We recently published a list of 14 Best Holding Company Stocks to Buy Right Now. In this article, we are going to take a look at where Johnson & Johnson (NYSE:JNJ) stands against other best holding company stocks to buy right now.
The Treasury Yield Market
The treasury yield has been moving towards its lowest point in a month following a comment from the Treasury Secretary, Scott Besson. The secretary suggested that the new administration is focused on the 10-year treasury and its yield, rather than the Fed cutting interest rates. On February 6, Ed Mills, Managing Director at Raymond James, appeared in an interview on Yahoo Finance to discuss his outlook on the market amid new economic, political, and tax policies.
Mills reiterated a very important factor raised in the Secretary’s speech the day before, suggesting that the Trump tax cuts from 2017 were to be made permanent, adding $4 trillion to debt and deficit over the coming 10 years. He added that the policies also desire to cut tips and social security taxes, now bringing the total debt and deficit to $5 trillion. Mills suggested that the debt and deficit were so huge that it would be extremely challenging for the government to keep the “long end of the curve down.”
Why Value Investing is the Way to Go
In another interview on March 5 on Yahoo Finance, Michael Sonnenfeldt, founder and chairman at TIGER 21, shared his market thesis amid changing macroeconomic and political trends. He shared that while turmoil and confusion are encapsulating the market, his clients remain very strong, emphasizing his inclination towards value investing. He also added that his members are finding significant value in private equity and the private real estate industry.
He suggested that while a lot of indicators in the market point towards a possible rotation from growth into value, he remains cautious about the changing conditions, reiterating that it is currently very challenging to find value in the market environment. Sonnenfeldt added that focusing on the fundamentals of equities is of crucial importance at the moment, rather than company momentum, amid volatile economic and political conditions. He shed light on his member’s buying strategy, which happens to be entirely focused on the basics of a stock, emphasizing that others should follow suit.
While some stocks pose a risk due to the current market conditions, some stocks, especially those with strong fundamentals and long-standing businesses, offer greater protection and certainty.
Our Methodology
To come up with the 14 best holding company stocks to buy right now, we went over similar rankings on the internet and compiled an initial list of 20 stocks. We then examined the hedge fund sentiment around every stock and picked the most popular ones. Our list is in ascending order of the number of hedge funds, as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A smiling baby with an array of baby care products in the foreground.
Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) is a healthcare and pharmaceutical company committed to excelling in innovative medicine and MedTech. The company has been operational for more than 135 years and now boasts a family of 130,000 employees focused on serving people with complex diseases using innovative medicine and technology. Some of its key therapeutic areas include Oncology, Immunology, Neuroscience, Cardiopulmonary, and Specialty ophthalmology. Johnson & Johnson (NYSE:JNJ) also has stakes in several subsidiaries including Janssen Pharmaceuticals, Ethicon Inc., Abiomed, and Johnson & Johnson Vision, to name a few.
On February 3, Vamil Divan, an analyst at Guggenheim, raised his price target on JNJ from $162 to $166, keeping a neutral rating on the stock. The decision came after JNJ released earnings for the fourth quarter of 2024, largely meeting expectations. The analyst firm is particularly drawn to see how its pipeline and execution in oncology, neuroscience, and immunology play out. In addition to that, Divan is also looking forward to seeing how JNJ sustains its mid-single-digit growth expectations while dealing with immediate headwinds.
In the fiscal year 2024, Johnson & Johnson (NYSE:JNJ) generated $88.8 billion in revenue, up by 4.3%. Its Innovative Medicine Worldwide segment logged $57 billion and its World MedTech segment logged $31.9 billion in sales. According to the company, 2024 was quite a transformational year for JNJ, marking strong growth in its medicine portfolio and acceleration in innovative discoveries.
Overall, JNJ ranks 6th on our list of best holding company stocks to buy right now. While we acknowledge the potential of JNJ as an investment, our conviction lies in the belief that certain 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 but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap
Disclosure: None. This article is originally published at Insider Monkey.
