Jim Cramer Called Johnson & Johnson “The Best Drug Stock, or at Least the Second-Best”

Johnson & Johnson (NYSE:JNJ) was among Jim Cramer’s stock calls on Mad Money recently. Cramer highlighted buying the stock for the Charitable Trust, as he stated:

We bought the stock of Johnson & Johnson today for the Charitable Trust… Are we crazy? No, we’re not crazy. We’re buying what may be the best drug stock, or at least the second-best if you’re Eli Lilly. We’re buying it into free fall. You don’t get a chance to buy the best at a discount very often. When you do, you buy some, then you let it fall a little more, and you buy some more. And we’ll likely get that opportunity because pharma is so out of favor… Why J&J right now? We’ve had a lot of noise in healthcare. It’s obscured a major FDA approval for a new J&J drug, Icotyde, an autoimmune drug for the treatment of moderate to severe psoriasis, which is a gigantic market…

Doesn’t hurt that the company decided to spin off its orthopedics business as a standalone company. This is a slower-growing piece of the pie, so the breakup will help unlock value. In the past, JNJ might have gotten credit for these moves, but right now, buyers have deserted the stock. I like that, too. Always remember, though, that this is the kind of stock that gets cheaper as it goes lower, which is why we’ve left plenty of room to buy more JNJ on weakness for the Charitable Trust. More important, your portfolio always needs to have a decent mix between what’s hot and what’s not… Here’s something I was taught at Goldman Sachs: They don’t all go up at once. To which I always said, but something should go up in your portfolio. And that’s why you buy J&J, one of the greatest drug companies out there, one of the greatest American companies out there, when everyone else is selling it.

Stock market data. Photo by Burak The Weekender on Pexels

Johnson & Johnson (NYSE:JNJ) develops and sells healthcare products, including pharmaceuticals and medical technologies, with treatments in immunology, oncology, neuroscience, cardiovascular care, and infectious diseases.

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