Health care giant Johnson & Johnson’s profit more than doubled in the second quarter, partly driven higher from a recent sale and strong medical-device sales, but also made possible by an easy comparison to a figures from a year ago. In addition, the company increased its full-year profit forecast, offering investors another optimistic signal that it’s successfully moving past a period marred by product recalls and manufacturing problems. …read more
Source: FULL ARTICLE at Forbes Latest
By John Maxfield, The Motley Fool
Filed under: Investing
The famed hedge fund manager George Soros, known for breaking the British pound in 1992, shocked the world on Friday by announcing a 7.91% stake in J.C. Penney . The news sent shares of the ailing retailer sharply higher, making it the best-performing stock on the S&P 500 that day.
Besides throwing J.C. Penney a much-needed lifeline in the equity markets — its shares are down nearly 50% over the past year alone — the move reaffirms one of Soros’ central tenets: “The worse a situation becomes, the less it takes to turn it around, and the bigger the upside.”
The stake, valued at $295 million, makes J.C. Penney the third largest holding of Soros Fund Management, the privately owned hedge fund that’s largely responsible for managing its founder’s wealth. It also adds to an increasingly diverse portfolio of stocks. Among the fund’s other large holdings are companies as disparate as AIG , Johnson & Johnson , and Google :
George Soros’ 10 Largest Stock Holdings | Create infographics
This is contrarian investing at its best — and particularly Soros’ three largest holdings, all of which have run into hard times over the past few years.
The Motley Fool’s chief investment officer has selected his No. 1 stock for the next year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.
The article Billionaire George Soros’ 10 Largest Stock Holdings originally appeared on Fool.com.
John Maxfield has no position in any stocks mentioned. The Motley Fool recommends and owns AIG, Google, and Johnson & Johnson and has options on AIG. Try any of our Foolish newsletter services free for 30 days. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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Source: FULL ARTICLE at DailyFinance
A look at health care giant Johnson & Johnson’s first-quarter revenue by division and for selected products and categories:
CONSUMER HEALTH PRODUCTS 1Q 2013 1Q 2012 Change
U.S. Total $1.35 B $1.32 B up 2.4 percent
International Total $2.33 B $2.28 B up 2.1 percent
Worldwide Total $3.68 B $3.6 B up 2.2 percent
Nonprescription drugs/nutritionals-U.S. $436 M $381 M up 14.4 percent
PRESCRIPTION DRUGS 1Q 2013 1Q 2012 Change
U.S. Total $3.47 B $3.03 B up 14.7 percent
International Total $3.3 B $3.11 B up 6.1 percent
Worldwide Total $6.77 B $6.13 B up 10.4 percent
Remicade (immune disorders) $1.6 B $1.52 B up 5.2 percent
Stelara (psoriasis) $346 M $221 M up 57 percent
Prezista (HIV) $367 M $324 M up 13.3 percent
Concerta (attention deficit disorder) $256 M $308 M down 16.9 percent
From: http://feeds.foxnews.com/~r/foxnews/national/~3/_POnqhJI34c/
Hundreds of people have gathered for the funeral ceremonies for Barbara Piasecka Johnson, a Pole who worked as a maid for an American heir to the Johnson & Johnson fortune before marrying him and eventually inheriting much of his wealth.
Johnson, an art collector and philanthropist, died April 1 near Wroclaw, in southwestern Poland, where she lived and studied art history before moving to the United States in 1968. She is to be buried in the city on Monday.
This farmer’s daughter found a job as a cook then chambermaid for J. Seward Johnson. In 1971 she became his third wife. After his death in 1983 she inherited some $300 million from a fortune of over $500 million, following an ugly legal battle with his children.
From: http://feeds.foxnews.com/~r/foxnews/world/~3/pgu49vpvrTM/
By Alex Dumortier, CFA, The Motley Fool
Filed under: Investing
The S&P 500 and the narrower, price-weighted Dow Jones Industrial Average just recorded their best weekly performances of the year. The S&P 500 is now up 11.4% on the year.
Not surprisingly, then, the VIX , Wall Street‘s fear gauge, plumbed its lowest level since March 15 on Friday, even dipping below 12 on an intraday basis. (The VIX is calculated from S&P 500 option prices and reflects investor expectations for stock market volatility over the coming 30 days.)
The earnings drum is beating
As I’ve argued several times in this column, the rally that began off last year’s June low is being driven by valuation, rather than earnings, with the market willing to pay a higher multiple for a dollar of earnings, as investor risk aversion continues to dissipate. There are good reasons for this — to a certain extent — as fears of global macro dislocations have receded. However, I think it’s worth sounding a few words of caution.
At a price-to-earnings ratio of 14.3, the S&P 500 may not look expensive on the basis of 2013 operating earnings per share; however, that figure masks the range of valuations across the different sectors. In a yield-starved environment, investors have been snapping up shares that pay rich dividends, and that enthusiasm is reflected in the P/E multiples of the consumer staples, telecoms, and utilities sectors, at 17.4, 19.7, and 16.4, respectively.
Furthermore, I continue to believe that the S&P 500’s current forward multiple understates how expensive it really is. Consider that the 14.3 P/E assumes that operating earnings per share will rise nearly 15% year-on-year in 2013. That figure strains credulity; 2012 growth was 0.4%. On this point, first-quarter earnings will provide us with some clues either way, and we have a heavy week ahead of us in terms of earnings announcements, with nearly 15% of the companies in the S&P 500 reporting quarterly results, including more than a third of the Dow components — 11, to be exact:
If you’re ready to invest based on competitive advantage, long-term value creation, and valuation, The Motley Fool’s chief investment officer has selected his No. 1 stock for this year. Find out which stock it is in the brand-new free report: “The Motley Fool’s Top Stock for 2013.” Just click here to access the report and find out the name of this under-the-radar company.
The article Next Week’s Earnings: Handicapping the Bull originally appeared on Fool.com.
Fool contributor Alex Dumortier, CFA has no position in any stocks mentioned; you can follow him on LinkedIn.
The Motley Fool recommends American Express, Coca-Cola, Intel, Johnson & Johnson, McDonald’s, and UnitedHealth Group and owns shares of Bank of America, General Electric, Intel, IBM, Johnson
From: http://www.dailyfinance.com/2013/04/14/next-weeks-earnings-handicapping-the-bull/
By Dan Carroll, The Motley Fool
Filed under: Investing
Earnings season is in full swing, and a full third of the companies on the Dow Jones Industrial Average are set to report last quarter’s data this week. From consumer-goods giants such as Coca-Cola to health-care staples such as Johnson & Johnson, seemingly every sector of the blue-chip index is on pace to capture investors’ attention in the next few days. Let’s look at what you should be watching out for as America’s most prominent stocks face their biggest test of 2013.
What should you look out for?
The Dow’s week of earnings starts off with Tuesday’s slate, as Intel , Coke, and J&J report on their most recent quarters. Intel’s had a tough time recently with the PC market‘s decline, and analyst expectations for both the company’s revenue and earnings are down from a year ago. The company’s done its best to diversify, reaching out to the fast-growing mobile market while advancing into new fields such as Internet TV, but don’t expect to see the fruits of Intel’s diversification efforts show up this early. For now, this is still a company stuck with its ties to the falling PC industry.
Analysts expect better EPS results from J&J and Coke, however: Projections for the two companies’ earnings average year-over-year growth of 2.2% and 2.3%, respectively. Coca-Cola’s steadily advanced overseas despite fighting against regulatory hurdles and legislation at home, promoting its iconic brand around the globe in an effort that should help this stalwart company’s future. Although analysts project slightly lower revenue from the company, Coca-Cola looks to be on good footing for the long term.
Financials take center stage on Wednesday, as both Bank of America and American Express report earnings. Analysts expect earnings per share from these companies of $0.22 and $1.22, respectively; B of A’s projected earnings represent significant year-over-year growth over last year’s $0.03 mark. Financial firms have done well recently — B of A has been one of the Dow’s top risers over the past year — but consumer spending has been shaken by the payroll-tax holiday expiration earlier this year, along with sequestration. On Wednesday, we’ll be able to see just how much these events have affected consumer-oriented companies such as American Express. While the company’s earnings are expected to grow around 5% over last year, tightening consumer wallets could put a dent in AmEx’s results.
Thursday brings three more companies up to bat, with UnitedHealth Group , IBM, and Verizon to the forefront. UnitedHealth provides a particularly interesting report to watch as the company shifts toward the full arrival of Obamacare next year. Analysts expect a drop in the company’s earnings to $1.14 per share this quarter, down from $1.31 a year ago. Still, UnitedHealth has done a good job growing its subscription base and advancing internationally, two trends that should bolster its numbers. IBM and Verizon, on the other hand, are both expected to post year-over-year EPS gains for
From: http://www.dailyfinance.com/2013/04/14/what-to-watch-for-from-the-dows-earnings-this-week/
By Nicole Seghetti, The Motley Fool
Filed under: Investing
The world’s oldest annual marathon gets under way this weekend. It’s a big event for the runners, but it’s also a huge one for the city of Boston and numerous companies. How much does the marathon really cost and, more important, how can investors get a piece of the action?
Physically (and fiscally) fit
A half-million spectators will witness more than 20,000 Boston Marathon runners strut their stuff on the famed course through Beantown on Monday.
Source: Wikimedia Commons.
Most Boston Marathoners gain eligibility to run the race by having completed a qualifying marathon in a certain amount of time. For example, a female runner between the ages of 45 and 49 would need a sub-four-hour qualifying time to run at Boston. But runners who don’t qualify under the time limit can still participate through a charity, by raising about $3,000 for their cause. That just gets your tired feet in the door.
In addition to the $150 entry fee for U.S. residents ($200 for international residents), runners must spend money on travel, lodging, and dining. Of course, runners can’t forget to pack essential running shoes and apparel. In all, a U.S.-based marathoner can anticipate spending $1,000 to nearly $3,000 to participate in the Boston Marathon. An internationally based runner will spend more. Assuming a $2,500 average tab per runner means $50 million will change hands as a result of this year’s race!
Even though we mere mortals will instead fill this weekend with activities of the couch-potato persuasion, we can still profit by investing in products used in the marathon.
On your mark
For starters, even the best runners often need medical attention during the race. The shoes that Flash swore he broke in weeks ago may rub him the wrong way at mile 13. And as runners gloriously cross the finish line, despite the endorphin rush, they’ll still feel pain.
Patching up runners’ annoying blisters, sore joints, and aching muscles will probably come from Johnson & Johnson and Pfizer products. For more than 125 years, J&J has brought relief to millions of consumers with its Band-Aids, Tylenol, and Bengay. Pfizer’s Advil is the No. 1-selling branded over-the-counter pain reliever, and its ThermaCare Heatwraps make heat therapy portable and long-lasting. And these two Dow Jones Industrial Average bellwether stocks both pay greater than a 3% dividend yield.
Running-apparel and shoe makers Nike and Under Armour are also likely beneficiaries of the race. Nike not only holds an enviable spot as the global market leader, but it also boasts the right strategy and investments to sustain its top position. Meanwhile, newer kid on the block Under Armour has evolved into a major player in the global athletic footwear and apparel market.
Not to be outdone, lululemon athletica , originally known for its pricey yoga pants, now flaunts lines of running gear targeted toward both sexes. Enjoying $1,900 in sales per square foot, its stores make Lululemon one of the United
From: http://www.dailyfinance.com/2013/04/13/the-big-business-of-the-boston-marathon-2/
By Brian Stoffel, The Motley Fool
Filed under: Investing
A full 23 months ago, I started identifying 10 companies that I would be putting $40,000 of my own retirement money behind. Since then, that sum of money has grown to $51,880 — a 29.7% increase and $1,560 better than if I had just invested the money in the S&P 500.
The portfolio has benefited from one company already reporting positive results, and I’ll be looking for four more to report next week.
PriceSmart
A huge part of the reason that the portfolio has done well this week is because of the continued excellent execution at Latin American wholesaler PriceSmart. The company, which was spun off its American counterpart — Costco — continues to follow in its parent-company’s footsteps of providing value for customers and shareholders alike.
For the last quarter, PriceSmart increased revenue by 10.8% while earnings were up an even more impressive 22.3%. Probably most important, however, was the fact that sales at comparable stores were up 10.1%. That, combined with the company’s slow and steady growth plans, gives investors lots of reasons to cheer.
Four more set to report
After next week ends, half of the company’s in this retirement portfolio will have reported earnings. Here’s what the week has in store.
|
Company |
Earnings Date |
Expected Revenue |
Expected EPS |
|---|---|---|---|
|
Coca-Cola |
April 16 |
$11.0 billion |
$0.45 |
|
Johnson & Johnson |
April 16 |
$17.5 billion |
$1.40 |
|
|
April 18 |
$14.2 billion |
$10.69 |
|
Intuitive Surgical |
April 18 |
$583 million |
$3.99 |
Source: E*Trade.
Coca-Cola and Johnson & Johnson are both in the portfolio to act primarily as anchors, offering stability in a portfolio that otherwise has stocks that can be quite volatile.
I’ll be looking to see how two different aspects of these reports play out. Recent evidence has pointed to the popularity of energy drinks over soda lately, and I’m curious to see if analysts have any questions for the company on expanding its line of energy drinks or even acquiring others — like Monster Beverage. And though Johnson & Johnson has had a tough time in the consumer health products division, its pharmaceutical business has been carrying more than its fair share of the revenue load.
When it comes to Intuitive Surgical, I think I’ll actually be just as interested in the conference call as the numbers released. The last couple of weeks have seen several sources call into question the necessity of the daVinci Surgical system in helping perform hysterectomies.
Though any effect from these announcements probably won’t show up in results for the quarter, I’m very interested to see what management has to say about these developments.
Finally, with Google, I’m simply expecting more of the same. Earnings might miss, as I don’t think CEO Larry Page is done spending money to invest in the future, but I think revenues should continue to increase likely. And while many analysts will be
From: http://www.dailyfinance.com/2013/04/12/5-big-reports-for-the-worlds-greatest-retirement-p/
By Max Macaluso, Ph.D. and Sharon Yep, The Motley Fool
Filed under: Investing
The biotech industry on the whole was on a massive winning streak in 2012, and it has started 2013 in a similar fashion. In fact, the iShares Nasdaq Biotechnology index is already up 13% since the start of this year, and there have been a few biotech stocks, such as Keryx Biopharmaceuticals, that have more than doubled.
However, for every biotech success there are a plethora of failures. Poor clinical trial data or drug recalls are some of the things that can cause stocks to plunge virtually overnight. For investors thinking about retirement, it’s best to stay away from the smaller players in this speculative and complex industry. Instead, more diversified dividend stocks like Johnson & Johnson are typically much safer investments. Health care analyst Max Macaluso sheds light on this topic in the following video.
The best investing approach is to choose great companies and stick with them for the long term. The Motley Fool’s free report “3 Stocks That Will Help You Retire Rich” names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.
The article Want to Retire Soon? Don’t Invest in This Industry! originally appeared on Fool.com.
Max Macaluso, Ph.D. and Sharon Yep have no position in any stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
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From: http://www.dailyfinance.com/2013/04/11/want-to-retire-soon-dont-invest-in-this-industry/
By Dan Caplinger, The Motley Fool
Filed under: Investing
Earnings season has begun, and next Tuesday Johnson & Johnson will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed, knee-jerk decision.
Johnson & Johnson is a behemoth in the health care space, with a business that includes not only its well-known consumer health and personal-care products, but also a thriving pharmaceutical business and an extensive line of medical devices. The breadth of its offerings has given it a place among the Dow Jones Industrials . However, with so much going on at J&J, can the company hold itself together and take advantage of new growth opportunities? Let’s take an early look at what’s been happening with Johnson & Johnson over the past quarter and what we’re likely to see in its quarterly report.
Stats on Johnson & Johnson
|
Analyst EPS Estimate |
$1.40 |
|
Change From Year-Ago EPS |
2.2% |
|
Revenue Estimate |
$17.46 billion |
|
Change From Year-Ago Revenue |
8.2% |
|
Earnings Beats in Past 4 Quarters |
4 |
Source: Yahoo! Finance.
Will Johnson & Johnson make investors feel healthy this quarter?
In recent months, analysts have had mixed views on Johnson & Johnson’s earnings prospects. They’ve raised their consensus on the just-finished quarter by a penny per share, but they’ve pulled back on their full-year 2013 EPS outlook by $0.08 and cut 2014 estimates even more sharply. Yet the stock continues to perform well, rising more than 15% since early January.
Lately, Johnson & Johnson has presented two different faces to investors. On one hand, the company has faced the challenge of dealing with a weak consumer-products business, as multiple recalls and close regulatory oversight of its production facilities have exacerbated J&J’s problems. With its more focused consumer-goods business, Colgate-Palmolive has worked harder at taking advantage of international growth opportunities than many of its rivals, and Colgate’s strong overseas sales, in comparison to J&J’s international weakness, show the effectiveness of that strategy. In particular, Asia has been a focus point for Colgate, with revenue from the region having risen 9% year over year compared with less than 3% growth overall. Moreover, Latin America represents Colgate’s biggest region for sales, with more than half again the revenue its U.S. segment produces.
Yet in the pharmaceutical space, J&J has had great success. The approval of its Invokana treatment for type 2 diabetes bodes well for the company, as Invokana’s approach to treating the disease is completely different from that of competing products. In particular, Merck‘s Januvia appears to have some substantial disadvantages compared to the drug, and with Januvia’s patent set to expire in a few years, Invokana could have an even clearer path to success in the future. J&J
From: http://www.dailyfinance.com/2013/04/11/johnson-johnson-earnings-could-send-the-dow-higher/
By Business Wirevia The Motley Fool
Filed under: Investing
Model N Announces Date of Second Quarter Fiscal 2013 Financial Results
REDWOOD CITY, Calif.–(BUSINESS WIRE)– Model N, Inc. (NYS: MODN) , a provider of revenue management solutions for the life science and technology industries, plans to announce financial results for the second quarter fiscal 2013 after market close on Tuesday, May 7, 2013. The company also will host a conference call that day at 2:00 p.m. PT / 5:00 p.m. ET to review its financial results and business outlook.
The conference call can be accessed by dialing (888) 503-8169 from the United States or (719) 325-2454 internationally with conference ID 4807849, and a live webcast of the conference call can be accessed from the investor relations page of Model N’s website at investor.modeln.com. Following the completion of the call through 11:59 p.m. ET on May 14, 2013, a recorded replay will be available on the company’s website, and a telephone replay will be available by dialing (877) 870-5176 from the United States or (858) 384-5517 internationally with recording access code 4807849.
About Model N
Model N, the leader in Revenue Management solutions, drives improved pricing, margin, and revenue performance through a powerful combination of best practices, highly configurable software applications, comprehensive services, and actionable analytics across the complete functional spectrum of pricing, contracting, rebating, sales, and marketing. Model N leverages its deep industry expertise to support the unique business needs of Life Sciences and Technology manufacturers in more than 50 countries. Global Customers include: Allergan, Amgen, Atmel, Boston Scientific, Bristol-Myers Squibb, Dell, Johnson & Johnson, Linear Technology, Merck, Marvell, Maxim, Micron, Nokia, Novartis, Novo Nordisk, ON Semiconductor, STMicroelectronics, and Watson Pharmaceuticals. Learn more at: http://www.modeln.com.
Investor Relations Contact:
ICR for Model N
Greg Kleiner, 650-610-4998
investorrelations@modeln.com
or
Media Contact:
Model N
Kristin Lee, 650-610-4717
Marketing
klee@modeln.com
KEYWORDS: United States North America California
INDUSTRY KEYWORDS:
The article Model N Announces Date of Second Quarter Fiscal 2013 Financial Results originally appeared on Fool.com.
Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 – 2013 The Motley Fool,
From: http://www.dailyfinance.com/2013/04/11/model-n-announces-date-of-second-quarter-fiscal-20/
By Keith Speights, The Motley Fool
Filed under: Investing
If you’re looking for a textbook example of a steady rise in shares, it doesn’t get much better than the current Johnson & Johnson stock run-up. Shares in the blue-chip company are up 15% year-to-date with a nice upward trend.
The chart definitely shows a good run for J&J. But could there be a roadblock ahead that will put a damper on these steady gains?
What won’t get in the way
There are several factors that could hurt other stocks that shouldn’t be an issue for Johnson & Johnson. For example. AbbVie is highly dependent on the success of one drug — Humira. Although sales for the blockbuster drug continue to experience solid growth, any blip would send AbbVie’s shares headed downward.
J&J’s diversification prevents that type of problem from raising its ugly head. The company’s revenue is spread across three large operating segments. Its consumer segment brought in $14.4 billion in sales last year. J&J’s pharmaceuticals segment made $25.3 billion, with the biggest-selling drug, Remicade, accounting for only $6.1 billion of that total. The largest business segment, medical devices and diagnostics, generated $27.4 billion in 2012 revenue.
Product recalls usually hurt companies. Covidien‘s shares were temporarily affected by the company’s recall of surgical tools last year. Johnson & Johnson stock took a hit in 2010 and early 2011 partially due to recalls of several products.
However, the company’s latest recall doesn’t seem to have fazed the stock. In late March, J&J announced that it was pulling nearly 2 million glucose meters from the market after a patient in Europe died following a faulty blood sugar reading. Shares continued their upward path even after this recall announcement.
The most likely roadblock
So what is the most likely impediment to Johnson & Johnson stock success? The answer: Its continued stock success.
After a great start to 2013 and a gain of 27% over the last 12 months, some investors could be ready to take some profits. That’s more likely as we approach summer. Many still subscribe to the old “sell in May and go away” school of thought. Concerns about the employment outlook and global political uncertainties could also contribute to increased selling.
There’s also the dividend factor. Thanks to its stock appreciation, J&J’s dividend yield currently stands at its lowest point since 2010. Dividend-oriented investors might not be as attracted to the stock as they used to be.
The same goes for value investors. Johnson & Johnson’s stock now sports a trailing price-to-earnings multiple of 21. It hasn’t been this richly valued since 2006.
By comparison, Pfizer , which has a similar-sized market cap, pays a dividend yield higher than Johnson & Johnson. Pfizer shares also trade at a P/E of 15, well below J&J.
Running the distance
I wouldn’t be surprised to see the Johnson & Johnson stock run halted in the near future. However, I think if it happens, it will be due more to profit-taking and macro events
From: http://www.dailyfinance.com/2013/04/11/1-potential-roadblock-for-johnson-johnson-stock-ru/
By Dan Caplinger, The Motley Fool
Filed under: Investing
The Dow Jones Industrial Average isn’t just for industrial stocks anymore. You can find all sorts of companies in the venerable average, with the Dow representing a nearly all-inclusive cross-section of the entire U.S. economy.
Pharma stocks aren’t a huge part of the Dow, with just two of its constituents focused solely on the space and a third reaping a substantial portion of its revenue from pharmaceuticals. Yet pharma stocks have made a big impression on investors because of their lucrative dividend yields. Let’s take a look at how these companies have fared so far in 2013 and what their prospects are for the rest of the year and beyond.
JNJ Total Return Price data by YCharts.
You may not think of Johnson & Johnson as a pharmaceutical company, as it’s far better-known for its consumer products. But the health care conglomerate also produces proprietary drugs and medical devices, giving it a broad reach over the entire health care industry. Lately, even as the company has faced liability from recalls of its artificial hip replacements, Johnson & Johnson has gotten help from its pharma division, as the approval of its type 2 diabetes drug Invokana represents a big step forward in diabetes treatment that could produce the company’s next blockbuster.
Meanwhile, pure pharma stocks Pfizer and Merck have both dealt with patent expirations of high-profile drugs over the past couple of years, including Merck’s Singulair and Pfizer’s Lipitor. Yet while revenue has predictably fallen since generic competition hit the market, both companies have held up better than pessimists had expected.
For Pfizer, anticlotting drug Eliquis, which it co-developed with Bristol-Myers Squibb, has the potential to generate billions in sales over the next decade, having several advantages over rival drugs designed to replace the existing warfarin treatment for atrial fibrillation. Merck still faces some patent-cliff problems, with Vytorin, Nasonex, and Zetia coming off patent over the next four years. But with the combination of existing diabetes drugs Januvia and Janumet and up-and-coming development-stage drugs like insomnia treatment suvorexant and osteoporosis drug odanacatib, Merck has good prospects looking forward.
Keep looking for healthy results
With the pharma industry having turned the patent-cliff corner, pharma stocks should continue contributing to the Dow’s overall success. Given the emphasis on dividend income, the big yields that Pfizer and Merck pay will likely remain big drawing points for years to come.
As big as Johnson & Johnson is in health care, some critics are convinced that the company is spread too thin. Is Johnson & Johnson overextended, or is it a well-diversified health-care giant that deserves a place in your portfolio? Find out our view by checking out the Fool’s new premium report. Inside, our analyst outlines the Johnson & Johnson story in terms that any investor can understand. Claim your copy by clicking here now.
Source: FULL ARTICLE at DailyFinance
By Brian Orelli, The Motley Fool
Filed under: Investing
If one “Breakthrough Therapy Designation” is good, three must be great.
That is, if we knew what the designation was really worth.
Johnson & Johnson announced on Monday that it had received a third Breakthrough Therapy Designation for the blood cancer drug ibrutinib that it’s developing with Pharmacyclics . The designation covers patients with chronic lymphocytic leukemia or small lymphocytic lymphoma who have a deletion of the short arm of chromosome 17.
In February, the Food and Drug Administration gave the drug the designation for patients with relapsed or refractory mantle cell lymphoma that failed prior therapy and for patients with Waldenstrom’s macroglobulinemia, a type of cancer affecting B cells.
The Breakthrough Therapy Designation was part of the last year’s FDA Safety and Innovation Act, which is supposed to speed up development review time — potentially requiring less data for approval — for drugs that treat serious diseases where there isn’t a treatment or where the product in development is a vast improvement over current options.
But Congress, in its infinite wisdom, left exactly how to implement the benefits up to the FDA. That was probably a good idea in the long run since the FDA knows what drugmakers need, but the agency isn’t particularly quick in establishing rules.
Companies are left making announcements about a designation that they don’t know exactly how they’ll benefit from. “The implications of Breakthrough Therapy Designation cannot be determined at this time,” read the press release by Johnson & Johnson’s subsidiary Janssen Research & Development.
Vertex Pharmaceuticals had the exact same wording — maybe their flack went to the same law school — in the announcement that the FDA had given Breakthrough Therapy Designation to its cystic fibrosis drug Kalydeco as both a monotherapy and in combination with VX-809.
The biotech added that it’s working with the FDA and other regulatory authorities to figure out exactly how it’ll affect the development. It sure doesn’t look like the designation will help reduce the size of the clinical trials required for approval. Vertex subsequently announced that it’s started two 500-patient phase 3 trials testing VX-809 with Kalydeco in cystic fibrosis patients with two copies of the F508del mutation in the cystic fibrosis transmembrane conductance regulator gene.
The designation might not have much benefit, but don’t ignore the drugs involved; both Vertex’s combination treatment and ibrutinib have a lot of promise. Just this week, promising data from a clinical trial testing ibrutinib in hart-to-treat chronic lymphocytic leukemia patients was presented at the American Association for Cancer Research annual meeting.
At this point, the Breakthrough Therapy Designation is like wearing a broken luxury watch; it’s a nice status symbol, but it isn’t particularly useful. Some will argue that it says that the FDA thinks the drug has promise, but that should be obvious to most investors anyway. The drugs still have to prove their worth in clinical trials to get approved.
Is bigger really better?
Involved in everything from baby powder to biotech, Johnson & …read more
Source: FULL ARTICLE at DailyFinance
By Max Macaluso, Ph.D., The Motley Fool
Filed under: Investing
The Food and Drug Administration ensures that the benefits of newly approved drugs outweigh their potential side-effects. However, it’s not always easy to predict which way the FDA will decide, and sometimes its decisions are very hard to interpret.
In the following video, health care analyst Max Macaluso discusses why two recent FDA decisions regarding diabetes medications developed by Novo Nordisk and Johnson & Johnson surprised him this year, and how these decisions can impact investors.
Is bigger really better?
Involved in everything from baby powder to biotech, Johnson & Johnson’s critics are convinced that the company is spread way too thin. If you want to know if J&J is nothing but a bloated corporate whale — or a well-diversified giant that’s perfect for your portfolio — check out The Fool’s new premium report outlining the Johnson & Johnson story in terms that any investor can understand. Claim your copy by clicking here now.
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Source: FULL ARTICLE at DailyFinance
By Jeremy Bowman, The Motley Fool
Filed under: Investing
After spending most of the day in negative territory, the Dow Jones Industrial Average made a late run to finish up 48 points or 0.3% as optimism about the beginning of earnings season seemed to take over late in the day. Following multiple reports last week about a slowing job market, Wall Street seemed happy to shift its focus elsewhere as earnings reports begin to roll in.
Alcoa kicked off the quarterly reports in style, gaining 1.8% during the trading session, and reporting overall profit growth of 59% to $149 million or $0.13 a share, even as revenue continued to slide, falling 3%, on weak aluminum demand. Still, the manufacturer managed to lift earnings per share with growth in its downstream segment, which sells products such as aluminum wheels and aircraft parts. EPS topped expectations of $0.13 a share, but sales came in a bit short. Shares were down 1.3% in after-hours trading.
Elsewhere on the Dow, Coca-Cola jumped 2% as separate reports reaffirmed the growth potential in the energy-drink industry. Wells Fargo said that energy drinks should push overall growth in the beverage industry while UBS put in its own vote of confidence in the industry, saying that Monster Beverage had strong upside potential in international sales. After hours, Monster, once thought of as a buyout target for Coca-Cola, also announced a $200 million share-buyback program. Shares of the energy-drink maker were up 4.7% today.
Johnson & Johnson led the Dow laggards today, finishing down 1.1% after getting downgraded by JPMorgan Chase. Michael Weinstein dropped his rating from “overweight” to “hold,” saying that the health-care giant’s stock trades at an 8% premium to its intrinsic value and that he expects the company lower its guidance soon.
Shares of General Electric finished up 0.8%, but it sent Lufkin Industries, a maker of oil pumps and similar transmission products, up 37.6%, after agreeing to acquire it. GE will pay about $3 billion for Lufkin, a move that gives the conglomerate increased exposure to the fast-growing shale oil-and-gas industry, and will make GE Oil & Gas the company’s third largest unit. The deal is expected to close in June.
Finally, outside the Dow, CEO Ron Johnson was finally ousted from J.C. Penney following one of the more tumultuous years in retail history. Johnson’s brand revamp never took and cost more the company more than a quarter of its sales, and the retailer has already taken several steps to undo his decisions, such as bringing back markdowns. Former CEO Mike Ullman, who led the company for nearly seven years before being replaced by Johnson, will be back at the helm. Investors seemed uninspired by the decision, as shares were off 9.9% after hours.
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in …read more
Source: FULL ARTICLE at DailyFinance
By John Divine, The Motley Fool
Filed under: Investing
Go ahead and take a breath. A deep breath — using your nose, not your mouth. Do you smell that? No, it’s not flowers blooming or the livelihood of spring. It’s earnings season, and it kicked off this afternoon. Wall Street seemed to like the aroma Monday, as the Dow Jones Industrial Average added 48 points, or 0.3%, to close at 14,613.
Alcoa was the particular focus of the day, and the stock added 1.8% in anticipation of its after-hours report. When the numbers finally came, however, results were mixed. The aluminum producer beat profit expectations, but sales disappointed, falling from $6.01 billion in the year-ago quarter to $5.83 billion in the recent period. Alcoa’s CEO projects a better year ahead in 2013, but shares traded marginally lower following the announcement.
The next blue chip to announce earnings will be JPMorgan Chase on Thursday. Its stock, too, ended toward the top of the Dow, adding 1.4% after the bank redeemed almost $5 billion in high-yielding preferred shares. Perhaps more influential, though, is talk that CEO and Chairman Jamie Dimon could be ousted from his position at the head of the board; last year’s $6 billion losses from a single trader dubbed the “London Whale” have raised the eyebrows of both investors and regulators. Dimon’s in the hot seat.
Even while dealing with internal problems, JPMorgan downgraded Johnson & Johnson shares, sending stock in the health-care company 1.1% lower. Predicting lower guidance from the business at its earnings call next Tuesday, the analyst — as analysts are prone to do — got oddly precise with the numbers, claiming the company’s stock is overvalued by 8%.
Still, the biggest mover in the index today was Bank of America , which added 2% to start the week. B of A doesn’t report until next Wednesday, but financials as a whole outperformed today. Although there wasn’t major news from the Charlotte-based bank, shares are nearly 80% more volatile than the broader market, making 2% swings like today’s more common than most other stocks.
That volatility is part of what allowed Bank of America’s stock to double in 2012. Is there more yet to come? With significant challenges still ahead, it’s critical to have a solid understanding of this megabank before adding it to your portfolio. In The Motley Fool’s premium research report on B of A, analysts Anand Chokkavelu, CFA, and Matt Koppenheffer, financials bureau chief, lift the veil on the bank’s operations, including detailing three reasons to buy and three reasons to sell. Click here now to claim your copy.
var FoolAnalyticsData = FoolAnalyticsData || []; …read more
Source: FULL ARTICLE at DailyFinance
By Travis Hoium, The Motley Fool
Filed under: Investing
For investors, the seasons aren’t marked by the changing leaves or first snowfall; earnings season is kicked off every three months by aluminum maker Alcoa . Today, after the closing bell, Alcoa opens first-quarter earnings season, and investors are approaching it with skepticism today. Stocks dropped in early trading, but as of 3:15 p.m. EDT the Dow Jones Industrial Average is up a meager six points, while the S&P 500 has gained 0.29%.
Alcoa is always the first major company to report quarterly earnings, and it’s viewed as a bellwether for the rest of the season. Analysts are expecting Alcoa to report $5.89 billion in revenue and an $0.08 per-share profit. An earnings beat would have investors in a good mood tomorrow, and a miss would have them singing the blues. Beyond the numbers, be on the lookout for management’s comments about future demand, because investors are always looking for clues about what the next earnings season will look like.
Johnson & Johnson dropped 1.5% to lead the decliners today. The stock was downgraded by analysts at JPMorgan Chase — though, ironically, they also increased their price target from $77 to $83. Analysts can have a short-term impact on stocks, but the market won’t care about this rating for long, and I would pay more attention to Johnson & Johnson’s earnings release next week than I would to this rating.
Coca-Cola jumped 1.7% today after Wells Fargo said energy drinks would help grow the beverage industry overall. Growth of the beverage industry is great, but Coca-Cola has had a hard time gaining significant market share, so it may miss out on some of that upside. Next week, Coke will release first-quarter earnings, so we’ll learn more about beverage growth and what Coke is going to do about the energy craze.
Coca-Cola’s wide moat has helped provide its shareholders with superior gains in the past, but the company faces some new threats to its continued market dominance. The Motley Fool recently compiled a premium research report containing everything you need to know about Coca-Cola. If you own or are considering buying shares in the company, you’ll want to click here now and get started!
var FoolAnalyticsData = FoolAnalyticsData || []; FoolAnalyticsData.push({ eventType: “TickerReportPitch”, …read more
Source: FULL ARTICLE at DailyFinance
By Dan Carroll, The Motley Fool
Filed under: Investing
Earnings season is back, with weeks of quarterly reports on tap for Wall Street to pick apart and analyze. So far, however, the Dow Jones Industrial Average is taking a cautious approach to the start of the season: As of 2:20 p.m. EDT, the blue-chip index sits a hair below breakeven. Few Dow members are moving far today, and the first company on the index to report — aluminum producer Alcoa , which releases earnings after the closing bell today — has barely budged. Let’s get caught up on which way the Dow’s Monday is headed.
Eyes turn to earnings
Alcoa’s on tap for its earnings call this afternoon, but many analysts aren’t expecting much from a company that’s been hit hard by sluggish economic growth around the world. The stock has slumped considerably in 2013, ranking among the worst Dow members in year-to-date performance as aluminum prices remain under pressure and China‘s slowdown hurts the company’s growth prospects. Alcoa’s gains of 0.9% today won’t impress anyone, and all eyes are set on the coming earnings report. Analysts expect falling revenue and uninspiring EPS figures.
Other stocks around the Dow are having better days, although no member of the index has lit up investors’ portfolios so far. Two big retail names are headed higher: Home Depot and Wal-Mart rank near the top of the Dow with respective gains of 1% and 1.3%. Neither company reports earnings this week, but these firms comprise a tale of two economies. Wal-Mart’s been hampered by tightening consumer spending and the expansion of the payroll tax; the company’s guidance for this quarter didn’t strike a chord with many industry observers when announced back in February.
Home Depot, meanwhile, is looking to capitalize on a housing market that’s primed to explode as the U.S. population keeps increasing. The stock has jumped more than 10% since the start of 2013, and if home sales pick up the pace, Home Depot will be in the driver’s seat of the Dow.
Elsewhere, Disney‘s another leader of the Dow today, up 1.2%. The stock has hit a new all-time high today, even as reports circulate that the company’s planning a round of layoffs in its studio and consumer products divisions. Disney announced last week that game developer LucasArts, which Disney acquired when it bought LucasFilm, will be shut down. Layoffs elsewhere in the company wouldn’t be a stretch if Disney is looking to slash costs and consolidate — a smart move, considering the giant acquisitions of Marvel and LucasFilm in the recent past.
On the other side of the Dow today, Johnson & Johnson is leading the index lower, down 1.3%. JPMorgan downgraded the stock to “neutral” from “overweight” today, sparking the sell-off. Despite that move, however, J&J remains one of the broadest and most diverse companies in the health care sector. Its 15.8% run-up since the start of 2013 gives room for pause, but in …read more
Source: FULL ARTICLE at DailyFinance
By Jessica Alling, The Motley Fool
Filed under: Investing
Despite making some progress to recoup losses on Friday, the Dow Jones Industrial Average is back in a downward dip this morning. Though it is recovering from its initial fall, the index remains at a 47-point loss at 11:15 a.m. EDT. Without much economic news to help it inspire investors, the Dow must rely on its component stocks to do the hard lifting.
They have some help though, coming from Asia, as the new Japanese stimulus plan took effect today. The Bank of Japan purchased 1.2 trillion yen in bonds from municipalities with maturities dating five years out. The country announced recently that it would be doubling its balance sheet through new bond purchases.
Dow’s strongest players today
Disney is by far the strongest component this morning, up 0.83%. It was reported last week that the media and entertainment giant will begin layoffs in its studio and consumer products divisions over the next few weeks as a result of an internal company review. Though it is unclear how many layoffs will be completed, it shows that the company is consistently looking for ways to make itself leaner. Last week Disney announced that the video game division of its recently acquired LucasFilm, LucasArts, would no longer be producing games.
Coca-Cola is also up this morning, with a 0.81% gain. No big news for the beverage company so far this morning, but with its continued push to expand internationally, investors are happy to jump on board the dividend aristocrat. Coca-Cola has plans to spend $700 million in Indonesia over the next three years — marking the Asian country as the next big emerging market. With a rising middle class, the company is hinging its success on more available disposable income in the country. The beverage behemoth still remains the Dow’s least-shorted stock.
Ahead of its earnings announcement that will kick off the new earnings season tonight, Alcoa is on the rise. Up 0.49% this morning, the company’s earnings may set the tone for the broader materials market, and even the Dow itself. With a lot resting on its Chinese sector, investors will want to pay attention to how the company reports its results from the Asian country. Overall, Alcoa was forecasting earnings growth of 9% to 10% for the year. Weakened aluminum prices have created mixed opinion on whether that range is realistic.
Not helping
The biggest loser this morning is Johnson & Johnson , with a drop of 1.5%. Just a few days after a huge courtroom win, the Band-Aid giant was downgraded by JPMorgan to neutral. Though the analyst downgraded the company, JPM‘s price target for J&J was raised to $83 from $77, which makes perfect sense given that the stock currently trades around $80.
Is bigger really better?
Involved in everything from baby powder to biotech, Johnson & Johnson’s critics are convinced that the company is spread way …read more
Source: FULL ARTICLE at DailyFinance
