Based on the aggregated intelligence of 130,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, baby formula maker Mead Johnson Nutrition (NYSE:MJN), which recently went public as a partial spinoff from parent Bristol-Myers Squibb (NYSE:BMY), has received a distressing two-star ranking.

With that in mind, let's take a closer look at Mead Johnson's business and see what CAPS investors are saying about the stock right now.

Mead Johnson facts

Headquarters (founded)

Evansville, Ind. (1905)

Market Cap

$5.42 billion


Personal Products

Trailing-12-Month Revenue

$2.88 billion


CEO Stephen Golsby (since 2008)

CFO Peter Leemputte (since 2008)

Long Term Debt/Capital



Abbott Labs

Wyeth (NYSE:WYE)

Church & Dwight (NYSE:CHD)

CAPS members bearish on MJN also bearish on

Grand Canyon Education

CAPS members bullish on MJN also bullish on

Johnson & Johnson (NYSE:JNJ)

General Electric (NYSE:GE)


Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS.

Over on CAPS, 12 of the 32 members who have rated Mead Johnson -- some 37.5% -- believe the stock will underperform the S&P 500 going forward. These bears include my Foolish colleagues Brian Orelli (TMFBiologyFool) and Rich Smith (TMFDitty), both of whom are ranked in the top 2% of our community.

In February, Brian wrote that the recent IPO was a tad too hot for his liking: "A good move for [Bristol-Myers], but a little overpriced for now even if babies do have to eat during recessions."

In a pitch from the same day, Rich also concludes that having this baby is just way too expensive:

Taking a first cut at the new IPO, I get 30 million shares x a $26.40 share price = $790 million initial float. [Bristol-Myers] is keeping 85% of the company, so call the total market cap 7x that, or $5.5 billion. Tack on $2 billion in debt, and we've got us here a $7.5 billion company with roughly $380 million in trailing free cash flow -- so an EV/FCF of 20.

I'd want to see the company growing at 20%-plus to justify that price. But according to Capital IQ, its actual profits growth rate over the last three years has been something closer to 5%. In short, I'll pass.

What do you think about Mead Johnson, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 130,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Johnson & Johnson is a Motley Fool Income Investor pick. Google is a recommendation of Rule Breakers. The Fool's disclosure policy always gets a perfect score.