The Warren Buffett Stock Portfolio: Warren Buffett Stock Picks: Why and When He Is Investing in Them by Mary Buffett & David Clark

Author:Mary Buffett & David Clark [Buffett, Mary & Clark, David]
Language: eng
Format: epub
Tags: Business & Economics, Investments & Securities, Stocks, Management, Personal Finance, General, Investing, Leadership
ISBN: 9781451606485
Google: Q1hlAW14l6IC
Amazon: B004T4KXNM
Publisher: Scribner
Published: 2011-12-12T23:00:00+00:00

CHAPTER 13

Johnson & Johnson

Address:

One Johnson & Johnson Plaza

New Brunswick, New Jersey 08933 USA

Telephone: (732) 524-0400

Website: http://www.jnj.com

Industry: Pharmaceutical/Health Care and Consumer Products

Key Statistics:

Public Company

Founded in 1887

Employees: 114,000

Sales: $65 billion (2011)

Net Earnings: $13.7 billion (2011)

Per Share Earnings: $4.95 (2011)

Average Annual Growth for Per Share Earnings: 9.99%

Per Share Book Value: $23.05

Average Annual Growth for Per Share Book Value: 11.23%

Dividend/Yield 2011: $2.28/3.4%

Years of Berkshire Purchase: 2006, 2007, 2010

Average Per Share Price Berkshire Paid: $60.85

Stock Exchanges: NYSE

Ticker Symbol: JNJ

As of 2011, Berkshire owns 45,022,563 shares, or 1.6% of Johnson & Johnson’s outstanding shares. With Johnson & Johnson trading at $65 a share, Berkshire’s position is worth approximately $2.93 billion; with a cost of $2.749 billion, Berkshire has a profit of $181 million on this investment.

Johnson & Johnson is a global manufacturer and seller of pharmaceuticals, medical supplies, and dozens of everyday brand-name consumer products. It has been in business since 1887 and one of its early brand-name products that came to own a piece of consumers’ minds was Johnson’s Baby Powder, and later Johnson’s Baby Oil. These products created the wealth to develop and market such everyday household staples as Band-Aid bandages, Motrin and Tylenol, Neutrogena skin and beauty products, AVEENO, and the brands Listerine and Benadryl. Johnson & Johnson employs over 114,000 people and has 250 companies operating in more than 60 countries.

The key for Warren is the brand-name products. Listerine, Band-Aid bandages, Motrin, and Tylenol are going to be around for a long, long time and the plants and equipment that are producing them have to be replaced only when the parts wear out. This creates far better long-term economics than, say, the auto industry, where companies have to go in every few years and spend hundreds of millions on research and development and retooling their plants to produce the latest model.

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