NEW YORK (TheStreet) -- Jim Cramer's Action Alerts PLUS charitable trust portfolio is once again investing in Johnson & Johnson (JNJ) - Get Report. The portfolio bought J&J Tuesday. Cramer likes the company in particular for the pipeline opportunities J&J recently revealed at its analyst day.
Cramer said J&J has 10 early-stage drugs in its pipeline with more than $1 billion in sales potential, which is part of what gave Cramer and AAP Director of Research Jack Mohr the confidence Johnson & Johnson will be able to grow faster than the industry over both the near and long term.
Cramer also stressed the great job that Johnson & Johnson Chief Executive Alex Gorsky is doing. He says Gorsky has a great vision and past problems of consumer product recalls are finally behind him. In order to fund the new position in Johnson & Johnson, Cramer said he is exiting his position in Merck (MRK) - Get Report.
Cramer said he was hoping Merck would be more open about an Alzheimer's drug it has up its sleeve, and the company's failure to do so has made him a bit nervous. Still, the exit of the Merck position is less about losing confidence in the company fundamentally and more about seeing considerably more growth and potential upside in Johnson & Johnson.
Cramer warns to beware a strong dollar in Johnson & Johnson, which is not good for the company, although he believes most people have the effect from that already priced in. Plus, Johnson & Johnson has the ability in its balance sheet to buy pretty much any company that it may want, according to Cramer, so an acquisition may be on the horizon. He says the stock has done little for a very long time and he sees it potentially going to $120 from here.
TheStreet Ratings team rates JOHNSON & JOHNSON as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate JOHNSON & JOHNSON (JNJ) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity, reasonable valuation levels, expanding profit margins and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
You can view the full analysis from the report here: JNJ Ratings Report
At the time of publication, Jim Cramer's charitable trust Action Alerts PLUS held a position in JNJ.