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Old 07-13-2018, 11:52 AM   #1
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Contrarian Investing-JNJ?

Using the VW idea, or Phillip Morris, many years ago; I love it when it a large profitable company gets hammered by a Billion dollar settlement. Johnson and Johnson has just moved into that list. $4.8 Billion settlement for selling talcum powder for what, 100 years? Kind of disappointed that today's price is only down 1.30 on light volume. Maybe it's already priced in when it was over 140 a share. Will have to wait and see. Hopefully the MSM will hammer them in the coming days or weeks. I covered the VW idea at length on another web site and was lambasted mainly because a lot of people hated their service and the MSM did all the work for me. They outperformed a hot stock market over 1-1/2 years.
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Old 07-17-2018, 10:19 PM   #2
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Using the VW idea, or Phillip Morris, many years ago; I love it when it a large profitable company gets hammered by a Billion dollar settlement. Johnson and Johnson has just moved into that list. $4.8 Billion settlement for selling talcum powder for what, 100 years? Kind of disappointed that today's price is only down 1.30 on light volume. Maybe it's already priced in when it was over 140 a share. Will have to wait and see. Hopefully the MSM will hammer them in the coming days or weeks. I covered the VW idea at length on another web site and was lambasted mainly because a lot of people hated their service and the MSM did all the work for me. They outperformed a hot stock market over 1-1/2 years.
Up $4.42 today, not exactly what I was expecting this soon. Hopefully more of a correction.
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Old 07-17-2018, 11:43 PM   #3
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Nice inverse head and shoulders pattern on this stock, and it pays a nice dividend. Don't see how you can go wrong here.

I'm still riding high with my TNDM - earnings reported on 7/30. Looking for this one to sail through $30.
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Old 07-18-2018, 05:52 PM   #4
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Using the VW idea, or Phillip Morris, many years ago; I love it when it a large profitable company gets hammered by a Billion dollar settlement. Johnson and Johnson has just moved into that list. $4.8 Billion settlement for selling talcum powder for what, 100 years? Kind of disappointed that today's price is only down 1.30 on light volume. Maybe it's already priced in when it was over 140 a share. Will have to wait and see. Hopefully the MSM will hammer them in the coming days or weeks. I covered the VW idea at length on another web site and was lambasted mainly because a lot of people hated their service and the MSM did all the work for me. They outperformed a hot stock market over 1-1/2 years.
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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Old 07-21-2018, 06:39 PM   #5
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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.
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.
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Old 08-01-2018, 08:19 PM   #6
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Since posting this, JNJ is up $7-$8 a share.
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Old 08-03-2018, 06:08 AM   #7
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TNDM hit $31.39 yesterday, but is selling off a bit after announcing a new offering. Sister company Dexcom surged 20% on earnings beat.
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Old 08-03-2018, 05:04 PM   #8
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Last post about TNDM. Closed at $32.96 despite the new offering at a discount ($28.50). Stock off to the races now, I hope. Wish I could pick horses like I pick stocks.
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Old 08-03-2018, 10:15 PM   #9
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Last post about TNDM. Closed at $32.96 despite the new offering at a discount ($28.50). Stock off to the races now, I hope. Wish I could pick horses like I pick stocks.
Late day bump up to 33.03, nice call OM. Up over 20% since you made your original call.
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Old 08-04-2018, 06:23 AM   #10
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Thanks. You know what they say about blind squirrels and nuts, right? Got lucky with that one.
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Old 08-31-2018, 10:55 AM   #11
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Last post about TNDM. Closed at $32.96 despite the new offering at a discount ($28.50). Stock off to the races now, I hope. Wish I could pick horses like I pick stocks.
While I've been happy with my modest gains on JNJ, your call on TNDM has been an almost 75% gain since I added that one at your suggestion. When I was still working, I used to focus on biotech's and medical/drug stocks with good success. You reminded me that they're still a good play when there's some financial substance to their value. THX Mike!
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Old 08-31-2018, 02:44 PM   #12
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You're welcome - I took some off the table and traded into something even more speculative. Playing with house money now. Glad I could help; Tandem and Dexcom are sister companies and seem to be relentlessly moving higher.
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Old 09-07-2018, 04:39 PM   #13
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Nike

Nke fits the mold for contrarian investing: Strong economics, great product line, and some non-accounting event to knock the price down. However, this marketing ad make me unavailable to hold my nose while investing in this company. And like JNJ, it really wasn't knocked down that much. Quick blow over on this event, IMO.
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Old 09-11-2018, 04:30 PM   #14
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Nke fits the mold for contrarian investing: Strong economics, great product line, and some non-accounting event to knock the price down. However, this marketing ad make me unavailable to hold my nose while investing in this company. And like JNJ, it really wasn't knocked down that much. Quick blow over on this event, IMO.
Gapped up twice since I wrote this. Investors don't care about boycotts it seems.
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Old 09-11-2018, 07:51 PM   #15
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This was an ill-fated boycott from the get-go, it seems to me. Many of those who burned their shoes will be buying them back, and Nike had the demographics of their customer base figured properly.
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