Profit Pregame

Here’s What Not to Do When it Comes to Johnson & Johnson

Johnson & Johnson has reported earnings…

This company stumbled – but didn’t fall.

What’s happening?

Johnson & Johnson reported earnings yesterday, and the numbers were surprising. Second-quarter profits sank 35% from a year earlier as the coronavirus forced hospitals to postpone elective surgeries, which impacted the company’s medical device business.

J&J earned $3.63 billion, or $1.36 per share over the second quarter. These numbers equated to a 34.6% drop from last year’s sales at this time – which were reported at $5.6 billion. But truthfully, it wasn’t as bad as it could be. But the decline in medical sales was offset by an explosion in sales in the companies over-the-counter products like Tylenol.

But it wasn’t all bad news.

Despite the drop in profit, the company did beat earnings expectations overall. J&J reported adjusted earnings of $1.67 per share, which was higher than the predicted $1.49 per share. The CEO noted that the numbers posted continue to show the impact of Covid-19 on the economy and prove the strength of the pharmaceutical industry.

Where’s the money?

I’m sure it comes to no surprise when I say this, but once the earnings report was released, and many saw despite falling profits, the stock beat expectations – investors began to throw money into the stock.

And that seems to be the trend lately. Any stock that posts half-decent numbers has investors dumping money into the stock. But the other reality is that the investors are moving money out of the stock just as quickly as they came in. And while J&J quickly moved up post-earnings, it sold off shortly after.

Now, this sell-off could be investors taking their profits, but after watching this stock over the past few months – I believe that selling this stock so early wasn’t the best move.

And here’s why…

How can I get some?

Here’s the thing that most investors are missing as they sell this stock…

Since March, the stock is up 40%. That’s why when the earnings reports rolled out; I wasn’t surprised that they beat earnings. On top of this, after every pullback this stock has faced – it’s been bought.

These two reasons are why I believe that J&J is not only a buy right now – but a buy and hold. Especially while the stock is facing a pullback in price due to the sell-off from profit takers.

And truthfully, amidst the volatility, I believe that any company that is linked to healthcare and a possible vaccine should be bought on pullbacks because healthcare will be the industry that bounces back from the current crisis.

That’s why, I believe that Johnson & Johnson is not only a safe investment but one that could pay off in a big way. So, I’ll be looking to add it to my lineup and I think you should too.

Speaking of the current environment…

Even though I see the volatility brought on by Covid-19 continuing, my S.C.A.N. trading system keeps filtering out the noise and locking in on the best profit opportunities in the markets.

In fact, for the crazy year that’s been 2020, my readers and I have been able to generate an average return of over 88% on all closed positions!

With the markets looking more and more likely to maintain this roller-coaster pattern, there’s never been a better time for you to join the rest of my Project 303 readers in securing opportunities for wins like this.

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In the Spotlight: This pizza chain beat expectations too

While many restaurants have struggled with the pandemic, Domino’s Pizza Inc. isn’t one of them. As lockdown mandates grew, dine-in restaurants were hit hard, but Dominos has seen an uptick in orders. In fact, the pizza chain’s shares, that have risen about 41% this year so far.

Coronavirus has heavily impacted the food industry as stay-at-home orders have forced restaurants to shut dine-in options and layoff thousands of employees to stay afloat.

But for Dominos, it’s been the opposite. Second-quarter U.S. same-store sales surged 16.1%, beating analysts’ estimates of 10.67%, and the company is still hiring daily, showing there’s no expectation that the growth will slow anytime soon.

Dominos has become the world’s largest pizza company over the years and, in a recent press release, noted that customers ordering behavior had skyrocketed over the last few months. And with this kind of performance, they’ve officially caught my eye.

So, I’ll be keeping a close eye on this, and I’ll be sure to keep you updated.

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