Investing in Johnson & Johnson on the Stock Market
The stock market may be forgiven for schizophrenic impressions of Johnson & Johnson (JNJ). The company’s products save lives, are entirely dependable, and many are gentle enough to use on the new born. However the marketing of JNJ is like the behavior of a ferocious dog, giving no quarter to any competitor!
Either way, JNJ deserves stock market investment support because it is a rare blend of sophisticated technology and gut wrenching competitive ability; a majority of the company’s revenues comes from generics branded and priced for superior stock market returns.
The company has a broad range of healthcare products, and commands dominant shares for leading brands; it has a stranglehold of respect from the medical community, and its branding influence on consumer minds is hard to break indeed.
JNJ has chosen business lines in price insensitive segments. No one will argue with the cost of sutures for an operation, or with the value of bandages for wounds. Many of these products are from simple ingredients and processes, made in aseptic conditions. This is no rocket science, and can be carried out by a host of small entrepreneurs. However, trust makes a difference in emergency situations, and JNJ has few competitors in this respect.
JNJ has nurtured the corporate brand for decades, and now milks it with devastating leverage. There could hardly be any instances of health care professionals staying away from the company’s brands, even though they cost more and have no tangible benefits over the competition.
A stock market observer can glean superlative human resource development strategies in JNJ, because there is a remarkable uniformity and focus of the core business approach for decades. The company operates from positions of incredible strength, though it rightly maintains a relatively low profile in stock market circles.
JNJ should be a generous part of everyone’s stock market portfolio. Sheer management excellence and tremendous brand values will ensure superior returns for investors. Here is a company which is not dependent on the umbrella of patent protection to generate profits. Its street fighting capability makes it something like the U.S. navy seals in market terms!
We can count on J&J in every sense of the word!