JNJ

Thank you…

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By Brian Nelson, CFA Earlier this week, I received an email from a colleague and valued member of our services. I wanted to share it here for others to read. I haven’t included his name, but if he wants me to, I can add it in. It is filled with wisdom, experience and kindness. And it really made my year to read his words. The Valuentum community, I believe, is the best community of investors out there. Sir, if you do happen to read your own email on our site, we very much have appreciated your feedback, and we hope to continue to live up to your praises. We are dedicated, and our team has been rejuvenated by your words. … Read more

Johnson & Johnson Registers Strong Fourth Quarter Performance; 2014 Outlook Conservative

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Johnson & Johnson (JNJ) has built one of the most comprehensive bases of health care businesses and generates an impressive 70% of revenue from top positions in the respective markets in which it operates. The health care and consumer giant remains focused on innovation and generating incremental revenue from new products as it broadens its geographic presence. Johnson & Johnson’s fourth-quarter performance, released Tuesday, showed that it continues to execute at a very high level. The company’s sales advanced 4.5% in the fourth quarter (6.3% excluding currency) thanks to strong top-line performance in its pharmaceutical division, which witnessed revenue expand more than 13%, excluding the impact from currency. Domestic sales leapt 7.4%, while international sales increased 2.4% (5.6% excluding currency). … Read more

The Best Ideas for 2014 and Beyond: Part II

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A portion of this article is excerpted from the January 2014 edition of the Dividend Growth Newsletter. Valuentum has two actively-managed portfolios: a Best Ideas portfolio and a Dividend Growth portfolio. Each portfolio has different goals and strategies. The Best Ideas portfolio seeks to find firms that have good value and good momentum characteristics and typically holds them from a Valuentum Buying Index rating of a 9 or 10 to a rating of a 1 or 2. The goal of the portfolio is to generate a positive return each year and to exceed the performance of a broad market benchmark. The Dividend Growth portfolio seeks to find underpriced dividend growth gems that generate phenomenal levels of cash flow and have … Read more

Three Reasons Why Dividend Growth Investors Are Quite Savvy

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A version of this article appeared on our website on October 1, 2013. There are many different approaches to investing, but we think dividend growth investors are quite savvy, especially when they combine a rigorous dividend growth process in the form of the Valuentum Dividend Cushion ratio with the valuation rigors behind the Valuentum Buying Index. Let’s examine the three reasons why we think dividend growth investors are a smart group in the age of ultra-low interest rates. #1. Fool Me Once, Shame on You…Fool Me Twice, Shame on Me Today’s dividend growth crowd has seen enough. First, they witnessed the dot-com bubble (1997-2000), a period in stock market history where firms’ stock prices soared in some cases as a result … Read more

Third-Quarter Industrial Earnings Support Exposure in Best Ideas Portfolio

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For starters, if you haven’t yet read through our piece on General Electric’s (GE) third-quarter earnings, it’s a must-read. The step-up in backlog and order trends at the industrial behemoth are quite remarkable, and we think GE’s performance bodes well for the sector as a whole. Still, let’s drill down on a few themes across the industrial space and how our Best Ideas portfolio is well-positioned to capture the strength of underlying trends. Danaher (DHR) Danaher reported third-quarter results Thursday that showed revenue expansion of 5.5% and diluted net earnings per share growth of 9%. The company generated 30 basis points of operating-margin improvement and generated more than $800 million in free cash flow, or about 17.8% of revenue (a very … Read more

Johnson & Johnson Remains One of Our Favorite Dividend Growth Gems

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On Tuesday, Dividend Growth Newsletter portfolio holding Johnson & Johnson (click ticker for report: ) issued solid third-quarter results and raised its full-year earnings guidance. The firm’s domestic sales jumped 1.7% while international sales leapt more than 4% from last year’s period (consolidated sales were 3.1% higher—4.7% adjusted for negative currency impacts). We were particularly pleased with performance from J&J’s pharmaceutical division, which experienced operational revenue growth of 10%+ thanks to strength from antipsychotic INVEGA SUSTENNA, REMICADE, SIMPONI, and STELARA. Diluted earnings per share advanced nearly 9% on a year-over-year basis, to $1.04. Looking ahead, we were also quite pleased with the company’s outlook for the remainder of 2013. Johnson & Johnson upped its earnings guidance for the year to … Read more

MAKO Receives a Tremendous Offer from Stryker; Is Intuitive Surgical Next?

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The M&A flurry continued Wednesday morning as medical devices giant Stryker (click ticker for report: ) announced it would acquire MAKO Surgical (MAKO) for $30 per share, or roughly $1.65 billion. The deal represents an 83% premium to MAKO’s Tuesday closing price, but the value remains below MAKO’s peak in late 2011 and early 2012. MAKO remains unprofitable, though the firm has experienced solid revenue expansion during the past few years, going from $34 million in revenue during 2009 to $103 million during 2012. The firm isn’t expected to earn a profit in 2013, though revenue is estimated to jump 23% from the year-ago period. Given existing conditions, MAKO might not turn a profit until at least 2015, in our … Read more

Strong Second Quarter Results at Johnson & Johnson

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Tuesday morning, pharmaceutical and personal care giant Johnson & Johnson (click ticker for report: ) reported fantastic second quarter results. Revenue surged 9% year-over-year to $17.9 billion, easily exceeding consensus expectations. Excluding the impact of one-time events, earnings per share also came in ahead of consensus estimates, growing 14% year-over-year to $1.48. Free cash flow year-to-date is roughly $6 billion, equal to approximately 17% of revenues. Johnson & Johnson grew at a solid clip in both the US and abroad, with revenue expansion in the US of 8% year-over-year and international currency-neutral revenue growth of 12%. Importantly, the firm is experiencing tremendous growth in BRIC (Brazil, Russia, India, China) nations, as shown below.   Image Source: JNJ Q2 FY2013 Investor presentation … Read more

ASCO Reveals That Big Pharma Is Alive

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This weekend, the annual American Society of Clinical Oncology (ASCO) kicked off in Chicago. The theme this year? Immunotherapy. The conference is traditionally littered with news from biotech companies revealing results from clinical studies, but this year’s event also included some news from big phama companies that haven’t been bursting with pipeline breakthroughs in years. Let’s take a look at some of the news out of the event. Firms Highlighted: Bristol-Myers Squibb, Merck, GlaxoSmithKline, Amgen, Galena Biopharma, BioMarin, Celgene. Bristol-Myers Squibb Source: BMY ASOC 2013 Presentation Bristol-Myers Squibb (click ticker for report: ) isn’t exactly what we’d call an under-appreciated company. Over the past year, shares are up 43%. However, this year’s ASCO only further ignited the fire. The company … Read more

Johnson & Johnson’s Long-term Tailwinds Are Intact

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Diversified medical and consumer products firm Johnson & Johnson (click ticker for report: ) reported solid fourth-quarter results Tuesday morning. Sales jumped 8% year-over-year to $17.6 billion, roughly in-line with consensus expectations. Earnings were slightly better than anticipated, growing 5.3% year-over-year to $1.19 per share—after adjusting for several special items. Johnson & Johnson’s international expansion outpaced its domestic growth, with international sales jumping 8.9% on a reported basis (11.2% excluding currency) while its domestic business grew 6.8%. The acquisition of Synthes was the big needle-mover in the period, as it was responsible for 5.6 percentage points of the total sales increase. For the year, the growth rate of the firm’s Medical Devices and Diagnostics’ segment exceeded that of other segments, though pharmaceutical results … Read more