| Symbol | Sector | Return | Exposure | Trades | Last Trade | Status | |
|---|---|---|---|---|---|---|---|
| JNJ | Pharmaceuticals | -10.12% |
|
4 | 21-Nov-08 | Currently Holding |
12-Aug-08
Best of breed
Holding Rationale for JNJ.
Few can doubt the success of JNJ's business model. The firm has tremendous brand recognition, and despite poor performance on their pharma segment, earnings estimates continue to move higher (especially after their Q2 results in mid July).
JNJ's top line may never again grow faster than 10%, but with continued cost containment (pardon the alliteration) and share buybacks, EPS growth in the low teens is possible.
At today's levels, JNJ trades at a reasonable 15 times '09 earnings. The rule for JNJ earnings has consistently been to beat by a few cents per quarter. In this market environment, consistency like that demands a premium; its not a surprise to see this stock near new highs with a reasonable 2.6% yield.
JNJ has been helped with the currency translation, so like many multi-nationals, this most recent rally in the dollar, if sustained, could provide a headwind for earnings in 2009 and beyond.
Tagged Stocks: JNJ
Posted at 05:15 in Holding Rationales | Permalink | Comments () | Top
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