John C. Reed, Executive Vice President, Innovative Medicine and R&D of Johnson & Johnson (JNJ -1.12%), executed an open market sale of 19,137 shares as disclosed in a Form 4 filed July 18, 2025.
Transaction summary
| Metric | Value |
|---|---|
| Shares traded | 19,137 |
| Transaction value | $3.13 million, as reported in the SEC Form 4 filing dated July 18, 2025 |
| 1-year performance (as of July 18) | 8% total return over the past year (calendar year basis) |
Key questions
How does this transaction compare to John C. Reed’s historical trading activity?
This sale is smaller than Reed’s historical median transaction size of 36,239 shares, and follows a recent trend of reduced trade volumes and more frequent selling over the past year, with only 20% of his trades classified as buys over the past 12 months.
How does the transaction price relate to current market pricing?
Shares were sold at an average price of $163.55, approximately 0.5% below the $164.36 closing price as of July 21, 2025, indicating the sale occurred at a slight discount to the latest market price.
What is the context of this transaction in relation to Johnson & Johnson’s recent performance?
Johnson & Johnson shares delivered 8% total return in one year as of the transaction reporting date. The company maintains a large market capitalization and leadership in the healthcare sector, suggesting the sale does not coincide with pronounced negative price momentum.
Company overview
| Metric | Value |
|---|---|
| Market capitalization | $417.4 billion |
| Revenue (TTM) | $90.6 billion |
| Net income (TTM) | $22.7 billion |
| Dividend yield | 3.0% |
Data as of August 8, 2025.
Company snapshot
- Johnson & Johnson generates revenue through two segments: innovative medicine (pharma) and medtech (medical devices).
- The company operates a diversified business model focused on research, development, manufacturing, and global distribution of healthcare products, with a balanced mix of prescription medicines and medical devices.
- Johnson & Johnson is a Dividend King, having increased its dividend for over 60 consecutive years.
Foolish take
Once known primarily for its consumer health brands such as Tylenol and Listerine, Johnson & Johnson made a major strategic move in 2023 when it spun off its consumer health business into a separate publicly-listed company, Kenvue. J&J is now a healthcare behemoth, with two diversified businesses that cover two of the most important areas of healthcare.
Its innovative medicine segment focuses on oncology, immunology, and neuroscience, owns top medicine brands like Darzalex, Stelara, and Imbruvica, and accounted for 64% of J&J's total sales in fiscal 2024. Medtech, meanwhile, makes medical equipment and technologies for cardiology, surgery, and vision. Between the two businesses, J&J owns 26 products or platforms generating over $1 billion in annual sales each.
Despite Stelara's loss of exclusivity, J&J continues to deliver. In its second quarter, J&J reported 5.8% growth in net sales. In innovative medicine, oncology continues to grow at a steady pace, while Spravato is growing rapidly. Sales from Spravato, a nasal spray for treatment-resistant depression in adults, jumped 53% in Q2.
Strong Q2 performance and progress in new product pipeline even encouraged J&J management to boost its full-year guidance. It now expects operational sales (sales excluding the impact of currency) to grow by 4.8% at the midpoint versus its previous forecast of 3.8% and adjusted earnings per share by 8.7% at the midpoint versus 6.2%. I believe investors shouldn't read much into insider sales like Reed's transaction, and continue to buy and hold this magnificent dividend stock.
Glossary
Form 4: A required SEC filing disclosing insider trades by company officers, directors, or major shareholders.
Open market sale: The sale of securities on a public exchange, rather than through private transactions or company programs.
Insider trading activity: Buying or selling a company’s stock by its executives, directors, or employees with access to nonpublic information.
Median transaction size: The middle value of all transaction sizes, used to measure typical trade volume for an individual.
Total return: The investment's price change plus all dividends and distributions, assuming those payouts are reinvested.
Dividend yield: Annual dividend payments divided by the stock's current price, shown as a percentage.
TTM: The 12-month period ending with the most recent quarterly report.
Market capitalization: The total market value of a company's outstanding shares.
Pharmaceuticals: Prescription drugs and medicines developed, manufactured, and sold by healthcare companies.
Medtech: Medical technology products, including devices and equipment used in healthcare settings.
