Johnson & Johnson (JNJ)

He bought it to increase his healthcare holdings. They have several business: prescriptions, medical devices, a huge consumer business, and vaccines. He's waiting for med. devices to pick up after operations resume globally after Covid. JNJ and Merck seem to lag the others in vaccines, but there'll be many opportunities to sell vaccines--vaccines will be a big winner for JNJ.

Looking at the technical structure of the stock, the 200-day moving average has been moving sideways. We are not seeing growth, similarly to Pfizer. There is a 5-6% growth rate but paying 17x forward price earnings. A good quality name but there is not enough growth.

One of the companies going through a vaccine trial. They were in the news recently because they had to pause trials due to an illness in a test participant. However, it is not just about the vaccine. They have consumer, pharma and medical device. There is still litigation list from the talc issue. It trades at 15x earnings, which is reasonable but it does take into account vulnerabilities. He prefers BDX.

JNJ vs. ABT Similar businesses. You absolutely need exposure to healthcare. He holds JNJ for the dividend aristocrat qualities. ABT has been impressive. Testing platform has been phenomenal and will continue to ramp up. It's a great addition to portfolios at these levels. Tough choice between the two, but ABT probably has more immediate upside.

It's not cyclical enough to thrive. They're diversified in pharma (drugs) and medical devices. The former benefited from the lockdown from a stockpile in meds they were able to still sell, but now he doesn't know if medical devices can fully benefit from the backlog of surgeries that is being addressed now. Doesn't know if JNJ leads in medical devices. Also, JNJ isn't cyclical, which is where should be flowing. JNJ is trying to respond to the rise of robotic surgery by Intuitive Surgical, which he prefers. This take time and research for JNJ, which means Intuitive will still be ahead of JNJ. JNJ as a defensive will underperform cyclicals, which is where the market is heading as we exit this recession.

Owns JNJ instead of Pfizer, because she likes its diversity, and its product pipeline is strong. PFE has a strong balance sheet, but JNJ's is stronger. JNJ's medical device side is recovering nicely, plus they were able to give guidance at a time when many companies can't.