So, how were Johnson & Johnson's (NYSE: JNJ) Q4 earnings? To me, they were par for the course for an iconic blue-chip Dow component. In other words, they weren't the stuff of a growth investor's dreams, but they were solid and respectable and exactly what a long-term investor might expect.
J&J, whose competitors include Procter & Gamble (NYSE: PG) and Merck (NYSE: MRK), didn't fare so well on the top line during the quarter. Sales decreased almost 5%. Not so surprising, considering the way the dollar had been acting. Adjusted income increased almost 7% to $0.94 per share. That balanced things out, and it represented a beat of analyst expectations to the tune of two pennies. But what should we make of the results?
Is J&J a good investment? Well, some would certainly argue that any time is a good time to be in J&J. It's true, really, if you look at a long-term chart and review the health company's dividend history. In fact, I was thinking recently of picking up some J&J. It would be a safer bet than some other companies out there. And Steven Halpern gathered some info on J&J recently that points to the arguably cheap valuation of the business. I tend to agree. But...
Look, let's go to the tape for a moment. J&J didn't really rally much on the news of its quarterly numbers. What was it down, something like 1% or so? Okay, not a huge sell-off by any means, but if you take a look at a one-year chart (which you can do by adjusting the parameters of the graph at the AOL quote for J&J) , you can see that the stock looks as if it might go back to its 52-week low. I say it might even go beyond that low.
Whatever happens, I think a lower price for J&J is in the offing. Not only is the chart kind of tough to look at, but Jon Ogg reported in his Closing Bell piece that guidance wasn't exactly met with open arms. Who knows, maybe traders will digest the numbers over the next several days and give J&J a bid. For me, I see nothing from the results and the price action that would indicate to me that J&J is a solid idea right here, right now. It's trading at a decent yield, but with sentiment on Wall Street still in the dumps, I'm still shy about stepping up and buying...
Disclosure: I don't own any company mentioned; positions can change at any time.
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Reader Comments (Page 1 of 1)
2-14-2009 @ 11:33AM
Charles Lattka said...
I've got jnj, and i'm staying in for the long haul. Let it go down and i will buy more. You can't live without their products.