Just when you thought it was safe to come back to the drugstore after Johnson & Johnson's
This one doesn't seem quite as bad as many of the others. There are no musty odors. The drug inside doesn't seem to have anything wrong with it.
Instead, Johnson & Johnson is recalling 9.3 million bottles of three Tylenol Cold Multi-Symptom products because the labels on the front of the bottles don't note that the contents contain alcohol.
We're talking about less than 1% of the contents being alcohol. That's under two proof, for those wondering if this could actually get you drunk.
In fact, there's nothing really the matter, except that Johnson & Johnson realized it should make sure customers know that there's a teensy weensy bit of alcohol in the bottle. From an investors' standpoint, there's two ways to think about this; neither is all that appealing.
One possibility is that the notice is really necessary, and Johnson & Johnson could get in big trouble with the Food and Drug Administration if it isn't on the label. In that case, one has to wonder how the labels got this far through quality control without anyone noticing.
Or Johnson & Johnson could just be overreacting to its quality-control issues. Sure, it would be nice for customers to have the information on the front of the bottle, but it's on the outside package and the back of the bottle. Given its quality-control issues, Johnson & Johnson might be a little overly cautious at this point.
Either way, it seems that the recall just adds fuel to the fire, which helps companies such as Perrigo
Johnson & Johnson is a good company, and I'm sure it'll be able to turn itself around eventually. But until the recalls end, investors should proceed with caution.
Alex Dumortier thinks irrational exuberance is back.
Motley Fool Options has recommended a diagonal call position on Johnson & Johnson, which is a Motley Fool Income Investor recommendation. Pfizer is a Motley Fool Inside Value recommendation. The Fool owns shares of and has written covered calls on GlaxoSmithKline, which is a Motley Fool Global Gains pick. The Fool owns shares of Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.