Shortly after the opening bell, we will be buying 50 shares of Johnson & Johnson (JNJ) at roughly $161.81 apiece. Following Tuesday’s trades, Jim Cramer’s Charitable Trust will own 555 shares of Johnson & Johnson, increasing its weighting in the portfolio to about 3.06% from 2.78%. Shares of Johnson & Johnson were hit hard Monday after a federal appeals court rejected the company’s bankruptcy strategy for tens of thousands of lawsuits related to the company’s talc-based baby powder. J & J stock closed down 3.7% Monday, at $162 a share. And the company lost roughly $16 billion in market capitalization in a single day, a clear market overreaction. In the over five years of litigation to date, aggregate costs have reached $4.5 billion which is less than 7.5% of the $61.5 billion on the petition date. About half of those costs were attributed to one case. Johnson & Johnson has won the majority of talc cases brought against it since these lawsuits began. Johnson & Johnson has won the majority of talc cases brought against it since these lawsuits began. Through 41 trials so far, only nine trials were won by plaintiffs and are on appeal or resolved. J & J’s talc litigation is far from over but the situation is containable, particularly given J & J’s pristine balance sheet. It is highly unlikely J & J will face an incremental $16 billion in losses, equivalent to the market cap it lost yesterday — which is why we see this as a buying opportunity. Separately, Caterpillar shares are down roughly 1% in premarket trading after the industrial firm reported a drop in profit in the fourth quarter . But the numbers look strong, with sales up 20% year-over-year, to $16.6 billion, beating analysts’ estimates of about $16 billion. Margins were excellent as well, expanding to 16.9% against expectations of 16.3%, with beats in all three segments due to a 13.2% increase in pricing that more than offset manufacturing costs. Although no specific earnings guidance was provided,…
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