Giles Coghlan LLB, Lth, MA
Financial Source
Johnson and Johnson are trying to revive its attempts to get the US supreme court to resolve tens of thousands of lawsuits over its talcum powder products through the bankruptcy of a subsidiary company. This ongoing dispute concerns allegations of contamination in J&J’s talc product, which J&J denies. If J&J manages to succeed with this attempt then this could offer a significant upside to J&J. However, critics view J&J’s attempt here as an ‘attempted abuse of the bankruptcy system’. This was according to Leigh O’Dell, one of the lead attorneys for the plaintiffs in the lawsuit. J&J discontinued its talcum powder product worldwide this year over what it calls misinformation.
Seasonals are certainly strong for Johnson and Johnson and could offer an upside regardless of the ongoing court decision. With a portfolio of healthcare products, the healthcare sector is historically resilient during any potential recession.
Over the last 15 years between March 24 and May 15 Johnson and Johnson shares have risen by an average of over 25%. The winning percentage is also 80% and the maximum drawdown is nearly 4%. So, is Johnson and Johnson worth buying into this year?
Major trade risks: The major trade risk here is that further lawsuits weigh on J&J’s share prices.
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended content
Editors’ Picks
AUD/USD remained bid above 0.6500
AUD/USD extended further its bullish performance, advancing for the fourth session in a row on Thursday, although a sustainable breakout of the key 200-day SMA at 0.6526 still remain elusive.
EUR/USD faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
Bitcoin price continues to get rejected from $65K resistance as SEC delays decision on spot BTC ETF options
Bitcoin (BTC) price has markets in disarray, provoking a broader market crash as it slumped to the $62,000 range on Thursday. Meanwhile, reverberations from spot BTC exchange-traded funds (ETFs) continue to influence the market.
US economy: slower growth with stronger inflation
The dollar strengthened, and stocks fell after statistical data from the US. The focus was on the preliminary estimate of GDP for the first quarter. Annualised quarterly growth came in at just 1.6%, down from the 2.5% and 3.4% previously forecast.