Johnson & Johnson is the biggest healthcare company in the world; it makes everything from consumer products like Band-Aid brand bandages to pharmaceuticals and medical devices. While patent loss concerns on JNJ's pharma unit contribute some to the negative sentiment in this stock, they don't account for the pile of short sellers that's currently positioned in shares. That's especially true now that the Synthes acquisition is closed, boosting JNJ's medical device business.
Financially, they don't get much better than JNJ. The firm's positive net cash position is attractive, and it's understated because of the mountain of cash that Johnson & Johnson parted with as part of the Synthes deal. In reality, JNJ's cash generation capabilities are impressive, and they should continue to fuel the firm's 3.43% dividend yield for the foreseeable future. Late January earnings could be a big catalyst for a short squeeze.
Colombian oil and gas company Ecopetrol (EC) is another large-cap name that's getting hated by investors right now. The Bogota-based firm is a $120 billion is the biggest energy company in Colombia, generating around 70% of the country's output. And with a 90% stake held by the country's government, that market-leading position isn't likely to get ceded any time soon.Ecopetrol is a vertically-integrated oil and gas firm, with operations ranging from exploration and production to refining and transportation. That integration helps keep EC's profitability numbers strong -- and crude oil prices resting near historic highs for sustained periods don't hurt either. That said, exposure to the volatile Colombian Peso doesn't help investors' love affair with this stock, particularly given the strong performance of the U.S. dollar in recent years. In 2007, Ecopetrol made the move from being a part of the government to being a self-run corporation whose largest shareholder just happened to be the government. While that separation has helped increase investors' willingness to buy stakes in EC, it's important for investors to remember that the powers-that-be in Bogota still have the reins of this firm. Even so, the sheer size of Ecopetrol makes maximizing profitability strategically important -- and puts investors and the Colombian government on the same side. A short interest ratio of 20.2 means that it would take more than a month of buying pressure for short sellers to cover their positions at current volume levels.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Jim Cramer + 20 Wall Street pros
- Intraday commentary & news
- Real-time trading forum
- Actionable trade ideas
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV