Recently I made a change to my portfolio. After several years of patient ownership, I decided that I had had enough of the foibles and struggles of healthcare giant Johnson & Johnson (JNJ) and that it was time to move on to a new idea. While JNJ still features prominently on many lists of “top healthcare” or “top dividend” stocks, I would suggest that investors might want to think about this a little further. Perhaps there are still valid reasons for owning Johnson & Johnson, but maybe some investors will agree that it is time to give up on the idea that JNJ will live up to our ideas about what it should be.
With that in mind, here are the leading reasons that I quit on Johnson & Johnson:
1. Little Leadership
Quick – name a market in which Johnson & Johnson is really a dynamic force and an industry leader.
That is a big problem; there is relatively little that JNJ still does very well. Although JNJ has shown an ability to buy its way into attractive markets, it seems to lack the foresight and follow-through to really maintain that leadership. JNJ was the early leader in stents, only to lose out to better products and marketing from Guidant (now owned by Boston Scientific (BSX)) and Medtronic (MDT). Drug-coated stents offered an eerie repeat – JNJ was was among the first, but saw that lead crumble due to competition from Boston Scientific, Medtronic, and Abbott (ABT).
Please continue to the full article at Seeking Alpha:
http://seekingalpha.com/article/256373-why-i-finally-gave-up-on-johnson-johnson
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