InvestingDaily.com

Account Information

  • My Account

    Manage all your subscriptions, update your address, email preferences and change your password.

  • Help Center

    Get answers to common service questions, ask the analyst or contact our customer service department.

  • My Stock Talk Profile

    Update your stock talk name and/or picture.



Close
FEATURED STRATEGY

How To Collect Your Share of My Million Dollar Giveaway

How To Collect Your Share of My Million Dollar GiveawayWe recently kicked off the most outrageous initiative in the history of investment research. It’s called the Income Millionaire Project. And the goal is simple: create 1,000 income millionaires. That’s a $1 billion goal! No one has ever tried it before, but that doesn’t bother me. I’m so sure you can use this program to make a million bucks… I’ll pay you $1,000 to start your journey. Go here for details.

 

It’s Alive! Here’s What Zombie Trumpcare Means for Investors

By John Persinos on July 27, 2017

After a series of cliffhanger votes in the House and Senate, aggressive arm-twisting from President Trump, and a bombardment of special interest lobbying, it appears that Trumpcare is still alive. (Sort of.)

Vice President Mike Pence on Tuesday cast the tie-breaking vote to continue deliberations on the GOP’s sweeping health reform campaign known as Trumpcare. No Democrats supported the motion to proceed. After the vote to begin debate, the Senate considered a comprehensive replacement for the Affordable Care Act (aka Obamacare), but that fell far short of the votes needed to pass. The vote-a-rama continued on Wednesday, as the Republican-led Senate considered various measures to repeal and replace Obamacare.

The Senate’s efforts this week will either result in a measure that gets passed for the president’s signature or Trumpcare will remain dormant, neither dead nor alive. Republicans are determined to chalk-up a legislative win, so if they fail this time around, they could resurrect “undead” Trumpcare after the summer recess. To borrow the title of a James Bond movie, Trumpcare could go on to… die another day.

How’s an investor supposed to interpret this unholy mess?

Jim Pearce, chief investment strategist of Personal Finance, provides this insight:

“Whether Trumpcare eventually passes the Senate or not, medical equipment companies such as Johnson & Johnson should survive just fine, as demand for their products continues to soar regardless of politics.”

Jim also serves as chief of portfolio strategy for Investing Daily, the parent website for our entire family of publications. When he recommends a stock, it pays to listen.

Below, I explain why PF Growth Portfolio holding Johnson & Johnson (NYSE: JNJ) is one of your best health care plays, regardless of the zombie antics in the nation’s capital.

But first, let’s take a look at second-quarter earnings reports and what they portend so far. For the health care sector in general and Johnson & Johnson in particular, the numbers look good.

Second-quarter earnings on the upswing…

Better-than-expected earning reports this week have propelled the broader indices to new highs.

Among second-quarter scorecards to date, with 19% of S&P 500 companies reporting actual results, 73% have exceeded the mean earnings per share (EPS) estimate and 77% have beat the mean sales estimate.

So far, the blended earnings growth rate for the S&P 500 is 7.2%. Nine sectors are reporting or are expected to report year-over-year earnings growth for the quarter.

These strong operating results come amid a persistently overvalued broader market. The forward 12-month price-to-earnings ratio (P/E) for the S&P 500 is 17.8, which is above the five-year average of 15.4 and the 10-year average of 14.

As Jim Pearce observes: “Based on the forward P/E for the S&P 500 Index, it appears shareholders remain optimistic that these companies will be able to sustain strong earnings growth, despite the decreasing likelihood of a tax cut or infrastructure spending to boost the economy later this year.”

Among sectors, health care leads the pack in earnings surprises. The health care (100%), information technology (85%), and industrial (80%) sectors boast the highest percentages of companies reporting earnings that came in above estimates.

Johnson & Johnson: robust vital signs…

Which brings me back to Johnson & Johnson. Aging populations around the world and continued demand for health care, drugs and medical devices are tailwinds for Johnson & Johnson, a health care giant that makes medical devices and over-the-counter drugs.

Johnson & Johnson last week issued solid operating results for the second quarter of fiscal 2017. The company reported EPS of $1.83, beating analysts’ estimates by 3 cents.

Johnson & Johnson in June completed its $30 billion acquisition of Swiss biotech behemoth Actelion. Last week, JNJ management hiked its 2017 EPS guidance to a range of $7.12 to $7.22, up from a range of $7.00 to $7.15. The company also raised the low end of its full-year revenue forecast range to $75.8 billion from $75.4 billion.

Johnson & Johnson noted that revenue growth should accelerate in the second half of 2017 on strengthening demand for newer treatments such as cancer drugs Imbruvica and Darzalex. As “Big Pharma” struggles with expiring patents and the onslaught of cheaper generics, JNJ is betting on a new portfolio of costlier proprietary drugs to offset flagging demand for its older mainstay products such as diabetes drug Invokana.

With a robust dividend of 3.36%, JNJ should continue to provide steady income coupled with market-beating share appreciation. This diversified and vast (market cap $355.1 billion) blue-chip company is akin to a mutual fund of health and consumer markets.

JNJ’s consumer segment makes the products that are familiar to anyone who visits their local retail pharmacy, including Tylenol and Band-Aid bandages. The company’s medical devices division produces a range of products used by health care professionals in the fields of orthopedics, surgery, vision care, diabetes care, infection prevention, diagnostics, and more.

Johnson & Johnson is benefiting from economic recovery and also enjoys substantial pricing power, allowing it to charge more for its products without undermining demand.

The average analyst expectation is that JNJ’s year-over-year earnings growth will reach 6.8% in the current year and 7.5% next year. According to my calculations, JNJ is on track to achieve five-year earnings growth of at least 6.3%, on an annualized basis. Total return packages are rarely as enticing as Johnson & Johnson.

Got any questions or feedback? Send me a letter: mailbag@investingdaily.com — John Persinos

This man has a million-dollar secret…

As I’ve just explained, Johnson & Johnson is a superb growth-and-income play that should ride the health sector’s tailwinds no matter what Congress does. If you’re seeking other profitable opportunities that are resilient to political and economic vagaries, turn to Jim Fink.

That’s Jim, pictured to your left. He’s chief investment strategist of our top-tier trading service, Velocity Trader. If you walked by Jim on the street, you wouldn’t think “millionaire.” You’d probably think “average cubicle guy.”

Actually, Jim was a lawyer until he unlocked a secret trading system that made him a personal fortune of $5 million. Now he wants to share that system with you.

Jim’s proprietary methodology can take regular stock movements of 8%, 17%, or 34% and exponentially leverage them to generate profits of 100%, 300%, or even 800%.

When Jim Fink first launched Velocity Trader, he was confident enough to issue this challenge to readers: “If I don’t deliver 24 triple-digit winners in the next year… I’ll cut you a check for $1,950.”

Jim already has followed through. In less than a year, he racked up 24 triple-digit winners, along with more than 30 double-digit winners.

Want to know how Jim does it? Click here for his presentation.

 


You might also enjoy…

 

12 Stocks Virtually Guaranteed to Go Up in 2018

You may not believe it, but I have a calendar in my hands right now that tells me the exact date and time when a few stock are practically guaranteed to go up. 

Twelve of them, in fact.

And if you were to invest in them following the simple buy and sell instructions found in this calendar…

You could be making $1,181… $11,814…. and as much as $190,916 more than by using a “buy-and-hold” strategy.

And here’s the best part…

I’m giving away a few copies of this calendar to interested investors (First come, first served).

With this calendar, you could get higher profits with less risk.

Click here to get the full story, and to claim your copy.

Stock Talk — Post a comment Comment Guidelines

Our Stock Talk section is reserved for productive dialogue pertaining to the content and portfolio recommendations of this service. We reserve the right to remove any comments we feel do not benefit other readers. If you have a general investment comment not related to this article, please post to our Stock Talk page. If you have a personal question about your subscription or need technical help, please contact our customer service team. And if you have any success stories to share with our analysts, they’re always happy to hear them. Note that we may use your kind words in our promotional materials. Thank you.

You must be logged in to post to Stock Talk OR create an account.

Create a new Investing Daily account

  • - OR -

* Investing Daily will use any information you provide in a manner consistent with our Privacy Policy. Your email address is used for account verification and will remain private.