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This is The Best Stocks in the Market, brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management.<\/p>\n
Josh \u2014 We currently have 17 health care sector names on the Best Stocks in the Market list, a group that has been expanding throughout the year. Today, we\u2019ll discuss one of the most recognized and esteemed health care stocks globally. Johnson & Johnson (JNJ) has been refining its operations post-pandemic, and Wall Street is finally acknowledging this with rising earnings expectations and a climbing stock price. JNJ shares have been consolidating within a well-defined range for several years \u2014 a phenomenon technicians refer to as “building a base.” The general idea is that if and when a stock breaks out from its typical range, the subsequent move could be significant, especially if that range has constrained the stock for an extended period. An old adage from The Street states, “the bigger the base, the higher in space.” Well, this is a substantial one\u2026<\/p>\n
JNJ is undergoing a significant transformation, having identified and pursued a few primary objectives: becoming a pure-play health care company focused on two high-growth pillars: Innovative Medicines (oncology, immunology, neuroscience) and MedTech (surgical robotics, cardiovascular devices, orthopedics). They spun off the consumer products division, now named Kenvue, in 2023 to streamline focus and free up capital. Pipeline expansion is also a priority \u2014 JNJ is working on enhancing its in-house next-gen drug platforms like IMAAVY (immunology) and CARVYKTI (oncology), while acquiring new assets such as CAPLYTA (CNS) via Intra-Cellular Therapies. JNJ is making significant strides in the devices and robotics sector, making bold investments in the future of medicine. Becoming a MedTech giant is an exciting new development for shareholders curious about future growth prospects. They\u2019ve been expanding into the high-growth cardiovascular space (Shockwave, Abiomed) and developing a robotics business with the OTTAVA surgical platform. Cleaning up the way M & A has historically been conducted at JNJ (and elsewhere in Big Pharma) has been one of Duato’s stated goals, and he should know, having been with the company since 1989. The new strategy is to be more strategic with acquisitions \u2014 focusing on disciplined deals to fill portfolio gaps rather than pursuing mega-mergers.<\/p>\n
Lastly, there remains a legal risk related to the talcum powder lawsuits. JNJ has made three unsuccessful attempts to resolve the class actions and torts via bankruptcy court. They are now shifting strategies \u2014 litigating cases individually to clear the overhang. The Street is not overly concerned about the final financial outcome of this issue. These initiatives are beginning to yield results. JNJ joined the Best Stocks list on July 16, and as you can see, this coincides with an improved outlook for earnings. Below, I am showing the last thirty years or so of JNJ’s share price compared to its trailing twelve months’ earnings per share. With this trailing 12-month EPS number soaring to record highs, it\u2019s no surprise to see the stock price following suit. In July, JNJ raised guidance for the remainder of the year and shared a wealth of positive news about the future. The stock has been rallying ever since and is now poised to challenge the high end of the range. After five years of consolidation, the next earnings report (Oct. 14 premarket) could be the catalyst that finally propels the stock into a new space.<\/p>\n
Sector leaderboard As of Sept. 15, there are 204 names on The Best Stocks in the Market list. Top sector ranking: Sean \u2014 Health care has faced a challenging year. It\u2019s the worst-performing sector in 2025, up only 1.3% year to date. Numerous negative headlines have caused household names like UNH and REGN to drop 60% from their highs. However, something intriguing is happening beneath the surface. Some of these stocks are making comebacks. Here are some of the best health care performances from the past month: UNH up 29%, CNC up 20%, LLY up 10%, MOH up 11%. As these names don their rally caps, they are systematically being added to our list. In June, there were just 11 health care names on the list; today, there are 17: Top industries: Top 5 Best Stocks by relative strength: Sector spotlight: JNJ has traded sideways since about the end of 2022. This is the first significant breakout the stock has experienced since the Covid era. The fundamentals are also breaking out, as Josh noted above. As of the latest earnings, full-year 2025 sales guidance was raised to $93.4 billion, representing 5.4% year-over-year growth. JNJ has now achieved five consecutive quarters of revenue growth post-Covid, and this latest guidance would mark six consecutive positive quarters. JNJ also raised EPS guidance by $0.25 to $10.85, indicating 8.7% year-over-year growth. JNJ is a product development powerhouse. They now have 13 brands growing double digits within the innovative medicine category. Within this category, they have 21 products on the market and 46 “approved indications,” which are the specific diseases or conditions that regulators have authorized JNJ to treat. On the MedTech side, their product portfolio is also experiencing solid growth. The MedTech division grew revenue by 6.1% year over year, led by cardiovascular products, which grew by 22.3%. JNJ has this visual in their earnings presentation: Year to date, JNJ has allocated $6.7 billion toward research and development, distributed $6.1 billion in dividends to shareholders, and committed $15 billion to M & A activity \u2014 much of which, as Josh noted, is currently being streamlined.<\/p>\n
Risk management Josh \u2014 Investors should be collecting the roughly 3% dividend yield and accumulating shares opportunistically as long as the stock remains above that clear support level at $150. Below that level, something may be amiss, and I would exit and let the stock set up again. Shorter-term traders can adhere to the rising 50-day trendline as they anticipate the big breakout (above $180). I would take a half-position here and then double up as it breaks out. Averaging up on a breakout is a professional strategy. Most amateurs struggle to do it.<\/p>\n
DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY. THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. INVESTING INVOLVES RISK. EXAMPLES OF ANALYSIS CONTAINED IN THIS ARTICLE ARE ONLY EXAMPLES. THE VIEWS AND OPINIONS EXPRESSED ARE THOSE OF THE CONTRIBUTORS AND DO NOT NECESSARILY REFLECT THE OFFICIAL POLICY OR POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC. JOSH BROWN IS THE CEO OF RITHOLTZ WEALTH MANAGEMENT AND MAY MAINTAIN A SECURITY POSITION IN THE SECURITIES DISCUSSED. ASSUMPTIONS MADE WITHIN THE ANALYSIS ARE NOT REFLECTIVE OF THE POSITION OF RITHOLTZ WEALTH MANAGEMENT, LLC” TO THE END OF OR OUR DISCLOSURE. Click here for the full disclaimer.<\/p>\n","protected":false},"excerpt":{"rendered":"
This is The Best Stocks in the Market, brought to you by Josh Brown and Sean Russo of Ritholtz Wealth Management. Josh \u2014 We currently have 17 health care sector names on the Best Stocks in the Market list, a group that has been expanding throughout the year. Today, we\u2019ll discuss one of the most […]<\/p>\n","protected":false},"author":1,"featured_media":922,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[],"class_list":["post-921","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-personal-finance"],"_links":{"self":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts\/921","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/comments?post=921"}],"version-history":[{"count":1,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts\/921\/revisions"}],"predecessor-version":[{"id":1426,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/posts\/921\/revisions\/1426"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/media\/922"}],"wp:attachment":[{"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/media?parent=921"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/categories?post=921"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/igorsplayground.com\/appcheckr\/wp-json\/wp\/v2\/tags?post=921"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}