Trade of the Day: Johnson & Johnson (JNJ) a Healthy Investment
received FDA approval for an advancement therapy to deal with double refractory myeloma. European approval was received in May 2016. Further, management thinks it will have 10 brand-new drugs from 2015 to 2019, each with the potential to achieve $1 billion in annual sales.Restructuring of its medical gadget unit, announced in January 2016, is anticipated to conserve$800 million to $1 billion by 2018. Standard & Poor's estimates 2016 and 2017 EPS of $6.73 and $7.01 and has a target cost of $143 which is 20.7 X their forward 12-month quote of $6.90.
Even more it rates JNJ as a four-star buy. JNJ pays an annualized dividend of $3.20, for a 2.8% yield, and has a quality ranking of "A."
This Dow member remains in the process of breaking to an uptrend after topping on Aug. 1 at $125. Ever since, the stock has actually been restrained by a downtrend line that approximately tracked its 50-day moving average. That line and the average were pierced recently when the stock gapped through resistance on really high volume however then retreated back to support and closed the open gap.This technical action sets JNJ up for another run through the resistance at$ 116 to $117. With the political scenario now resolved and an expectation of regulative relief at hand, that blue-chip drug stock should be bought.Thus, buy JNJ
at $116 with the presumption that it will break through resistance and accomplish a trading target of $135 for a proposed gain of 16% plus dividends.