After its slide in the current century, Johnson & Johnson took the opportunity to reinvigorate itself. Alex Gorsky, who became CEO in 2012, led a major transformation; he charged his new operations head, Sandra Peterson, with structural improvements across the company. On the pharmaceutical side, it refocused its Research & Development (R&D) on blockbuster segments such as anti-coagulants and oncology. In its medical technology division, the company boldly exited the underperforming drug-eluding stent business and deployed foreign cash through the acquisition of high-margin specialty implant maker Synthes, a Swiss company. Johnson & Johnson even bolstered its consumer brands such as Neutrogena and Band-Aid, which offer lower margins but steady cash flows. More importantly, it has gotten past the embarrassing 2010 recalls of the children's versions of Tylenol, Motrin, Zyrtec and Benadryl, and all four are now back on the shelves. We always look forward, even when analyzing a 127-year old company, and at this point see a lean, mean heavyweight ready to compete.
From John Rogers (Trades, Portfolio)' Ariel International Fund & Ariel Global Fund fourth quarter 2013 commentary by Rupal J. Bhansali.