JNJ

Consumer Staples Earnings Roundup

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Image Source: Mike Mozart Let’s take a look at the earnings reports of some of the largest consumer staples companies. Margin performance left a good deal to be desired across the space as transportation and raw material costs are largely on the rise, and organic growth trends could be better. Companies included: Kellogg, Kraft Heinz, Kimberly-Clark, and Colgate Palmolive. By Kris Rosemann Macroeconomic uncertainty stemming from geopolitical tensions and potentially slowing economic growth in emerging markets have played a role in stagnant top-line growth for consumer staples entities of late, and ongoing pricing and promotional battles are not likely to go away anytime soon as the proliferation of the convenience of online shopping has brought about a new era in … Read more

Johnson & Johnson Driven By Pharma Growth

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Image Source: JNJ third quarter earnings presentation Simulated newsletter portfolio idea Johnson & Johnson turned in a strong third quarter report that was driven once again by growth in its ‘Pharmaceutical’ segement, namely its ‘Oncology’ division. By Kris Rosemann Johnson & Johnson (JNJ) reported 3.6% year-over-year revenue growth in the third quarter of 2018 thanks to ongoing strength in its ‘Pharmaceutical’ segment, which turned in reported revenue growth of 6.7% as reported revenue in its ‘Oncology’ division within the segment leapt 36%+ from the year-ago period. Key sales growth leaders in ‘Oncology’ were DARZALEX, IMBRUVICA, and ZYTIGA, while REMICADE revenue erosion from biosimilar competition was more than offset by strength in other key ‘Immunology’ drugs including STELARA and SIMPONI/SIMPONI ARIA. … Read more

Best Ideas Newsletter Portfolio Not Bad Thus Far in 2018

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Part of what we take pride in at Valuentum is telling things how they are. If things are going great, we let you know. If things aren’t going as good as they could be, we don’t hold back. In the year of crypto and cannabis, 2018 hasn’t been the best year for the simulated Best Ideas Newsletter portfolio, but it hasn’t been bad either.  By Brian Nelson, CFA We wrote up an extensive piece on the background of the simulated Best Ideas Newsletter portfolio earlier this year, and we encourage everyone to have a read of that here (pdf). We made some changes to the goals of the newsletter portfolio prior to the beginning of this year. For starters, we … Read more

Pfizer: Lots of Moving Parts in a Generally-Inspiring Second Quarter

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Image Source: Pfizer We came away generally impressed with the progress at Pfizer during the second quarter as the company begins to replace its current patent protected line-up with next-generation treatments. Pfizer continues to gain political favor with its decision to forgo price hikes on its product line-up while announcing a re-organization of the business structure. By Alexander J. Poulos Key Takeaways There has been lots of political intrigue as Pfizer seeks to gain favor with the White House via rolling back its annual drug price hikes. The company announced plans to split into three companies, which we view as the first step towards a complete split of the company. In the second-quarter earnings report, released July 31, Pfizer raised … Read more

On Diversification

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Diversification is one of the most important components of equity investing. By Brian Nelson, CFA I wanted to touch base briefly today to see how everyone is doing, and how we can continue to make our website better. We’ve been getting a lot of great feedback on the ability to download our data in Excel and create your customized screens. Instead of having to click on a number of the web pages on the website to access the screens, all you have to do is download the Excel file, and use the standard sorting functionality in it. Let us know if you think we need to host a walk through of how to use the Excel screener. We think it … Read more

Valuentum’s Weighted Average Cost of Capital (WACC) Distribution

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The weighted average cost of capital is one of the most subjective measures in corporate finance, but it is also one of the most important ones. “The most important item over time in valuation is obviously interest rates…If interest rates are destined to be at low levels…It makes any stream of earnings from investments worth more money. The bogey is always what government bonds yield….Any investment is worth all the cash you’re going to get out between now and judgment day discounted back. The discounting back is affected by whether you choose interests rates like those of Japan or interest rates like those we had in 1982…When we had 15 percent short-term rates in 1982, it was silly to pay … Read more

Johnson & Johnson: Headline Risk But Business Solid

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We remain big fans of the steady hand displayed by the venerable Johnson & Johnson as the pharmaceutical bellwether continues to perform admirably. During its second-quarter results, we came away impressed with the continued strength in the Oncology division, which masks the deceleration in growth in Cardiovascular Disease. There continues to be headline risk with respect to talcum powder litigation, but J&J’s underlying business remains solid, in our view. By Alexander J. Poulos Examining J&J’s Franchise Strength We wrote up Johnson & Johnson’s (JNJ) second-quarter results July 19, “Johnson & Johnson Powers Ahead, Litigation Overhang Remains,” but we think a closer examination of the underlying trends of the three largest components of J&J’s pharma division will be helpful to readers. … Read more

AbbVie’s Outlook Remains Blurred

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Image Source: Global Panorama We remain bearish on the outlook for AbbVie as we do not believe the clinical pipeline will be able to adequately offset the loss of revenue when key product Humira loses patent protection beginning in October as a biosimilar enters the European market. By Alexander J. Poulos Key Takeaways AbbVie remains over-reliant on sales of Humira to drive top-line sales–a major red flag as the worldwide patent protection is about to lapse. Humira will lose patent protection in Europe, and thus in our view, we think we are about to witness peak Humira sales in 2018. We feel investors are over-estimating the productivity of the clinical pipeline, and while there is always a chance AbbVie may … Read more

Johnson & Johnson Powers Ahead, Litigation Overhang Remains

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Image Source: J&J quarterly presentation. Amid headline pressure from consumer lawsuits, Johnson & Johnson continues to execute well, as evidenced by its solid second quarter report. By Kris Rosemann Newsletter portfolio holding Johnson & Johnson (JNJ) turned in a solid second-quarter 2018 report that revealed total reported sales growth of 10.6% on a year-over-year basis thanks in part to a nearly 12% international sales increase. Double-digit growth in the company’s ‘Pharmaceutical’ business and improving top-line momentum in ‘Medical Devices’ were cited as key drivers of the top-line expansion. A number of drugs reported impressive sales growth rates in the second quarter, but most impressive may have been its Oncology division delivering 42% reported year-over-year growth. Adjusted diluted earnings per share … Read more

What Are the Qualities of Highly-Rated Stocks on the Valuentum Buying Index?

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If you were a CEO, what are the 7 most important metrics to focus on to get a rating of 10 on the Valuentum Buying Index? This is a great question because it hits at the absolute heart of the most important concept of investing. Investing may be about buying a great company with a solid and growing dividend, but it most certainly is about buying a great company at a discount to intrinsic value. The difference between what someone can pay for something and what something is worth is the most important concept of investing: price versus value. The price-versus-value component is an integral part of the Valuentum Buying Index. In fact, it is the first component. After all, … Read more