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URL:  https://boards.fool.com/ltltaccording-to-my-calculations-from-the-most-10205278.aspx

Subject:  Re: My 5 Finalists -- #5 J&J Date:  6/13/1998  5:18 PM
Author:  CashKingAl Number:  231 of 8329

<<According to my calculations from the most recent 10Q, they pass all the numerical CK criteria, other than near misses on the flow ratio.

Gross Margin -- 69.3%
Net Margin -- 17.5%
Leveraged Flow -- 1.56
Unleveraged Flow -- 1.75
Cash/Debt -- 2.69>>

I picked J&J because it came close to making the CK criteria (missing only on flow ratio, and then not by that much), and it got extra credit for consumer mindshare and a broad range of products. This gives the portfolio ballast in bad times, although it is likely to cost us in return over the long run.

The other way to go would be to purchase SGP, a pure pharmaceutical that really has their balance sheet in order. Of course, if their new drug pipeline were ever to dry up, then look out below (especially with their valuation). In this case Rob, Phil and I went one way, Tom the other.

By the way, I could probably be convinced that a better way to achieved stability in the portfolio would be to buy SGP and to increase the FF portion of the portfolio over time.

Al
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