As a $167 billion company, it's no surprise that there's plenty of retail and institutional interest in health-care conglomerate Johnson & Johnson
As it turns out, the view is bullish. Let's have a look at a few of the key sentiment drivers.
1. Analyst opinion
Analysts are lukewarm on Johnson & Johnson. Data from Yahoo! Finance captures their collective feeling:
Analysts are notoriously hesitant to give out sell or strong sell ratings, so it's no surprise that J&J has no detractors. But the sentiment overall is neutral-leaning-bullish: Most analysts (11) are a "hold," with a good mixture of bullishness in the form of 13 buys or strong buys.
2. Insider buying
The insider buy/sell picture is less bullish. Over the past year, J&J insiders have sold $33 million worth of their company stock. During the same time period, insiders bought a total of $248,070 worth of Johnson & Johnson stock, according to Form4Oracle. While these sums aren't large relative to the company's market cap, and while insiders sell stocks for a whole host of reasons, the trend isn't positive: Insider selling far outweighs insider buying.
3. Guru buying
Next, we'll look at "guru" ownership of the stock. According to GuruFocus, gurus lean positive toward Johnson & Johnson. Noted fund manager Don Yacktman owns a large stake, and even added to it in the most recent quarter. In the quarter ended Sept. 30, Yacktman, Warren Buffett, Whitney Tilson, and John Hussman all added to their J&J stake, while only George Soros, Arnold Van Den Berg and Ruane Cunniff decreased their stakes.
I'll classify the overall guru trend as bullish.
4. Retail investor community sentiment
For retail investor community sentiment, I turn to Motley Fool CAPS, our proprietary stock rating system. CAPS generates ratings on a one- to five-star scale, with five stars as the highest ranking, indicating that the Fool community believes in a stock's future. Johnson & Johnson has the second highest rating: four stars.
Next we'll look at whether short-sellers are circling the stock. There are 27.9 million J&J shares sold short, according to Capital IQ. As a percentage of shares outstanding, that's a short interest of 1%. That's not very high -- a struggling operator like Barnes & Noble has a short interest of 13.5% right now -- and so for determining sentiment, we'll take it as a good sign.
6. Does Buffett own it?
This is the "cherry on top" test, and in J&J's case, it's a yes: Berkshire Hathaway does own shares. In fact, Berkshire is the fourth-largest shareholder of J&J.
Adding it up
Johnson & Johnson is generally liked by gurus, Buffett, and the CAPS community, and short-sellers aren't betting against the stock in a significant way. Analysts are bullish-to-neutral on the stock, even though insiders are net sellers. Add it all up and J&J comes out with a "bullish" consensus sentiment.
Of course, you can't base an investment philosophy on who likes the stock you like, and a consensus opinion can sometimes be a scary thing. Quoting Buffett: "A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful." There's hardly a "greedy" sense surrounding J&J right now, though.
The purpose of this series of articles isn't to make a definitive buy-or-sell call on Johnson & Johnson. Rather, by looking at a stock's sentiment, the goal is to help you place your own opinion of it in a broader context.
One final thing: If you want to keep tabs on J&J's movements, and for more analysis on J&J, make sure you add it to your Watchlist.
Fool.com managing editor Brian Richards doesn't own shares of any companies mentioned. Berkshire Hathaway is a Motley Fool Inside Value recommendation and a Motley Fool Stock Advisor pick. Johnson & Johnson is a Motley Fool Income Investor selection. Motley Fool Options has recommended a diagonal call position on Johnson & Johnson. The Fool owns shares of Berkshire Hathaway and Johnson & Johnson. Motley Fool Alpha owns shares of Johnson & Johnson. The Fool has a disclosure policy.