The Top Reasons Johnson & Johnson is a Buy

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The U.S. flag is seen over the company logo for Johnson & Johnson to celebrate the 75th anniversary of the company's listing at the NYSE in New York

Johnson & Johnson (JNJ) has become ridiculously oversold.

In fact, if you pull up a two-year chart with RSI, MACD, and Williams’ %R, you can see it.  All three indicators are deep in oversold territory, as the stock catches double bottom support. The last time JNJ was this technically oversold, it exploded from an October low of about $158 to $180.  We’re hoping to see the same happen again, near-term.

Helping, the company just guided above expectations.  JNJ now expects to see adjusted EPS of $10.55 for 23023, which is above expectations for $10.33.  According to Barron’s, “The guidance sets an unexpectedly positive tone for big pharma earnings season and could allay fears that inflationary pressures are catching up with the pharmaceutical industry.”

Better, excessive fear may soon breed opportunity.

As Warren Buffett still advises, “Be fearful when others are greedy and greedy when others are fearful.” Or, as Sir John Templeton would advise, “Buy at the point of maximum pessimism.” Or even as Baron Rothschild would tell you, “Buy the blood in the streets, even if the blood is your own.”  Again, that’s because fear often breeds opportunity.

In fact, crisis investing is one of the world’s greatest wealth-building secrets known to history’s greatest investors.  The Rothschild family used it to make millions on the London stock exchange back in 1800.  Sir John Templeton exploited this very same strategy to quadruple his portfolio after the Great Depression, buying on excessive pessimism.  Warren Buffett used this strategy after the financial crisis of 2008 and made billions of dollars.