Johnson & Johnson (NYSE:JNJ) was among Jim Cramer’s latest stock calls, as he suggested investors balance portfolios with hot and cold stocks. Cramer noted that the stock has been “doing nothing,” as he said:
Or how about a stock I talked about earlier in the week that’s doing nothing, JNJ. Johnson & Johnson, AAA balance sheet, one of only two. The other being Microsoft. J&J has the best pipeline of potential blockbusters of any pharmaceutical company, yet it sells at a little less than 20 times earnings. These are just, these are discounts.
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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. On April 20, Cramer expressed his bullish sentiment toward the company and the stock 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.
While we acknowledge the risk and potential of JNJ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than JNJ and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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