)


MG (moneygardener) said...

Good post. It lends credence to the notion about JNJ being less economically sensitive.

Thicken My Wallet said...

I wonder if JnJ is still too expensive though. I love the stock but can't get my mind around buying it if earnings growth is in 10-12% range but p/e is in the high teens/low 20's.

Anonymous said...

JNJ PE is lowest it has been in years. With the current market fear, things are coming to their buy range.

Today JNJ went down to 62.00. I would have bought but I had already loaded up at 60.00 (It makes up 55% of my portfolio).

If it goes down 20% from my buyprice, I'll load up some more.

IMO if you haven't bought it and it goes down to 60.00, you should buy.

Chris Oliver said...

JNJ is stuck in the mud. There's two major drugs off patent this year and medical devices is stagnant. The shining star is consumer products. Since JNJ is FCF machine, it should turn a low double digit EPS gain because of share buybacks and Fx gains. Same outlook for 09. Look for the good ol'days in 2010. This game is about patience and the 10% dividend increase that will come in April. One day Mr. Market will recognize JNJ and we will rewarded.

MG (moneygardener) said...

JNJ really is the type of stock that you just buy and put away forever. There are so many good things going for this company long term and it has such solid past.

anon - I think you have a typo here unless you have 55% in JNJ, which I really doubt but hey this might just be one stock that you could pull that off with!

Anonymous said...


Not a typo. It IS 55%. I don't belive in (too) much diverisfication.

My plan is to hold btn 5 - 10 great, dividend growing, non-cyclical business that I keep adding onto (and of course never sale). I have waited for JNJ to become cheap and for me self to accumulate enough cash for years. Finally I am in a position to initate positions that matter.

Coincidentally the markets are providing bargains just when I am ready with me arsenal.

I also have a (very)small portfolio for buy and sell investing (trading) in good companies - Retailers, etc

Sample: bought WMT @ 43 will probably sell in the 51-52 range. Will buy home depot when it gets a little cheaper (@ 20). Both of these are good companies and cheap. But I just can't stand retailers for long term holdings. One bargain missed in retailers was AEO. Kinda small cap for me, but was extremely cheap at 18-19 its around 22. Guess can't win 'em all - wasn't sure about pulling the trigger as it goes outside my investing rules.

Got kinda long winded. Sorry about that.

BTW: Love your blog.

Anonymous said...


Just out of curiousity what are the 5 to 10 stocks that you're building your portfolio around?

Anonymous said...

Middle Class Millionaire,

Top Tier:


2ND Tier:
WMT,HD,REI.UN,FTS,ENB,and other utilities and O&G companies (like XOM,COP,ENC)

Top Tier is the foundation on which my portfolio is built. Notice the theme: ALL BRAND NAMES. As of yet I own JNJ and MO from those. Some in there are cheap but not quite. I love extremely cheap stocks cause when I buy I don't nibble, I put the complete allocated amount. I don't care if it gets cheaper by less than 20% but if it gets cheaper by 20%+ than I purchase more.

2nd Tier great brand names but ones that I would not hold for life. I purchase when they are cheap and sell when fully valued or close to.

I know that Wal Mart is still cheap at 50 (I sold today at), but I know that it will come down again. Maybe not to 43 (my original purcahse price) but somewhere in the 46-48 range.

I feel there is still a lot of volatility left in the market.

Anonymous said...

This has been the closest I have got to buying JNJ. Unfortunately, I need it to fall a little bit more to make the numbers work.

Great post! I plan to include your article in my weekly carnival review this Friday.

Best Wishes,


Interesting post on johnson and johmson.

Anonymous said...

It is also a good idea to avoid any accidents, slips
or falls. While the leader is placing protection and clipping the rope through,
the second climber is removing previously placed protection.
The latest version, Rollercoaster Tycoon 3, is produced by Atari and can
be purchased at most retail outlets. However, if you'd like to take the scenic route through Google Earth, the SR22 is a better choice. Just attach a Joystick and pedals, and you could have a real experience of flying a plane.

My website: simulator

Anonymous said...

And it is through teaching us to control our mind, our desires, and.
The next thing that you have to do to become an alpha female during sex and to blow his mind is to experience
a few sex tricks in place your sleeve. It is actually one of the several Cities
within the Netherlands with a big reputation and a large number of sightseers visiting Venlo
annually or even just every weekend.

Look at my web blog; restaurant vouchers

Anonymous said...

Currently around 200,000 customers are successfully being served by Wiltshire farm foods on
a regular basis. We had no problem finding a space, though, despite the
fact that there was a performance that night. What do
you think when a new potential supplier approaches you with the
selling phrase, "I'm as good as the one you use now".

My page - check this out

Anonymous said...

Nevertheless, that does not mean that the product
is a fake. - If your hair feels rough, condition it right away.
There are organic oils in your hair that are there for a cause.
This is why many salon stylists always recommend a
hot oil treatment for hair. 5 ml Kalonji Oil mixed at a hot drink after supper gives a quiet sleep all during the night.

My weblog; how to grow hair faster

Anonymous said...

37 kits (round that up to 9 total quart and a half kits).
First, ready mixed concrete in
Sunderland can help you get your construction job done faster.

It is advantageous for the customer to compare
the prices for an additional dumpster rental from the normal waste removal
company against an offer made by a collector that will place a dumpster for a one-time pickup.

Anonymous said...

Reporting of factual information in a free and fair manner is the very essence of this profession.
The advert designs can range from being simple text affairs
that are very basic, which also tend to be less expensive,
to the more expensive, fully graphic designed adverts with photo quality images that can take up a
whole page of the newspaper. He quickly became a well known activist for Islamic revivalism calling
for the ouster of pro-western governments using violent means if necessary.
Kanchan Kumar Vaidya writes about Newspapers , Hindi Samachar , Online Hindi news.
A Christian newspaperis also associated with various charitable institutions
and churches and organizes fund raising events
to help and aid such institutions.

My blog post :: click here

Anonymous said...

It is through the use of this medium that they wish to make in roads in
the communications market. It familiarizes us with the world and
people who are making history. They also tend to endear
themselves to populations in times of severe duress and hardship
by well funded relief efforts and other charitable initiatives, which make them look incredibly social compared
to corrupted governments. Thus, by putting the price, you get targeted customers who are very interested in what you
are offering; in other words, you get hot leads.
The dishes and ingredients differ slightly from region to region, with each region having their own specialties.

Visit my blog post click here

Anonymous said...

Nevertheless, that does not mean that the product is
a fake. Comb the excess oil through the dampened hair, making
sure to cover the ends of the hair. Quality Omega 3
fish oils are generally derived from cold-water fishes like mackerel, sardines, salmon, and tuna.

The remaining oil in the scalp for a day and then follow up with a
shampoo the next morning. Goodness of traditional herbs work wonders for colored, straightened and chemically treated hair.

Also visit my website ... celebrity hairstyles

Anonymous said...

Eva Mentis seemed like someone who had gone though what I was going through so I ordered the product I got it in 10 days and I started
using it immediately From the very first application
I could feel a difference. Eating white sesame seeds in the morning, take alfalfa juice mixed
with carrot juice and lettuce or third cup of aloe vera juice every day are very good natural remedies.
Deemark herbal hair care oil have been traditionally used
to treat irritated stressed scalp, reduce effect of aging on
hair shape and growth, combat seborrhea and alopecia. Since ages coconut oil has been used for curing skin as well as hair problems as it has anti
fungal and anti bacterial properties. The herbal solution is said to be a natural
one, but, this does not necessarily indicate that it is more effective than
other available procedures.

Here is my blog post :: wavy hairstyles

Anonymous said...

They need to see doctor for some advices on how they can take
control of their blood pressure. This is where a program like Yeast Infection No More can help.
Thanksgiving day is coming, I should buy a thanksgiving gift for Linda.
If the other driver makes any admissions of fault,
write those down as well. o - Strike a equilibrium between viewing 2-4 patients per hour.

Feel free to surf to my weblog: meatless

Anonymous said...

[p]In China, the Isetan Department Store in Shanghai, Beijing, Shenyang [url=]lv bags sale[/url] and other places set up shop . The red Guccissima printing, for the first time extremely creative design used in the wash bag, wash time become mood up, it is easy to carry on business in a good mood . Italy's top cortex was given a variety of color options, the ordered package design, and detachable shoulder strap design highlights the versatility of this [url=]where to buy chanel bags[/url] section bags . Gucci said that in recent years in its product [url=]cheap lv bags[/url] line, classic bag, that is, the proportion of those timeless handbag increase . Gentlemen, it is the achievement of a good beginning of your results and success!

The iPad sets ECCO BARYSH barysh:

The top of the bag is supple and refined wide-open zipper design, attentive care often accompanied by about iPad . Vogue Fashion Network on New Year ten most anticipated "Red China" handbag [url=]lv designer handbags[/url] for your selection . Gaston Vuitton Squire Bag travel bag, the beginning of the design is excellent quality and practical design for the upper crust of travel services . Ubiquitous red heart-shaped accessories details imbued with truth, the bulging shape as the intimate words of love are firmly locked in, as if to tell you is hard to care for her heart to understand her . The end of March 2013, Longchamp Longchamp in Paris Saint-Honor篓娄 Street, No.[/p][p]Qin Zhimin ribbon-cutting, Mr . The the temperament Mommy most colorful summer candy colored diagonal bag bag Casablanca series:

Simple lines represent the feminine outline more tough and smooth . Well-designed stores [url=]chanel handbags[/url] by the design department of Paris perfect combination of tradition and innovation, and continued the Louis Vuitton store unique decorative design, brought to show the craftsmanship and innovative designs of Louis Vuitton boutique: including the core spirit of the brand luggage and leather products, reflects the professional skills of the watch series, trendy fashion accessories collection . The conference presented the main features of the bag, a hollow flower-themed show [url=]replica lv handbags[/url] last fall pattern . , Ltd . Baroque style is also LOEWE this series to find their place . Temi as its most high-end series, Trolltech pinnacle ultimate . Gucci prepare all kinds of small dresses and men's formal wear dresses to choose from, it is well known that Gucci classic color of the red carpet dress for many star, or graceful or sexy, or retro or avant-garde, given a can help you to create [url=]louis vuitton bags uk[/url] the style you want.[/p]

Anonymous said...

Deciding to buy online can result in a huge cost savings while providing you the
best options for your hair care needs today.
Likewise, using imported shampoos and conditioners from a
tropical country when your climate is cold and temperate is not
such a good idea. It is designed for professionals so you know you're getting top performance.

my web page: hair products

Anonymous said...

Anonymous said...

Anonymous said...