|To: Rarebird who wrote (115232)||11/12/2021 6:33:33 PM|
|Shares of Johnson & Johnson ( NYSE:JNJ) rose 1.2% on Friday after the healthcare colossus announced its intention to split itself into two independent companies. |
So what J&J plans to separate its consumer health operations from its medical device and pharmaceutical divisions. The transaction is expected to be completed within the next two years, pending board and regulatory approval.
The plan would create a new consumer health company with a formidable presence in areas such as baby care, wound care, and oral health. It would possess a stable of popular brands, including Johnson and Johnson's Aveeno, Neutrogena, Band-Aid, Tylenol, and Listerine, that are collectively forecast to generate revenue of roughly $15 billion in 2021.
IMAGE SOURCE: GETTY IMAGES.
After the proposed split, J&J would remain a powerful force in the healthcare industry with a projected $77 billion in annual revenue. The company said its pharmaceutical and medical device businesses will remain united due to their shared focus on research and development, and comparable regulatory and competitive environments. Oncology, immunology, and orthopedics will continue to be key specialties. Management also intends to accelerate investments in advanced technologies like robotics and artificial intelligence.
"This planned transaction would create two businesses that are each financially strong and leaders in their respective industries," Joaquin Duato, who is slated to become J&J's CEO in January, said in a press release. "We believe that the new Johnson & Johnson and the new consumer health company would each be able to more effectively allocate resources to deliver for patients and consumers, drive growth, and unlock significant value."
Now whatSplitting itself up could result in two companies that are together worth more than the $435 billion J&J is valued at today. Investors would have the opportunity to choose among the relatively low-risk consumer goods business and the higher-growth pharmaceutical and medical devices company.
Pure plays typically enjoy higher valuations than conglomerates as they allow investors to target stocks that better align with their risk profiles and objectives. J&J's shareholders hope that will prove true following its intended restructuring.
|RecommendKeepReplyMark as Last Read|
|To: Cogito Ergo Sum who wrote (115236)||11/12/2021 9:15:44 PM|
|I focus on the charts, not the news and the charts tell me this market is headed a lot higher, to at least SPX 6k. It won't be pretty when it ends, but it never is. Lots of tears, grief and heartache. |
Timing is everything in stock land.
Life is a gift I cherish.
Nothing lasts forever. But I can enjoy it while it lasts before the Darkness comes.
I have an escape plan when the time comes.
Enjoy the Bull ( and Life) while it lasts.
|RecommendKeepReplyMark as Last Read|
|To: Sun Tzu who wrote (115215)||11/23/2021 8:52:40 AM|
|So, what do you do in a situation like this where it appears that Gold is back below its old trading range ( pending the close, of course) after recently breaking out? Do you sell or hold? |
There needs to be a time line for a break out to be considered a true break out. Lots of stocks temporarily break out of their range and then reveal that it was a fake out a few days or a week later.
|RecommendKeepReplyMark as Last ReadRead Replies (2)|
|To: Sun Tzu who wrote (115243)||11/23/2021 12:46:35 PM|
|What took place in regard to Gold is typical: lots of stocks have strong breakouts and then retreat into their own range shortly thereafter. I went through this with AA, which broke out recently with an 11% daily gain, only to fall back within its old range. But now the range has extended. I am up a bit, nothing special. I am long a number of stocks that go up/down 5% on a daily basis. Their daily range is sometimes 7-8%. |
In the case of Gold, I think you were wise selling. I say this because Gold is a momentum trade and the momentum was broken today.
I am long stocks that trade within a box of 15%. They hold the range for months, then boom!! It is all about your time horizon and how you size up the company, fundamentally speaking.
|RecommendKeepReplyMark as Last ReadRead Replies (1)|