Johnson & Johnson May Offload Its Orthopedics Unit for $20 Billion -- and Investors Shouldn't Miss What That Could Signal
Healthcare giant Johnson & Johnson is looking to become a more profitable and faster-growing business.
Overview
Wall Street goes through cycles in which companies buy assets to create diversified conglomerates, and then sell assets to streamline and focus. Right now, investors are rewarding companies for simplifying their operations and focusing their businesses. That's what Johnson & Johnson (NYSE: JNJ) has been doing. Here's what's been happening, why it's happening, and what it could mean for investors.
For many years, Johnson & Johnson was one of the most diversified healthcare companies an investor could own. Its business spanned over-the-counter consumer products, medical devices, and pharmaceuticals. The problem is that all of its divisions had very different business profiles. Diversification is something many investors cherish, but it can lead to slower decision-making and obscure the strong performance of faster-growing divisions.
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Originally published at www.fool.com.