Johnson & Johnson (JNJ)

Market leadership will continue to provide growth and earnings. Should be a core position. He would tend to hold back for a market correction before buying more.

(Market Call Minute.) Has done well but he doesn’t think you are getting a higher valuation. Consumer sector growth continues and valuations are at the higher end of the range.

Would buy for a 10 year hold. They are dominant in their respective business. You can see consistent dividend increases over the years. 3% dividend.

Great company and you can do well with it.

If you look at what they do: household products. They have no trouble raising prices and they are moving into emerging markets. A great buy.

Likes that they are diversified. They have pharma, consumer discretionary and medical devices. There are catalysts in each of those divisions to keep earnings growing. Pharma division went through the expiration of all their patent drugs and have new products now that are doing well. In medical devices, they made an acquisition last year, which will expand their product portfolio, giving more leverage when dealing with hospitals. 2.9% dividend yield. Target of $95 over the next 12 months.

Rode this up and then took profits through a call. It is still on his radar screen to get into at a better entry point. They can improve cash flows still. It will take 12-18 months to make the change. He is not in a hurry. He would underweight this holding.

Do you carry or could you suggest any health care stocks? He participates through Johnson & Johnson. They have the consumer part of the business as well as the Pharma part of the business. Stock has done well and he is sticking with it. In Canada there isn’t much to choose from.

Likes health care. Biggest diversified health care company in the world. Virtually no patent expiries until 2016. Raised dividend every year for 50 years. 40% payout. Risks are operation in general. If China stopped 1 child per family rule, this one would benefit significantly.

(A Top Pick July 31/12. Up 40.18%.) His model price is $96.25, a 3% upside. Yield of 2.82%.

He could see it pulling back 5% or so to the 50 day moving average. That would be a great entry point. Given the type of company it is and the market that it serves (it is #1 or #2 in the areas it serves), it is a company that focuses on innovation. Around $86 would be a good entry point.

More inclined to take profits or reduce it some. Growth has not changed and multiple is higher. Has been a great place. But he would be taking money out of these areas.

(Top Pick Jul 31/12, Up 34.47%) $95 model price, 6.5% upside. He will sell when he can find more value in the space elsewhere. There is a little bit more. 2-3 years ago he thinks these companies will be trading above their model price.

A wonderful, wonderful company and if you want to have exposure to healthcare, you can’t go wrong with this one. Feels that these types of stocks, defensive dividend players in the US, are overplayed and overbought and the P/E ratios are too high for him to get into them. Prefers Teva Pharmaceutical (TEVA-N).

Great company. What he likes is that it is not a purely pharmaceutical company but is a 3^rd pharmaceutical, a 3^rd medical devices and a 3^rd consumer products so it is not relying on one big blockbuster drug. Has run up a lot because it is a defensive stock. Good yield.