BCV Bulletin - Recent Trading Activity - April 9, 2025
Sell: Johnson & Johnson (NYSE: JNJ)
BCV exited its position in Johnson & Johnson (JNJ). While JNJ has undertaken significant strategic actions recently to focus on its medical technology and pharmaceutical businesses, fundamental performance has been mixed, with the medical technology segment notably losing market share. Compounding these operational challenges is the ongoing uncertainty surrounding Talc litigation, which has persisted for over a decade. A recent attempt to resolve these matters via bankruptcy was rejected by the Houston Bankruptcy Court, meaning JNJ now faces the prospect of litigating over 90,000 individual cases through the tort system – a potentially costly and lengthy process that clouds visibility. Given these factors, alongside disappointing segment results, we believe capital can be better deployed in prospects offering similar defensive qualities with significantly less uncertainty.
Buy: AbbVie Inc. (NYSE: ABBV)
With proceeds from the sale of Johnson & Johnson, BCV increased its position in AbbVie Inc. (ABBV), a global biopharmaceutical company focused on advanced therapies for complex diseases. Our initial investment thesis centered on ABBV’s successful strategic shift beyond its legacy blockbuster, Humira, primarily through the strong growth of newer treatments Skyrizi and Rinvoq which were expected to surpass Humira’s peak sales. We remain attracted to ABBV’s consistent operational execution, robust free cash flow generation, commitment to shareholder returns via dividends, and its promising drug pipeline. Furthermore, this company has increased its dividend for 11 consecutive years. We believe ABBV offers defensive characteristics that are particularly valuable given recent market volatility. Investing in ABBV provides exposure to a leading biopharma company with a resilient earnings profile, attractive growth prospects, and a healthy 3.2% dividend yield.
Buy: Danaher Corporation (NYSE: DHR)
Additionally, BCV initiated a position in Danaher Corporation (DHR), a crucial partner to the global pharmaceutical industry, providing essential technologies across the drug discovery, development, and manufacturing continuum via its Life Sciences, Biotechnology, and Diagnostics segments. This business aligns well with BCV's philosophy, as DHR is a large-cap, blue-chip leader with a successful operating history spanning over 40 years. We believe DHR currently trades at an attractive valuation, supported by our intrinsic analysis and its historically high free cash flow yields. The company exhibits a strong track record and future potential for robust earnings and dividend growth, backed by an A-rated balance sheet with low leverage, along with its role in critical and growing healthcare markets, strong financial health, and proven operating model.
This BCV Bulletin is intended for residents of the provinces and territories in which we are registered, is not meant to be a solicitation to any persons not resident in those jurisdictions and does not constitute an offer to buy or sell our products or services. Any opinions expressed are just that and are subject to change. Information is provided on a best-effort basis and its accuracy cannot be guaranteed. Information may also be provided from third party sources which are believed to be reliable, but we do not guarantee its accuracy or completeness. Certain statements may contain forward-looking statements, which involve known and unknown risk, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. This BCV Bulletin has been prepared for general informational purposes only, is not intended as investment and/or financial advice on any subject matter and the securities mentioned should not be construed as a recommendation for any specific securities. ©BCV Asset Management Inc. 2025.
