Life Term Strategies

1. Huge Gains in Long Term
- Receive significant capital gains
- by investing in corporations
- (with wide economic moat & average peers’ net margin)
- In very very long term

2. Strong Periodic Cash Flow
- Maintain self-sufficient monthly cash flow
- Through dividend, gains on derivative & short term trading
- For re-investment to item # 1 mentioned above

3. Mind for Risk Management
- Ensure strong cash position
- Maintain low risk by continue monitor, analyze & feel:
economic trend & environment,
market condition & investors emotion
corporate performance & outlook
asset allocation & direction

4. Be a holy Christian investor:
- Invest in wisdom & varies ways, but consistent & not over nor under of what the Holy Bible expects a Jesus follower should be
- Keep regular & long term spiritual growth
Continue experience God @ finance market
Aim for life transform opportunities
- Even though it may not teach Billy & Bilibala what stocks to invest nor how to make more, more & more $

4.15.2009

Johnson Johnson 1q09 results

Overview
Johnson & Johnson is a is a leader in the pharmaceutical, medical device and consumer
products industries, operate in 3 primary lines of Pharmaceuticals (38.5% of sales), Medical Devices and Diagnostics (36.8%) and Consumer Products (24.7%).

1Q09 Results (vs 1Q08)
1. Sales down 7.2% to $15B
  • Sales is in an decreasing trend since 2q08 mainly due to the negative impact of currency;
  • Operational results declined 1.2% and the negative impact of currency was 6.0%. Domestic sales down 5.0%, International sales down 9.6%, reflecting operational growth up 3.0% and a negative currency impact of 12.6%
  • Geographically, operating results down 5.0% in US, down 0.2% in Europe, up 4.5% in America (ex US) and up 8.5% in Asia Pacific & Africa
  • Patent loss on Risperdal is one of the key driver for the sales down, sales loss 64.2% or $534M in 1q09;
  • Consumer product sales down 5.1% in US.

2. EPS was $1.26 same to 1q08

  • Gross margin keep at 70 - 72% range;
  • Net margin up to 23.3% from 22.2% in 1q07 & from 17.9% in 4q08
  • Expenses cut in R&D as well as S&A during 1q09 compare to trend, I guess it is due to weak economy outlook

3. Balance Sheet

  • N/A

Risk

  • Patent expirations on JNJ's major drugs;
  • Regulatory delays or non-approvals on JNJ's new drugs;
  • Competition in generic drugs market;

Bilibala with Johnson & Johnson

  • My dad & I use Listerine everyday, we found it is the best oral care product;
  • When something or someone cause me headache, I will take Tylenol;
  • There is a JNJ office very close to my home sweet home.

Comments:

BUY, fair value at US$74.72.

Total sales have 2 drivers: price and volume. Since JNJ consumer product is fall under the consumer staple sector, usually one of the strongest defensive sector during recession. If JNJ's consumer sales down is mainly due to a volume decline. The recession is in deep trouble. If it is due to price discount to business partners (Wal-Mart, Target etc) and customers, then it only reflect the business decision during recession to boost sales volume. In JNJ, that's mix of the two.
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