Johnson & Johnson (Stock: JNJ) is a research and manufacturing company in skin care, wound care, nutrient and pharmaceuticals. What I love about JNJ stock is it owns the type of brand names that people use to describe all products in the same category like “BAND-AID” AND “Tylenol” and they make LEVAQUIN, an antibiotic that saved my hide when I had a staph infection the other month. These are the type of products that people will keep buying despite the economic hardships. Even after of the Tylenol scare of 1982 where the market share of pain killers went from 35% to 8%, but bounced back in less than one year. That’s brand loyalty!
Now my favorite long term CAGR chart:
Looking at the chart JNJ is below the 2 standard deviation line for the first time since 1984 or so. Also there is resistance along the 15.4% CAGR line (the current CAGR) around ’87 – 88 during the Black Monday time frame. The stock price has held up incredibly well compared to the general market only falling 14% in the last year compared to the S&P 500 which has fallen 41%. The real earnings are holding this stock up and when the market turns I believe it will float to the top and you can enjoy a nice safe 3.2% dividend while you wait.
JNJ Stock Technical Analysis:
The price is still below the 50 day moving average, however it appears the lows are getting higher and higher showing weakness in the selling pressure. While you may choose to wait for the price to break the 50 day it depends if you’re planning on trading this stock or investing in it. My vote is this stock is a better investment.
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