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12-14-2018, 02:53 PM
(This post was last modified: 12-14-2018, 03:05 PM by fenders53.)
I suspect many of you hold positions in JNJ and thought this a worthwhile forum discussiion. I'm sure most of you have seen the JNJ news today so I won't repost it here. I VERY often jump on over-reactions in short-term share prices due to temporary bad news. While I have every confidence JNJ is very good long-term, I'm thinking this is bombshell news if the allegations can be proven. If not it is just noise in the end. There is already a $4.9B judgement against them on this very issue. $5B charges like this effect earnings, even for a powerhouse like JNJ with deep pockets. Their legal staff was already too busy as they are a frequent target of litigation.
On a personal note I've held JNJ for decades. It was always a core position. Through blind luck I am out now as I liquidated recently at $138.50 during a brokerage account switch. I thought JNJ overpriced some so sold puts for months trying to get back in at $135 or less. JNJ just kept running and puts always expired worthless. It's hard to be objective here as I love the company. I'd like to think it blows over quickly but I'm not so sure it does if attorneys pile on. If it can be proven they had knowledge of real risk it will be messy for some time.
So what is JNJ worth now in your opinion? Be objective but not fearful because that's what successful investors do. I think it is rational to believe they need earnings growth to support the current PE, even after today's big drop. This may or may not be a significant threat for some time to come.
Historically JNJ has a good antry around 3% yield. This is not there yet.
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JNJ is already a huge core position for me, so of course I'm sad to see this news. (And for more reasons than just the share price. I'd be especially bummed if they hadn't taken the Tylenol-tampering experience to heart when it comes to full and quick disclosure of problems.)
But I accumulated my shares years ago back when it was in the $60s, and hadn't been planning on buying more any time soon. My plan will be to just sit tight; confident that it will be just fine in the long term. For all of these reasons, I haven't been too focused on its valuation lately. Given that I already own a lot and that I see other more compelling opportunities right now, I'd need to see it come down a lot further before I considered nibbling. Especially since in the near term, if the accusations are accurate, there may be better entry points in the coming months / years.
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First this is a way over reaction. This is old news!! JNJ said in a press release and said the Reuter’s news was BS.
Why such a dramatic reaction to Old News ?
1971-2000 ish The fact is there was found to be asbestos in baby powder (in the aforementioned years). This (recent) accusation thus question is; did J&J know, and not admit to knowing? Again from 1971-2000. That question will take years to work thru the courts, as have the other (yes past tense and multiple) cases already involving asbestos in J&J baby powder. Sensational news story, old news.
Ponder this for a second....
Low levels of asbestos can be detected in almost any air sample. It's a fact. Who do you sue? Shall we sue everyone?
Apple seeds (and the seeds of related plants, such as pears and cherries) contain amygdalin, a cyanogenic glycoside composed of cyanide and sugar. Shall we sue the growers and the markets for selling these fruits? My point is . You can find anything in anything in infinitesimally small levels. Means nothing. Absolutely nothing.
I added twice to JNJ today. This will all work out in the end. Don't throw the baby powder out with the bath water!
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Kerim, it's all going to come down to "if the accusations are accurate". For generations we've used JNJ baby powder, a low margin product. In the context of high dollar/high margin drugs, it's hard to imagine this could take them down for more than a little while. I'll be following like everyone else. I want to be positive but attorneys are salivating now. I think it will be ugly for awhile.
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Johnson & Johnson Talcum Powder Lawsuits
Over $5 billion has been awarded to ovarian cancer lawsuit plaintiffs but more than 9,000 cases have yet to be settled including:
6,900 federal lawsuits in U.S. District Court in New Jersey
500 state lawsuits in New Jersey State Court in Atlantic County
800 state lawsuits in Los Angeles Superior Court in California
1,700 state lawsuits in St. Louis Circuit Court in Missouri
In past medical injury lawsuits, plaintiffs have received compensation for medical costs, lost wages, pain and suffering and in some cases, punitive damages. Family members may be eligible for wrongful death compensation if the victim has died.
Each case is unique and must be evaluated individually but women or family members of those who were diagnosed with ovarian cancer after using talcum powder may be eligible for compensation. Seek advice from a legal expert.
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A South Carolina jury failed to reach a verdict in the second trial of a lawsuit claiming Johnson & Johnson’s baby powder caused a rare cancer linked to asbestos exposure.
Judge Jean Toal ordered a mistrial Thursday evening after jurors said they were hopelessly deadlocked 11-1 in the lawsuit brought by the husband of lawyer Bertile Boyd-Bostic, who died at age 30 of mesothelioma. The first trial on the claim in May also ended with a hung jury.
Boyd-Bostic’s husband argued J&J knew in the 1970s its talc products contained the carcinogen and failed to warn the public to protect its iconic brand. He sought more than $62 million in damages over his wife’s death. J&J denies its baby powder has ever been tainted with asbestos.
“We look forward to a new trial to present our defense, which rests on decades of independent, non-litigation driven scientific evaluations, none of which have found that Johnson’s Baby Powder contains asbestos,” Kim Montagnino, a J&J spokeswoman, said in an emailed statement.
The mistrial comes on the heels of a California jury’s decision Wednesday to reject a woman’s claims that asbestos-laced baby powder caused her mesothelioma. The panel found
plaintiff Carla Allen was exposed to baby powder fouled by asbestos, but that wasn’t a “substantial factor” in causing her cancer.
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One of the JNJ employees said it best. "For the record I worked in the JNJ plant for 33 where Baby Powder is (still) packed. If anyone would get asbestos related disease the line operators would. No such thing...
And true fact..... This is not new "news" Bloomberg reported this back in 2017. Do your due diligence and don't panic at a headline.
So my guess is Someone shorted the stock and then re-released this news from 2017. Criminal if you ask me. Google it, its all over the JNJ boards.
Meanwhile tobacco kills millions and gives cancer too. As does many foods you eat . Like canned goods, microwave pop corn, Red Meat, Refined sugar, soda, white flour ect. Are we going to test every product out there when someone dies of a deadly disease??
crimsonghost747
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I absolutely agree with Kerim.
Even after this massive drop the stock still feels quite expensive. While I have no immediate plans to buy more but I'll definitely keep my eye on this. I already own quite a bit and I'm happy to just sit here and collect the dividends as I feel the company will be absolutely fine long-term. But I think I need the price to come down a little further before I hit the buy button again.
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12-14-2018, 10:05 PM
(This post was last modified: 12-14-2018, 10:07 PM by stockguru.)
A forward PE of 18 is not expensive for a great company like JNJ. If you go out to 2020 it’s only 14. Don’t go by Yahoo who has it at 223 lol . Stock is great buy here. I’m in it for 10-15 years!!
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12-14-2018, 11:18 PM
(This post was last modified: 12-14-2018, 11:30 PM by fenders53.)
I'm well aware JNJ PE is not 223. PE 14 in 2020 sounds good but the 2020 "E" is the point of this thread. In any event JNJ was NOT anything like cheap with their 5% +/-growth rate before this happened. I've owned and followed JNJ for about 24 years so if I sound like a short shill you'd be very wrong. Today surprised me and I want to believe it's overblown. I'm out now by sheer luck as I mentioned. I've sold a $1000 worth of puts on every small dip trying to get forced back in but it never cooperated. And L-T is the right attitude. It almost always works out for a quality company. This reminds me of the tainted Tylenol cases waaay back when. They recovered but it didn't happen quick.
You can say it's an over-reaction if it helps you, but JNJ just lost a $4.9 billion with a "B" lawsuit on the same subject. That seems more relevant tonight. That has impact on earnings but I originally brushed it off. Then today happened. It's a fact JNJ is a litigation target, like all the major drug companies, and there is blood in the water right now on this particular matter. I'll be watching closely for a re-entry point. I have no idea if that is Monday or 2020. For now I think it finds a trading range for quite a while. It will be awhile before I'll hope to know what "cheap" might be.
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Taking right from the JNJ website tonight. Comforting if your a shareholder and are thinking of buying more.
Statement on Reuters Talc Article
New Brunswick, NJ (December 14, 2018) -- Johnson & Johnson today issued the following statement regarding speculation about the safety of our products.
The Reuters article is one-sided, false, and inflammatory. Johnson & Johnson’s baby powder is safe and asbestos-free. Studies of more than 100,000 men and women show that talc does not cause cancer or asbestos-related disease. Thousands of independent tests by regulators and the world’s leading labs prove our baby powder has never contained asbestos. Johnson & Johnson will continue to defend the safety of our product. For the truth and facts about talc, please go to http://www.factsabouttalc.com.
The Reuters article is wrong in three key areas:
The article ignores that thousands of tests by J&J, regulators, leading independent labs, and academic institutions have repeatedly shown that our talc does not contain asbestos.
The article ignores that J&J has cooperated fully and openly with the U.S. FDA and other global regulators, providing them with all the information they requested over decades. We have also made our cosmetic talc mines and processed talc available to regulators for testing. Regulators have tested both, and they have always found our talc to be asbestos-free.
The article ignores that J&J has always used the most advanced testing methods available to confirm that our cosmetic talc does not contain asbestos. Every method available to test J&J’s talc for asbestos has been used by J&J, regulators, or independent experts, and all of these methods have all found that our cosmetic talc is asbestos-free.
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