Johnson & Johnson (JNJ)

Keeps making money year after year and raising their dividends year after year. He is very bullish on global multinational companies because he sees a bit of recovery happening in Europe, profits being made because of a rising euro, translating into more dollars back in North America, which translates into higher dividends and higher stock prices.

There is a little bit of upside left on this. As an operating company, this is one of the better pharmas but you have to be patient in waiting for it to come back to a reasonable level of low or mid $80s.

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.