Quote:
Originally Posted by reckless
You need to ask yourself how much money you are willing for pay for JNJ?
Future capital gains returns are simply judged by how much you paid for your original stock purchases.
A quick glance at JNJ on Yahoo finance tells me that they have $16 billion in Free Cash Flow ... at a market cap of about $343 billion that is about 21 times FCF.
At 21 times JNJ is far from being overly expensive. I would rate it a hold if I was in that game. I try to buy companies under 15 times at a minimum, and load up the truck when great companies sell at 10 times or less. Apple, Neflix, Microsoft, Viacom, Gilead, Discovery, Accenture, and a few others were all purchased by me over the past 15 years when they sold at these bargain prices.
A metric that I find disappointing is ROE at under 2 per cent. Must be near a historic low. A small positive is 13 % sales growth in the last quarter. They've also paid a dividend for about 100 years -- not sure exactly but it's like forever. A great sign always!
Good luck.
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I can't disagree with you reckless. Was expecting the stock to get absolutely pummeled and it didn't happen. If you saw what happened to VW, MO, or a few of the drug companies many years ago, the opportunity just didn't happen.
