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Buffett smells opportunity in Tylenol mis-manufacturing
Apparently GMP violations have an odor detectable by high-stakes investors as well as the FDA. Warren Buffet is taking his eye off of Genzyme CEO Henri Termeer for the moment and casting it toward Johnson & Johnson and Bill Weldon.
Berkshire Hathaway has upped its stake in J&J by about 18 million shares. The move fits the Buffet "investment thesis," reports TheStreet: The stock price is depressed, off about $20 per share, trading at about $59 on Tuesday.
A Morningstar analyst attributes the weakness to the recent black eye the company is suffering from the Tylenol recalls. Still, the OTC business is just one percent of J&J sales. The impact is expected be short term and likely to be corrected within two years, according to the article. Perhaps not all analysts are aware of the pace in a GMP-violation comeback.
Termeer of Genzyme just recently made a peace of sorts with Buffett, but only after some board changes appeased him.
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