Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
<<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
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.