4 Weeks Ago- Johnson & Johnson (JNJ)
Johnson & Johnson has had a very flat month. When we initially looked at it, it was trading at $64.58 - today it closed at $64.82 for a big gain of 0.3%. The stock started the month down but has since recovered. With any company this size, there are a number of news stories almost every day, but the most recent big news is that Johnson & Johnson has sued rivals Boston Scientific, Guidant, and Abbott Labs. The lawsuit claims that the rivals reached an agreement on the acquisition of Guidant by Boston Scientific because of information leaked to Abbott. We do not believe this lawsuit will negatively affect Johnson & Johnson in the long-run, but instead may be beneficial to the company as it could be detrimental to their competitors.
We believe Johnson & Johnson is still a very good value for the enterprising investor following Benjamin Graham's strategies. We believe Johnson & Johnson has potential to reach $81 within the next few years.
Neither of us held a position in Johnson & Johnson at the time of publication. Also, please read our disclaimer.
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You stated that you believe JNJ is a value based on Graham's criteria for the enterprising investor. However, it currently has a price/book ratio of 4.7 which is far above the p/b that Graham would have been comfortable with. Also, with a P/E over 17 it is at the high range that Graham would recommend even for the enterprising investor. Just wondering what went into your calculations.
# Posted by: CJ at September 28, 2006 10:25 AM