Well, the market was in the dumps yesterday and is even worse today. So this may be a good time to check on my list of stocks for those looking for equities that are stable enough to ride out this bearish storm.
The standard for comparison will be the Standard & Poor's 500 Index, which closed on June 30, 2008 at 1,280.00. The following are the five stocks with closing prices from July 1.
1) Johnson and Johnson (NYSE: JNJ) -- when recommended the stock closed at $64.34 and paid a 2.89% dividend yield. It finished at $71.70 -- up 11.44%
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) -- when recommended the stock closed at $45.80 and paid a 1% dividend yield. It finished at $46.41-- up 1.3%.
3) Chubb Corp. (NYSE: CB) -- when recommended the stock closed at $49.01 and paid a 2.64% dividend yield. It finished at $48.39 -- down 1.26%.
If Barack Obama is receiving advice from "my pal Warren" then he must not be listening. There is no way that Warren Buffett, the national debt hawk, would support Obama's stupid idea of giving another $1,000 back to every family in America. It is reported that he would pay for this by creating a windfall profit tax on oil companies.
This give-away program is an attempt to buy votes plain and simple. It would add to the national debt, discourage oil companies from investing and worse it would handicap American companies more than others and mortgage more of our children's futures.
The last thing the people of the United States need is more deficit spending. If we did tax oil companies, which I am against, I would only support using the funds for expanding education, research and development in science and engineering with the goal of maintaining our waning leadership in technology.
Johnson & Johnson (NYSE: JNJ) Q2 2008 Earnings Conference Call July 15, 2008 8:30 AM ET Management Summary
Operator
Welcome to the Johnson & Johnson second quarter 2008 earnings conference call. (Operator Instructions) I would now like to turn the conference call over to Johnson & Johnson.
Louise Mehrotra, Vice President of Investor Relations
Good morning and welcome. I'm Louise Mehrotra, Vice President of Investor Relations for Johnson & Johnson, and it is my pleasure this morning to review our business results for the second quarter of 2008. With me on the call today is Dominic Caruso, Vice President of Finance and Chief Financial Officer.
A few logistics before we get into the details. This review is being made available to a broader audience via a webcast accessible through the investor relations section of the Johnson & Johnson website. The press release that was sent to the investment community earlier this morning includes the schedule showing sales for major products and/or business franchises to facilitate updating your models. The press release is also available on the Johnson & Johnson website. I will review highlights of the second quarter 2008 results for the corporation and for our three business segments. Following additional remarks from Dominic, we will open the call to your questions. We expect the total call to last approximately one hour.
Johnson & Johnson (NYSE: JNJ) shares rose over 2% by 12:45 on a day the market saw some scary dips earlier and the S&P 500 is still in the red.
The health-care giant is rising after it reported its second-quarter financial results, posting an 8% growth in profit to $1.18 per share (excluding one time charges) and a 9% increase in total revenue to $16.45 billion. The results handily beat analyst expectations (according to Thomson Financial) of $1.12 per share, on revenue of $16 billion. Not only that, but the company also increased its 2008 earnings forecast.
J&J execs claim the company wasn't being significantly hurt by the weakened U.S. economy, and judging from the effect of the lower dollar, which was responsible for 5.6% of the 9% higher revenue, perhaps they're right. Still, the company can't ignore that while international sales jumped 16.2%, U.S. sales increased only 2.1%.
But among the different pharmaceutical companies, it seems there is little doubt that J&J is better poised to ride this global economic downturn; as opposed to to pure-play pharmas, J&J has a more diversified business model. Already the difference was clear in this quarter's results and will probably make even more of a difference in the future, as many pharma companies lose sales to generic drug makers when products go off patent.
Updating the story with the final numbers heading into the week end. The market looked sad again today, so I thought I would spot-check Serious Money: Five stable stocks for troubled times, to see if my picks, (suggested watchlist considerations) were holding up...so far so good, sort of...
The standard for comparison will be the Standard & Poors 500 Index, which closed on June 30, 2008 at 1,280.00. The following are the five stocks with closing prices from July 1.
1) Johnson and Johnson (NYSE: JNJ) closed at $64.34 and pays a 2.89% dividend yield. (NOW $66.53 -- up 3.4%) finished at $66.26 -- up 2.98%.
2) Teva Pharmaceuticals ADR (NASDAQ: TEVA) closed at $45.80 and pays a 1% dividend yield.( NOW 42.58 -- down 7%) finished at $41.78 -- down 8.78%.
3) Chubb Corp (NYSE: CB) closed at $49.01 and pays a 2.64% dividend yield. (NOW $47.51 -- down 3%) finished at $47.56 -- down 2.96%.
After seeing the interest in yesterday's Serious Money: Five stable stocks for troubled times, I decided to track the stocks on a quarterly basis to see how they hold up over time (otherwise, what would be the purpose of discussing them in the first place?).
I said that all five have shrewd, conservative management teams and have been in the right place, at the right time -- and prepared. The standard for comparison will be the Standard & Poors 500 Index which closed on June 30, 2008 at 1,280.00. Although my original story was published yesterday, I will be using the second quarter end point for my five stocks as well.
On 3/13/08, the FDA Oncologic Drugs Advisory Committee (ODAC) is scheduled to review the use of Erythropoiesis stimulation agents, including Aranesp and JNJ's Procrit, to treat chemotherapy induced anemia.
AMGN March option implied volatility is at 51; April is at 41; above its 26-week average of 33 according to Track Data, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
It is interesting to see how one piece of news can have a different impact on two stocks. The news? The Food and Drug Administration found that anemia drugs are tied to increased risks of death and faster-spreading tumors at high doses.
Amgen Inc. (NASDAQ: AMGN) makes Aranesp and Epogen, while Johnson & Johnson (NYSE: JNJ) makes Procrit, all used to help cancer and kidney disease patients overcome anemia. But now the FDA says these drug show greater risks for patients with certain cancers on tumor progression and survival, as well as blood clots. While both companies believe the risks were seen when the drugs were given for unapproved uses, including higher-than-recommended doses, it is possible that following the study, the FDA may recommend to end the use of these drugs for patients whose anemia is caused by cancer chemotherapy, or who are at greater risk, but still allow it for kidney disease patients.
Still, as some analysts believe, with the recent updates both companies had on product prescribing and labeling, it is unlikely the drugs will be completely inadvisable for use in cancer patients as they allow the cycle of chemotherapy to continue more smoothly, helping to strengthen them after each treatment. It is more likely the companies will work with the FDA for better regulation on these drugs.
On the news, Amgen shares fell nearly 2%, while JNJ shares climbed over 1%. Surprising? Not really.
Yesterday when I posted Why complain about GE and not JNJ -- a puzzle? I got my answer. Investors do have patience, but it's limited. They will wait three years for positive results, but maybe not five, and ten -- forget about it!
As you can see from yesterdays' chart comparing three-year performance, there is no difference and in both cases the stocks are down. The difference is nobody is demanding that heads should roll at Johnson & Johnson (NYSE: JNJ) while they are at General Electric Company (NYSE: GE).
I have been following General Electric Company (NYSE: GE) and Johnson & Johnson (NYSE: JNJ) for many years. This is probably very common among investors since both are broadly held, very large-cap stocks. Both companies have illustrious histories, strong management, and have been very rewarding to investors over the years -- but not the past few years!
Both stocks seem undervalued to me and I have been thinking about buying some shares. I own some JNJ already and might want to own GE if I can get it at a deep discount. This got me thinking about another issue. Investors have been expressing their frustration with GE's lack of appreciation over the last few years and some have gone as far as to call for the split up of the company and/or the resignation of CEO Jeffrey Immelt.
For some reason Johnson and Johnson has not suffered the same fate. However, when you look at the following chart that shows three year stock performance you will notice great similarity.
Johnson & Johnson (NYSE: JNJ) shares are rising today even after the company announced on Friday evening that its Cordis subsidiary issued a world-wide recall for about 132,000 balloon catheters used to expand blood vessels. The company had determined that problems with the devices could potentially cause injury or death, though no deaths have been reported. JNJ says the recall will not have a significant financial affect on the company and investors seem to agree with this assessment, as the stock has been trading slightly higher this morning. If you think that the company won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on JNJ.
After hitting a one-year low of $59.72 in July, the stock hit a one-year high of $68.85 earlier this month. JNJ opened this morning at $62.66. So far today the stock has hit a low of $62.50 and a high of $63.05. As of 10:30, JNJ is trading at $62.85, up $0.39 (0.6%). The chart for JNJ looks bullish but deteriorating, while S&P gives the stock a positive 4 STARS (out of 5) buy rating.
The FDA suggested that all cold and cough medications should be kept out of the mouths of any child under the age of two years. This had been expected for a while and the shoe finally dropped this week. Have some children's Tylenol or Pediacare in the cabinet for that toddler? Out it goes. These products will soon carry a stern warning which will include: "serious and potentially life-threatening side effects can occur."
The FDA has also said that these targeted cold and cough medications don't help kids under 6. But that's not all -- cough and cold medications for older children are also being looked at by the FDA, and there may be a decision come this spring. Those pre-teen kids may be out of luck as well when it comes to over-the-counter decongestants, antihistamines and cough suppressants.
Boston Scientific (NYSE: BSX) is a company in trouble. It spent too much for medical device company Guidant, leaving it with $8.3 billion in debt. And sales of its drug-coated stents have been hurt by clotting problems. The company lost $272 million in the last quarter.
The combination of high debt and poor earnings has done a great deal of damage to the stock. The company's shares are down about 22% this year.
Boston Scientific has come up with a simple plan, which is to sell itself off in pieces until its debt comes down to a level that it can service. Today, the company sold its cardiac surgery and vascular surgery units for $750 million. The buyer was Getinge, a Swedish company. The two units were part of Guidant.
The announcement is another example of the hideous cycle that begins when companies overreach. From late 2003 to early 2005, before BSX bought Guidant and took on mountains of debt, its shares moved from $13 to $35. Earnings were strong and shareholders were happy. But BSX management could not resist buying another medical device company and got into a brutal bidding war with Johnson & Johnson (NYSE: JNJ), which pushed the price of Guidant to an irrational level.
Now, Boston Scientific can sell off what it bought, but probably at a lower price.
Douglas A. McIntyre is an editor at 247wallst.com.
Check your medicine cabinet for the following medicines for infants included in today's voluntary recall from Johnson & Johnson's (NYSE: JNJ) McNeil-PPC:
Concentrated Infants' Tylenol Drops plus Cold
Concentrated Infants' Tylenol Drops plus Cold & Cough
Pediacare Infant Drops Decongestant
Pediacare Infant Drops Decongestant & Cough
Pediacare Infant Dropper Decongestant
Pediacare Infant Dropper Long-acting Cough
Pediacare Infant Dropper Decongestant & Cough
According to its press release, the company has found "rare instances of misuse leading to overdose, particularly in infants under two years of age."
The recall does not include similar medicines for children two or older, or single-ingredient pain relievers and fever reducers for infants. The company has not yet divulged the scope or dollar value of this recall.
The company is cooperating with the Consumer Healthcare Products Association in a recommendation to the FDA to prominently label all such products in the future with the warning 'Do not use in children under two years of age."
The two brands included in the recall came to Johnson & Johnson in its purchase of Pfizer's (NYSE: PFE) Consumer Healthcare business late last year.
The medical supply company claims that the organizations own "separate and distinct rights" to the logo. However, JNJ protests the not-for-profit's right to license the logo to other for-profit companies for use on items as diverse as baby mitts, nail clippers and humidifiers.
The Red Cross traces the history of the symbol back to Italy in 1859, where volunteers first organized to treat battlefield wounded. In the U.S., Clara Barton of Civil War fame brought the movement to these shores. With the signing of the Geneva Convention in 1864, the Red Cross emblem was officially recognized as the symbol of those treating the sick and wounded during conflicts.
From my vantage point, I'd say a pox on both their houses. The Red Cross organization's failure to safeguard the brand from trivialization dishonors their long tradition, and Johnson & Johnson's lawsuit will only serve to sully both their names.
In a related story, rumors persist that Johnson & Johnson is considering a similar suit against the Catholic Church, as well as major Christian denominations, who persist in using the company's trademark cross in their religious ceremonies. (This is a joke. I hope, anyway.)
Well, the market was in the dumps yesterday and is even worse today. So this may be a good time to check on my list of stocks for those looking for equities that are stable enough to ride out this bearish storm. 
If Barack Obama is receiving advice from "my pal Warren" then he must not be listening. There is no way that Warren Buffett, the national debt hawk, would support Obama's 
Johnson & Johnson
Updating the story with the final numbers heading into the week end. The market looked sad again today, so I thought I would spot-check 
Amgen
Yesterday when I posted 
The Food and Drug Administration has officially declared 
Check your medicine cabinet for the following medicines for infants included in today's voluntary recall from 
Yesterday, 
Apple (AAPL) iTunes loses artists - an antitrust problem?
U.S. Q2 GDP of 3.3% likely to be fleeting
Cramer on BloggingStocks: Don't bother with the private-equity chatter 
