This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Professor Buffett's Health Care Trade

NEW YORK ( TheStreet) -- Warren Buffett cut through the fog of uncertainty surrounding the health care sector and increased his stake in the sector by buying Becton, Dickinson (BDX - Get Report) and Johnson & Johnson (JNJ - Get Report).

An Aug. 14 regulatory filing revealed that Buffett's Berkshire Hathaway (BRK-A) had 1.2 million shares of BDX at the end of the second quarter, and had increased its position in JNJ.

Health care reform, a key issue for President Obama, has sputtered to a virtual standstill. The prospect of new legislation has bullied the healthcare sector since before election day, sending everything from healthcare providers to pharmaceuticals on a wild ride. The debate has caught fire in the last few months, and the smoke has obscured significant recovery in healthcare stocks.

It's been a rocky road for Buffett's 1.2 million shares of BDX and 36.9 million shares of JNJ. BDX, which climbed 6.1 percent in the three months ended June 30 to $71.31, settled to $69.83 as of yesterday's close. JNJ has also climbed steadily upward in 2009.

The first commandment of Buffett investing, however, is to buy solid companies at fair prices, and not get mired down in short-term fluctuations. The recent voices in the health care debate have reached a roar, and it is tempting for investors to put their hands over their ears and keep their heads down.

The stark reality, however, which Buffett has keenly grasped, is that America is aging. As baby boomers reach retirement and old age, their numbers will affect nearly every sector in the economy. No matter what packaging healthcare assumes, it is certain that we will need more of it.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IBB $267.95 -2.66%
PPH $58.24 -0.90%
BDX $161.26 -0.41%
JNJ $112.08 -0.36%
UNH $131.68 -0.30%


Chart of I:DJI
DOW 17,773.64 -57.12 -0.32%
S&P 500 2,065.30 -10.51 -0.51%
NASDAQ 4,775.3580 -29.9330 -0.62%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs