JNJ

Johnson & Johnson Buys Momenta Pharmaceuticals

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Image Source: Johnson & Johnson – Second Quarter of Fiscal 2020 IR Earnings Presentation By Callum Turcan On August 19, Johnson & Johnson (JNJ) announced it was acquiring Momenta Pharmaceuticals Inc (MNTA) for $52.50 per share in cash through a deal worth $6.5 billion (or $6.1 billion when including Momenta Pharmaceuticals’ net cash position). At the end of June 2020, Momenta Pharmaceuticals had ~$0.45 billion in cash and cash equivalents on hand with no debt on the books. We include shares of JNJ as a holding in both our Best Ideas Newsletter and Dividend Growth Newsletter portfolios. Overview This deal will give Johnson & Johnson’s Janssen pharmaceutical unit access to Momenta Pharmaceutical’s drug pipeline portfolio which focuses on therapeutics that … Read more

August Best Ideas Newsletter!

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Image: The Best Ideas Newsletter portfolio. We migrated to weighting ranges at the beginning of 2018. The image above is as of the close April 15. — Hi everyone: — Trust you are well.  — Portfolio concentration among strong-performing equities has been the key to outperformance. Since the last update, we’ve witnessed some big moves from our top-weighted entities: Berkshire Hathaway (+10.7%), Facebook (+8.7%), and PayPal (+11.2%). These three entities comprise roughly 34% of the Best Ideas Newsletter portfolio at the high end of the weighting ranges, more than offsetting the weaker performance from lower-weighted Cisco and Intel during the month. We continue to focus on over-weighting our “best of the best” ideas within a portfolio setting, and we’re hoping to … Read more

HCA’s Latest Results Indicate Healthcare Providers Are Holding Up Better Than Expected

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Image Source: HCA Healthcare Inc – Second Quarter of 2020 Earnings Press Release By Callum Turcan The ongoing coronavirus (‘COVID-19’) pandemic has had a devastating impact on the financial performance of healthcare providers (operators of hospitals and other medical facilities) due to the decline in the number of elective surgeries performed. Please note elective surgeries tend to be more lucrative for healthcare providers than the other services they provide, generally speaking. Elective surgeries in many US states were indefinitely postponed when the pandemic first hit. In late March, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (‘CARES Act’) which included $100 billion in emergency funding for hospitals and healthcare providers to mitigate the financial blow from the pandemic … Read more

Second Quarter Earnings Roundup

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The figure above shows the performance of the simulated Best Ideas Newsletter portfolio from inception May 17, 2011, through December 15, 2017, relative to its declared benchmark, the S&P 500 (SPY), on an apples-to-apples basis, with dividends collected but not reinvested for both the newsletter portfolio and the SPY, as reported in the monthly newsletter. The simulated Best Ideas Newsletter portfolio outperformed the S&P 500, including reinvested dividends in the benchmark, since inception (May 17, 2011) and since the inaugural release of the newsletter (July 13, 2011) through the end of the measurement period (December 15, 2017). The results are hypothetical and do not represent returns that an investor actually earned. Past results are not indicative of future performance. Valuentum … Read more

Johnson & Johnson Beats Estimates and Raises Guidance

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Image Source: Johnson & Johnson – Second Quarter of 2020 IR Earnings Presentation By Callum Turcan On July 16, Johnson & Johnson (JNJ) reported second quarter 2020 earnings that beat both consensus top- and bottom-line estimates. Most importantly, Johnson & Johnson increased its full-year guidance for 2020 as the firm is well-prepared to ride out the ongoing coronavirus (‘COVID-19’) pandemic, in our view. We continue to like shares of JNJ in both the Best Ideas Newsletter and Dividend Growth Newsletter portfolios. As of this writing, shares of JNJ yield ~2.7%. Guidance Boost In the upcoming graphic down below, Johnson & Johnson provides a side-by-side comparison of the firm’s previous full-year guidance for 2020 as of April 2020 versus its current … Read more

Interview with Valuentum’s Callum Turcan

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Callum Turcan helps head up Valuentum’s research product and is co-editor of the company’s newsletters. We sat down with Callum to get his thoughts on new developments in the market and economy. Let’s kick things off with his thoughts on the recent Berkshire/Dominion deal. Callum: Interesting deal with Dominion (D) and one that likely fits in with Berkshire Hathaway’s (BRK.A/BRK.B) long-term utility/infrastructure strategy in North America. Berkshire has steadily grown its wind power generation business over the past decade, but until battery storage technology progresses further (with an eye towards the need for serious cost reductions), natural gas will continue to be used to meet electricity demand when wind turbines are operating at reduced capacity (and in general, as new … Read more

July Dividend Growth Newsletter

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“The COVID-19 pandemic has all but shown it’s not the economy, or next quarter’s earnings, or last year’s book-to-market ratio or last year’s P/E ratio that drives market prices and returns; it’s enterprise valuation. Read about the duration of value composition in Value Trap.” — Brian Nelson, CFA — To add our new options commentary to your membership, please register here ($500/year). — Hi everyone!  — Trust you are doing great. I thought we could all share in on a little chuckle with this meme of Mr. T. I’ve been working for years and years explaining how important enterprise valuation, or the discounted cash flow process, is to understanding stock market prices and returns, and how most valuation ratios such as the P/E ratio, for example, … Read more

Kroger Fighting for Market Share in the Online US Grocery Business

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Image Source: The Kroger Company – Fiscal 2019 Annual Report By Callum Turcan On June 18, The Kroger Company (KR) released its first quarter fiscal 2020 earnings (period ended May 23, 2020) that beat both top- and bottom-line estimates. Comparable store sales (excluding fuel) grew by 19% year-over-year as consumers flocked to its various grocery stores and supermarkets (under brands such as Fred Meyer, Fry’s Marketplace, Pick ‘n Save, and others) to stock up on consumer staples products as the coronavirus (‘COVID-19’) spread across North America. Kroger’s digital sales surged 92% year-over-year last fiscal quarter as curbside and home delivery options have become increasingly popular during the pandemic. Shares of KR yield ~2.0% and are trading in the upper bound … Read more

Recent Events Concerning Johnson & Johnson

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Image Source: Johnson & Johnson – First Quarter of 2020 IR Earnings Presentation By Callum Turcan We include Johnson & Johnson (JNJ) as a top-weighted holding in the Dividend Growth Newsletter portfolio and as a medium-weighted holding in the Best Ideas Newsletter portfolio. The firm’s Dividend Cushion ratio sits at a solid 2.1, and please note that this forward-looking dividend coverage ratio factors in our expectations that Johnson & Johnson will grow its per share dividend by mid-single-digits annually over the coming years. Johnson & Johnson earns a “GOOD” Dividend Safety rating and an “EXCELLENT” Dividend Growth rating, with shares of JNJ yielding ~2.8% as of this writing. In our view, Johnson & Johnson’s strong balance sheet and high quality … Read more

Reiterating Our Bullish Long-Term View on Stocks

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Reiterating Our Bullish Long-Term View on Stocks Image: The NASDAQ 100 Index remains resilient, bouncing off support, after breaking out to new highs recently. Some of our best ideas are included in the NASDAQ 100, and our favorite concentrations include exposure to big cap tech and large cap growth. We continue to be bullish on equities for the long run. — By Brian Nelson, CFA — Hi everyone, — Hope you are doing great! First, I wanted to let you know that we’re still working to get the second release of the survey out to you. Your participation in the survey will determine whether we launch a new business, so please do fill it out and keep a watchful eye out for … Read more