Categories: Alpha Algorithm HotlinesStock Market News

The Alpha Algorithm Chooses the Bluest of Blue Chips

This week’s Alpha Algorithm generated a recommendation that many long-term investors just “buy and hold” forever. After all, Johnson & Johnson (JNJ) has not only outperformed the broad-based S&P 500 in 2016, but also over five-year and 10-year periods as well.

Founded in 1885 and based in New Brunswick, New Jersey, Johnson & Johnson manufactures and sells various products in the health care field worldwide. It offers consumer products that have become household names such as Listerine, Tylenol and Sudafed. It also operates in the pharmaceutical and medical devices areas as well.

JNJ (blue) vs. the S&P 500 (red) over one year

Five Top Investment Strategies Betting on Johnson & Johnson (JNJ)

1. High Quality Stock

Stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.

2. Fundamental Strength

A top U.S. stock based on fundamentals measured by book value, cash flow and sales dividends.

3. Dividend Aristocrat

The stock is among those that have increased dividends for at least 25 consecutive years.

4. Hedge Fund Alpha

Based on publicly available disclosures, successful hedge fund managers are investing in the stock.

5. Dividend Dog

It is one of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.

Recommendation

Buy Johnson & Johnson (JNJ) at market today.

Place your initial stop at $102.00.

Options

Since I tend to recommend options only when the stock has pulled back in the midst of an uptrend, I am holding off on recommending options this week.

Nicholas Vardy

Nicholas Vardy has a unique background that has proven his knack for making money in different markets around the world. He was the Editor of The Global Guru, a free weekly e-newsletter, and also edited the trading services Momentum Trader Alert, which focused on making short-term profits in the hottest markets in the world, and The Alpha Algorithm, which was designed specifically to deliver big, fast triple-digit winners, month after month. He was also the editor of Smart Money Masters, a monthly service focused on longer term investments recommended by the brightest minds in the business. Mr. Vardy has been a regular commentator on CNN International and the Fox Business Network. He has also published articles in The New Republic, The World and I, and The Baker & McKenzie Legal Review. The Global Guru/Nicholas Vardy has been cited in The Wall Street Journal, Newsweek, Fox Business News, CBS MarketWatch, Yahoo! Finance, and MSN Money Central. Mr. Vardy graduated from Stanford with a B.A. — with honors and distinction — in both Economics and History, and he also earned an M.A in Modern European Intellectual History. After winning a Fulbright Scholarship, he earned a J.D. degree at Harvard Law School where he was an editor of the Harvard International Law Journal. When not uncovering investment opportunities for his subscribers and investors, Mr. Vardy is a keep-fit enthusiast and an avid student of classical music.