JNJ

Thinking Slow: 3 Research Blind Spots That Changed the Investment World

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Dear members: — Daniel Kahneman in his text Thinking, Fast and Slow (1) divided the human psyche into two systems. The first system is instinctive and emotional, often set on autopilot, while the second system is slower and more logical, requiring a calculating conscious. Many of the maxims the investment world takes for granted today suffer from conclusions that are made rapidly, almost without thinking, driven by our first system, creating what I call research blind spots. — In World War II, Allied bombing raids were suffering from very high casualty rates. It was estimated that for those pilots that were flying at the beginning of the war, only about 10% survived, a terrible loss rate. Bombing was crucial to the Allied … Read more

Your Role as a Choice Architect

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“As we’ve shown time and time again, you don’t need to look far to beat the market return (or, by comparison, to have a healthy diet). If something is not on the menu at Valuentum, it means the chef has something better cooking in the kitchen.” — Dear members: — Richard Thaler in his groundbreaking book Nudge (1), co-written with Cass Sunstein, talked about the role of the choice architect. A choice architect is basically someone or some organization that has the responsibility for organizing the context and content in which people make decisions. — A good example of a choice architect might be a cafeteria worker that has to decide how to organize the food in a buffet line … Read more

Johnson & Johnson Raises 2025 Guidance

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Image Source: J&J By Brian Nelson, CFA On July 16, Johnson & Johnson (JNJ) reported better than expected second quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecast. The healthcare giant reported adjusted operational sales growth of 3% in the quarter (2.4% growth in Innovative Medicine and 4.1% growth in MedTech) and adjusted earnings per share of $2.77, down modestly on a year-over-year basis. Free cash flow was ~$6.2 billion in the quarter, also down from $7.5 billion that it registered in the second quarter of last year. Management had the following to say about the results: Today’s strong results reflect the depth and strength of Johnson & Johnson’s uniquely diversified business operating across both … Read more

Johnson & Johnson Remains an Innovation Powerhouse

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Image Source: Johnson & Johnson By Brian Nelson, CFA Johnson & Johnson (JNJ) recently reported first quarter results that showed revenue and non-GAAP earnings per share exceeding the consensus forecast. First quarter reported sales growth was 2.4%, with operational growth of 4.2% and adjusted operational growth of 3.3%. First quarter earnings per share increased to $4.54, while adjusted earnings per share advanced 2.2%, to $2.77. Management had the following to say about the results: The power of Johnson & Johnson’s uniquely diversified portfolio was on full display this quarter, with strong operational sales growth reinforcing our confidence in 2025 guidance. During the quarter, we fortified our position as an innovation powerhouse with major advancements across our pipeline, including TREMFYA in … Read more

3 Undervalued Stocks to Consider Buying Now

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Dear readers:   With the markets retracing most of their recent drawdown, we’re taking a victory lap as we didn’t panic, nor should have you. We highlighted our wait-and-see approach amidst the worst of the pullback, and we expect the Magnificent 7 (large cap growth and big cap tech) to continue to propel the markets higher, as they have done.   We’ve been busy rolling valuation models as we finetune our assumptions for a great number of companies under coverage. While doing so, we came across three undervalued stocks that are also included in the simulated newsletter portfolios. We think they’re prime for highlight.   The three stocks are UnitedHealth Group (UNH), Nvidia (NVDA) and Alphabet (GOOG). We spend a lot of time on discounted cash-flow valuation, … Read more

Magnificent 7 Earnings Reports Not Bad Thus Far

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By Brian Nelson, CFA   Shortly after Trump’s Liberation Day, where the President unveiled lofty tariffs on numerous countries, we released our wait-and-see outlook for the equity markets, which thus far has proven to be the right move, with the markets largely recovering from the depths reached in April. The S&P 500 (SPY), for example, is down just 3.3% year-to-date, excluding dividends.   A lot has happened since Liberation Day, including easing of tariffs to a 10% baseline for most, if not all, countries, with the key exception of China, where tariffs remain extremely elevated and prohibitive. Many countries are now reportedly negotiating trade agreements with the White House, and we expect China to be added to that list soon, even if … Read more

Dividend Increases/Decreases for the Week of April 18

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Below we provide a list of firms that raised their dividends during the week ending April 18. The dividend reports of covered firms on this list will be updated shortly with the new information. To access our dividend reports use the ‘Symbol’ search box in our website header. Firms Raising Their Dividends This Week                          ASML (ASML): now $1.92 per share quarterly dividend, was $1.57. Bar Harbor Bankshares (BHB): now $0.32 per share quarterly dividend, was $0.30. Choice Properties Real Estate Investment Trust (CHP.UN:CA): now CAD 0.0642 per share monthly dividend, was CAD 0.0641. Coca-Cola FEMSA (KOF): now $0.8830 per share quarterly dividend, was $0.7811. Companhia Paranaense de Energia – COPEL (ELPC): now $0.1172 per share quarterly dividend, was … Read more

Trump Tariffs Higher than Expected; What We’re Doing

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By Brian Nelson, CFA The Trump tariff increases came in larger than what we were expecting, and it remains to be seen how they will flow through the global economy, as we monitor potential retaliatory tariffs from other countries. As it relates to the equity markets, we’re taking a wait and see approach at the moment as we monitor new policy changes related to trade, immigration, fiscal (tax), and regulations. In short, we’re not overreacting to the sell off as we won’t have a great handle on the tariff impact to companies for a few quarters when they report results post-tariff increases. That said, we’re expecting continued market volatility, with meaningful risk to the downside, before trade uncertainty alleviates in … Read more

Johnson & Johnson Issues Fourth Quarter Results

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Image Source: J&J By Brian Nelson, CFA On January 22, Johnson & Johnson (JNJ) reported better than expected fourth quarter results with both revenue and non-GAAP earnings per share exceeding the consensus forecasts. Fourth quarter sales growth came in at 5.3%, with operational growth of 6.7% and adjusted operational growth of 5.7%. Fourth quarter earnings per share came in at $1.41, while adjusted earnings per share came in at $2.04, both measures impacted by IPR&D charges related to the V-Wave acquisition. Adjusted diluted earnings per share was down 10.9% from the prior year period. Management had the following to say about the quarter: 2024 was a transformative year for Johnson & Johnson, marked by strong growth, an accelerating pipeline and industry-leading … Read more

Johnson & Johnson’s Shares Look Fairly Valued

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By Brian Nelson, CFA Johnson & Johnson (JNJ) reported third-quarter results on October 15 that beat the consensus forecast for both revenue and non-GAAP earnings per share. The company posted adjusted operational sales growth of 5.4% thanks to 6.4% expansion in Innovative Medicine and 3.7% growth in MedTech, while adjusted earnings per share came in at $2.42 in the quarter, down 9% as acquired IPR&D impacted results. Year-to-date free cash flow came in approximately $14 billion, up from $12 billion in the year ago period. J&J noted that it continues to advance its pipeline, including approvals for TREMFYA in ulcerative colitis and RYBREVANT + LAZCLUZE in non-small cell lung cancer. Management commentary was upbeat in the quarter:  Johnson & Johnson’s … Read more