Research archive for JNJ

JNJ shelled out a sizeable amount of money last week to acquire a business called Actelion, the presentation casts it as a Unique & Compelling Value Proposition. In short, JNJ are buying the Actelion business for 30 billion Dollars, to "Expands and complement (the) Janssen portfolio with leading, differentiated in-market medicines for pulmonary arterial hypertension."

JnJ reported their full year and 4Q numbers on Tuesday before the US market opened. Off the bat the market wasn't impressed with the forecasted numbers for the coming year, with the stock dropping 2%. The drop highlights how stock prices are current expectations of future profits.

JNJ reported numbers for their third quarter yesterday, before the market opened. Before we get into those, let us have a look at the business. They operate across the globe, although in 2015, 51 percent of their sales were from the US, 23 percent of sales come from Europe and 18 percent from Asia Pacific and our continent. The balance (8 percent) is classified as "Western Hemisphere", which means Central and South America, as well as the other countries in North America. In terms of divisions, JNJ sales are (or were last year) split as follows: 45 percent pharma, 36 percent medical devices and 19 percent consumer. The company spent just over 9 billion Dollars last year on research and development (12.9 percent of sales), many of these businesses spend around 10-14 percent of annual revenues on searching for the next blockbuster, that will save countless lives in the future.

Johnson & Johnson reported numbers yesterday, before the market opened. I recall whilst reading the history of the company that there were three brothers Johnson who started the business, it could just as easily have been called Johnson Bros. I guess history may have been different and afforded the company a less spectacular path. The business is split into three segments, a devices and diagnostics business (as a standalone the biggest in the world), a well known pharma business which most investors associate with and lastly a business that consumers know and trust well, that covers every thing from bandaids to child care. If you have had a kid in the last five decades I am pretty sure that you have used the clear yellow tinged shampoo and the baby powder. In the US of course Tylenol is a big seller in the children pain department, not without their fair share of issues. Their brands are instantly recognisable, Listerine, Neutrogena, as well as the aforementioned brands.

Johnson & Johnson reported numbers for their first quarter of their 2016 financial year, two sessions back. These were released just prior to the market opening in the US. Forgive us, there has been loads going on, we are pretty early, in terms of earnings season reporting thus far. Sales, although flat year on year at 17.5 billion Dollars for the quarter, were a meet, the bottom line was a comfortable beat. Net earnings clocked 4.3 billion Dollars, diluted earnings per share were 1.54 Dollars.

Last week we had Johnson & Johnson Reports 2015 Fourth-Quarter Results, which were a small beat on earnings expectations but a miss on the revenue side of things. As we have spoken about in previous notes on JnJ, they are basically three companies in one with the following devisions, Pharmaceutical Products, Consumer Health Care Products and Medical Devices.

As far as we are concerned, the most important company related news yesterday were numbers from Johnson & Johnson. First came the announcement that the company were embarking on a 10 billion Dollar buyback program, which is around 4 percent of the shares in issue at the current share price. This is a sizeable business, not too different in market capitalisation to the two behemoths above, with a market cap of 262 billion Dollars. The business consists of three divisions, a consumer facing business with all the names that you will be familiar with and then the pharma business, with a recently larger and bolted on devices and diagnostics business.

JNJ released numbers for the second quarter yesterday, before the market opened. This is one of the oldest and most recognisable business in the healthcare space across the planet, if not the owner of that title. A bandaid is synonymous with the word plaster. It is a really big business, consisting of three specialist divisions, one being their medical devices (Synthes and DePuy), the other being the well known consumer division (if you have had a baby, you know this one well) and then lastly the pharma business.

Johnson & Johnson was established in 1886 when the Johnson brothers created a line of ready to use surgical dressings. It listed in 1944 and within that period until now, managed a run of 52 consecutive years of dividend increases. Today it operates over 275 companies around the world, 144 manufacturing plants occupying 21.7 million square feet of floor space and has a market cap of $277bn. The company is broken up into 3 business segments, namely Consumer, Pharma and Medical Devices and Diagnostics.

JNJ released their second quarter results before the market opened yesterday, here, take a look: Johnson & Johnson Reports 2014 Second-Quarter Results. Pretty significant numbers in some way, pretty insignificant in the bigger picture. First and foremost, why own a conglomerate inside of the health space, why not own separate businesses in the same space? JNJ is actually a fairly rare company as far as investments go, in my last look at the business, in May of 2014, a post titled Great diversified business, we described the business:

OK, sorry, we have been backed up here with too many off days and too many results to cover properly at the same time. We had Q1 2014 numbers from JNJ on the 24th of April, which in trading terms is so far back that you cannot remember. Q1 sales when measured against the comparable quarter were 3.5 percent better at 18.1 billion Dollars, net earnings at 4.7 billion Dollars and EPS clocked 1.64 Dollars. The dividend had a few days prior been hiked by 6.1 percent to 70 cents a quarter. That is 2.80 Dollars a year, which means that at 100 odd Dollars the yield is easy enough to work out, not so? Earnings guidance for the rest of the year is in the range of 5.80 to 5.90, which means in the middle of the range the stock trades on a forward multiple of 17.1 times, with a yield of 2.8 percent. The earnings growth for the year is expected to be somewhere in the region of 11.8 percent. Relative to their peers, the company is afforded about the same rating.

Yesterday we received 4th quarter and full year results from Johnson and Johnson. Before we delve into the numbers let's see what the share price has done. In the last year the share is up 28%, in the last 2 years it is up 54%. It has been a good performer to say the least, especially when you consider the size of the business and the risk you would be taking when buying this stock. I'd say the reward has far exceeded the risk.

You may have heard this one before, it goes something like this: What is the difference between JnJ and the US government? The answer is a very cheeky one has a triple A credit rating from S&P and the other does not. In fact the company is one of only 7 companies inside of the top 100 companies by market cap to have this distinction. There are some other amazing stats about Johnson & Johnson that I think are worth sharing. According to the annual report, the company has had only 7 CEO's in their 127 years, so I guess the job is rewarding and challenging enough for the chief to stick around long enough. Alex Gorsky is currently the 9th chairman (he is also the CEO). The business has been listed since 1944, I am pretty sure that when they hit the screens tape, times were pretty uncertain!

Yesterday evening we received results from our favoured healthcare stock in New York, Johnson and Johnson. It was a healthy beat but let's look at that later, I want to first look at what the share price has done over the last year. In this low interest environment stocks like JNJ with high dividend yields have naturally done very well. So far the stock is up 29% this year. Of course that is not only because it has a strong dividend, the company has shown good growth. The company was flat for the second half of last year so the stock is only up 32% in a full year. You see patience does pay.

Yesterday we saw results from our favoured healthcare stock in our US portfolios, Johnson & Johnson. What a history this company has. It was founded in 1886 and has been listed since 1944. It has boasted 29 consecutive years of adjusted earnings increases and 50 years of consecutive dividend increases. It now has a market cap of $227bn and boasts annual sales of $67bn.