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Why Johnson & Johnson May Beat Estimates Tomorrow


Company has done it last four quarters straight.

Another awesome weekend. We went to my oldest's soccer tournament, went for a couple of bike rides, and played tons of soccer in the backyard. Now it's back to the grind.

Asian stocks were lower overnight. The Heng Seng was off 0.93%. The Nikkei was closed on holiday. However, European stocks were in positive territory early this morning. And here in the US, we're currently trading higher.

Here's what I'm focused on this morning:

Johnson & Johnson (JNJ):
I'm keeping an eye peeled on J&J, which is scheduled to release its numbers tomorrow.

While I'm not expecting some blockbuster quarter, the company is expected to put up $1.13, and I think it will come in north of that number by a penny or more. That said, I'm hoping in the release or conference call that management will be talking about what it's going to do to goose its top line. I think that's what many an investor will be looking for.

Some positives about the company:

1. Whip out the Band-Aids because it's been pummeling estimates for the last four quarters straight.

2. Not that it's a gigantic amount, but I did see that an insider bellied up to the bar and bought 1,000 shares back in August at the $60 level. It's nice to know I can hop in at around the same general level.

3. At only 13.7 times this year's estimate, I think it's cheap and that the shares have plenty of legs left. I'm thinking a new 52-week high within the next couple of months.

For my last take on J&J click here.

Aeropostale (ARO):
The retailer's same-store sales were up a hefty 19% in September and that beat the pants off of Street expectations. But that doesn't mean I think the shares are worth taking into the fitting room.

Here's why:

1. The sentiment seems to be turning a bit. Piper Jaffray recently cut the company (see Justin Sharon's recent column) and so did Goldman.

2. While the same-store numbers were great, can it keep that ball rolling? The bar has been set pretty high for the future and I'm not sure it will be able to keep clearing it.

3. There are many other retail plays out there that look more interesting to me -- Gap (GPS) for example, which has some legs to it.
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No positions in stocks mentioned.

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