Welcome to this week’s Top 5 weekly update. Each and every week, we will be presenting the top stock out of our picks for the week – just for you.
Top 5 continues to provide hit after hit from our weekly stock trades. Right now, the average gain from the trades that hit their targets is running at a fabulous 7.45%. Of course, that’s just for a handful of days, so this adds up and adds up quickly week after week.
And last week, we just closed out two more quick hits from our five targeted stock plays – all adding to our running strong average and total returns.
The total running gain from all of the hit trades is currently at 402.07%. Again, that’s a phenomenal record from trades that take just days to hit and that are presented each and every week inside Top 5.
Now, let’s get right to the meat of the matter for today with your Top 5 stock for this week:
Johnson & Johnson
Johnson & Johnson (JNJ) is a long-standing healthcare company that has products and services that span everything from daily living to lifesaving drugs and vaccines.
The company traces its roots back to 1885 in New Brunswick, New Jersey with the Johnson brothers, James and Edward.
Originally, the brothers had a series of medical products that they expanded to include surgical supplies including dressings.
And later in the 1920s, they expanded with some of their now classic consumer health products including Band-Aid bandages that are now known and bought worldwide.
Sales are firmly on the incline over the past four trailing quarters with the latest showing a gain of 27.14%.
Johnson & Johnson Quarterly Revenue Gain — Source: Bloomberg
That revenue growth has been a longer-term reality as the average for the past five years is running at 48.05% on a compound annual growth rate (CAGR) basis.
Operating margin is fat. The current rate is now at 23.90%, which in turn feeds an impressive return on shareholders’ equity of 26.80%.
The company is very underleveraged with excellent credit. It keeps plenty of cash on hand even with steady and dependable cash flows from its myriad of products and services.
And its debts are very low at only 20.20% of assets. This provides plenty of opportunity for easy access to credit for additional capital if ever needed.
The company treats shareholders well – and not just with the return on their equity – but with dividend income now yielding 2.40%.
Overall, the shares have been strong. Since March of last year to now – the stock has returned 63.75%.
Johnson & Johnson Total Return — Source: Bloomberg
Even with the stock’s gain and overall return, it is reasonably valued at a current 5.20 times its trailing (and rising) sales. It also has a rising asset value boosting its overall book (intrinsic) stock value by 10.90% over the trailing year.
Johnson & Johnson Price — Source: Bloomberg
So, you’re buying into a stock that is reasonably valued on a price to sales and price to book basis with a dividend and proven gains – and with good and dependable credit.
The Top 5 Target to Hit
The stock is trading as of late Friday at 175.06 a share. And we have a target price next at 178.32 for a cash gain opportunity now at 1.87%.
But again, this is a quick gain opportunity right now – that like so many of the proven stocks in the Top 5 track record point to strong gains over and over again.
So, Johnson & Johnson makes for a top stock to buy right now in Top 5.
Keep on Trading,
Editor, Josh’s Top 5
P.S. This is a great pick, but it’s still only one out of my Top 5. To find out about the rest of the trades I’m recommending, complete with specific entry and exit points, you need to click here and join me on the Top 5 journey…