Sunday, December 21, 2014

Warren Buffett's letter to shareholders leaves out Johnson & Johnson

Warren Buffett continues to be sour on health-care giant Johnson & Johnson. One of the world's greatest investors, Buffett released his annual letter to shareholders of Berkshire Hathaway Friday night and it shows that Berkshire, as of Dec. 31, 2012, had dropped its holdings of J&J stock to below $1 billion for the first time since the end of 2005.

Warren Buffett's letter to shareholders leaves out Johnson & Johnson

Billionaire Warren Buffett said Monday that Berkshire Hathaway may sell its stake in Johnson & Johnson. (Shuji Kajiyama / Associated Press)
Billionaire Warren Buffett said Monday that Berkshire Hathaway may sell its stake in Johnson & Johnson. (Shuji Kajiyama / Associated Press)

Warren Buffett continues to be sour on health-care giant Johnson & Johnson.

One of the world's greatest investors, Buffett released his annual letter to shareholders of Berkshire Hathaway Friday night and it shows that Berkshire, as of Dec. 31, 2012, had dropped its holdings of J&J stock to below $1 billion for the first time since the end of 2005.

The latest letter, which recaps events of 2012, has a table with all of the stocks that Berkshire holds that amount to more than $1 billion and J&J didn't make the list.

A year earlier, Berkshire held 45,022,563 shares or 1. 6 percent of Johnson & Johnson, according to Buffett's letter re-capping 2011.

Buffett is scheduled to appear on CNBC's Squawk Box Monday morning between 6 a.m. and 9 a.m. EST.

CNBC is encouraging viewers to email questions to Buffett at AskWarren@ cnbc.com or by Twitter with the hashtag #askwarren.

Buffett was disappointed overall with how his company did in 2012. The book value of Berkshire increased 14.4 percent, which was less than the 16 percent in crease for the S&P 500.

A link to the latest (2012) letter is here. A link to the 10-Q filed with the Securties and Exchange Commission is here.

A link to the 2011 letter is here.

When Buffett discussed his annual letter with CNBC's Becky Quick a year ago, he was critical of J&J.

The company, Buffett said then, "obviously messed up in a lot of ways in the last few years."

A link the PhillyPharma post on that is here.

Multiple divisions with the far-flung company have had recall dozens of products and face lawsuits from patients. The company has said that it expects a federal investigation into its marketing practices might lead to a fine of more than $2 billion.

Buffett said then that if he needed to sell stock to raise money for an acquisition, J&J stock might be one he would sell and that is what happened.

In August of 2012, Berkshire indicated in its second-quarter filing with the Securities and Exchange Commission said it dropped its J&J holdings from 29 million shares to 10.3 million. A link to the PhillyPharma post on that is here.

"They have some wonderful products and a wonderful balance sheet, but too many mistakes have been made at Johnson & Johnson," Buffett said on CNBC last year after the release of his letter "Clearly, they have not lived up to their standards."

David Sell
About this blog
David Sell blogs about the region's pharmaceutical industry. Follow him on Facebook.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section.

Reach David at dsell@phillynews.com.

David Sell
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