If you were to tell me that Club names Estee Lauder (EL) or Danaher (DHR) would ever miss their quarters not once but twice, I would have told you to go get your head examined. These are clockwork beat and raise companies, which is why it’s so hard to value them now. Johnson & Johnson (JNJ) is also a head-scratcher. All of these have been troubled stocks in this year’s market resurgence. Here’s an update on each and why I’m reluctant to give up on them yet. DHR YTD mountain Danaher YTD performance Danaher’s made a series of disposals to go all in on life sciences, which now looks like a really bad bet because there have been so few initial public offerings (IPOs) of life sciences companies. I don’t think I have ever seen such a drought since the love for biotech began in October 1980, with the wild opening for Genentech (now of Swiss biotech giant Roche). That let the floodgates open. Can Danaher pivot? I think they are, but they need to make an acquisition to change the mix. I know they are upset with themselves, I have enough sources to prove that. But it hasn’t really meant anything because they seem so caught looking the wrong way. EL YTD mountain Estee Lauder YTD performance Estee Lauder just shocks me. This company has pivoted so many times: first a dependence on U.S. department stores, then a move to China, and then a blowout connection with duty-free stores globally only to discover that the duty-free chains overordered expecting a wave of Chinese tourists that never showed. Now both companies have to prove their mettle. I am reluctant to bail on Danaher because the pent-up demand for biotechs that want to come public might be ready after they see how well the Cava (CAVA) IPO did last week, nearly doubling on its debut Thursday. Estee Lauder, at the end of this week, acted like there was something going on, but I can’t fathom what it might be. I just don’t want to give up on the Houdini of CEOs, Fabrizio Freda, who knows this business better than anyone. Can he have something up his sleeve? He sure has before. But these two companies are not alone. JNJ YTD mountain Johnson & Johnson YTD performance If you told me that J & J would be embroiled in a gigantic talc class action suit after former CEO Alex Gorsky assured me endlessly when he was at the helm that there was no asbestos in it, I would say, “Wow, Gorsky’s legacy is taking a hit here.” The company is willing to part with $8.9 billion right now, which is not enough for some of the plaintiff’s bar and that’s nothing short of incredible. That said, there’s a suit going on in Northern California with a dying 24-year-old man claiming that excess use of J & J baby powder is to blame, which could make $8.9 billion look small. Bottom line Johnson & Johnson, Estee Lauder and Danaher are why this business of stock picking and running a portfolio can be so daunting. They are all blue chips names, for whatever that’s worth. All are historically well-run with amazing balance sheets. And…
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