Is JNJ a value stock?

**forestforever** Wed Apr 19, 2006 10:40 pm

Is JNJ a value stock?
P/E is the lowest in the last 5 years. Managment is solid. It's in fast growing Healthcare industry. But JNJ's growth slows down a bit this year.

**blast_investor** Thu Apr 20, 2006 10:06 am

Hi forestforever,

There are investors arguing that JNJ is cheap because its valuation is cheap compared to its own valuation range over past many years.

We do not use same style of "relative valuation" method. Our belief is that drug company like JNJ is fairly valued. Drug company also has patent expiring issues and technology innovation and competition uncertainty so that we are not interested in drug company like JNJ.

**forestforever** Thu Apr 20, 2006 7:09 pm

"patent expiring issues and technology innovation and competition uncertainty"

Are these the same reasons for not buying pfizer or any other drug company? Thanks.

**geoduck** Thu Apr 20, 2006 7:53 pm

From gurufocus.com there are lots of gurus are on board with pfe already. Blast, can you comment on their logic behind pfe?

Pfe probably are facing the patent expiration issue but is that fixable thru acquisition?

forestforever wrote: "patent expiring issues and technology innovation and competition uncertainty"

Are these the same reasons for not buying pfizer or any other drug company? Thanks.

**blast_investor** Thu Apr 20, 2006 8:49 pm

I am aware of that too. We also found that lots of value investors are into drug stocks, particularlly Merck and PFE, to less degree JNJ.

geoduck wrote: From gurufocus.com there are lots of gurus are on board with pfe already. Blast, can you comment on their logic behind pfe?

Pfe probably are facing the patent expiration issue but is that fixable thru acquisition?

**blast_investor** Thu Apr 20, 2006 8:54 pm

Yes, Same reason on PFE and MRK. We are less interested in drug sector although I am aware that lots of value investors are in this sector.

forestforever wrote: "patent expiring issues and technology innovation and competition uncertainty"

Are these the same reasons for not buying pfizer or any other drug company? Thanks.