Buying Tylenol Stock.

Should you buy Tylenol stock after

Donald Trump encouraged labels on

Tylenol encouraging pregnant women not

to take the drug to flee from Tylenol

because of a possible association

between autism in children and the use

of acetaminophen the primary ingredient

in Tylenol. Now Tylenol was spun off

from Johnson and Johnson is now run or

owned and manufactured by a company

called Kenvue. We're going to talk about

Ken Vue and Ken View stock. It spun off

in 2023.

Uh and they are down 33%

all time. Uh and as soon as Trump got

into office, uh we could see the stock

is down from about the election over

here. Stock's down about 22% since Trump

got in office. Uh and then just in about

the last month, we're down about 11 or

17% uh with uh with with some uh even 3%

in the last five days here of down here.

You can see that Trump announcement hit

although we are rebounding a little bit

today. So what is this stock? Should you

buy this stock? First thing a lot of

people pay attention to is they do pay

out dividends. They got a 4.7%

dividend, which sounds great to get a

nice nearly 4.7 or nearly 5% yield on

your money, but the company lost 17%

this year in stock value. So, are you

really winning? You're still net down 12

or 13%. So, the question has to do with

the company's, in my opinion, valuation

and the actual reality around Tylenol.

Look, here's the thing. Bottom line,

Tylenol uh has been associated with

use over time reducing certain

antioxidant that could protect the brain

from antioxidative stress. This is uh

glutathione depletion is what people

refer to. However, in normal doses, you

usually don't see a link here. But if

you use it regularly, people are saying

ah there is a mechanism where you could

actually cause stress to the brain of

maybe the mother or the child. And this

is where people are linking Tylenol to

autism. Now when we actually look at

results,

Harvard reviewed 46 studies about this

and found 27 of the studies found a link

between acettophen and autism. Nine

found no link and four found that

acetammenophen use actually helped

prevent autism. Okay. Now the problem

with this is a link between acetamophen

and autism does not mean that the

acetaminophen caused autism. See a link

means they occurred at the same time. In

fact, there was a study that reviewed uh

a few million patients uh between 1995

to 2019 and found that of those 1.4% 4%

of children who had autism did have

acetaminophen taken by their mother

during pregnancy compared to excuse me

an incident rate of 1.33% autism for

those without acetaminophen suggesting

yeah there was a little bit of an

increase in the amount of autism in uh

children or in pregnancies where

acetammenophen or talenol was taken. Now

this is where it's really important to

understand the difference between a link

and a causal relationship. So a link

means two things happen at the same

time. Like for example, everyone who got

shot with a 90% of people who get shot

with a gun bleed.

Okay? So the like bleeding and gunshot

wounds tend to go hand in hand. Now in

this case we could make the argument

that the gunshot wound caused the

bleeding but when it comes to

acetamophen we can't say that

acetaminophen caused the autism and

that's because there could be other

things that caused the acetaminophen. So

for example let's say you you shoot a

gun a lot in your life and then you have

lead poisoning. Okay. Well maybe you ate

lead paint when you were a child. uh and

it doesn't have to do with you going to

the shooting range a lot. Right? So

that's where it's unclear that just

because they both happened at the same

time, one caused the other. So point of

this is people who take acetamophen

usually take it because they have a

problem. They have pain, they have a

fever, they've got, you know, something

that they're trying to solve. Remember,

usually we use ibuprofen as an

anti-inflammatory. And acetaminophen

works more on the brain. It more blocks

your pain receptors than reducing

inflammation. That's why you generally

see a difference between ibuprofen and

acetamophen. And it's also why people

say if you have a lot of pain, you could

actually double up. I'm not a doctor.

Talk to your doctor. But you could

double up acetto and ibuprofen because

they're acting in different ways on your

body to help reduce pain. It's an

interesting argument. That's it. Acetto

medicine made by this company uh is is

not conclusively associated with autism.

But the make America healthy movement

and sort of the antivax community are

jumping on this oxidative stress

linkage. Uh and then the fact that the

there is a higher incidence of children

who had autism where their mothers were

taking acettophen. Again that 1995 to

2019 study where people like aha it's

hyalonol that's bad. And other people

are like, "No, it could be because they

were sick and that's what led to the

people don't really know." But the point

is, do you buy the dip on the stock?

Okay, so here's the actual company. So

the financials of the company because,

you know, this is the same thing we do

in the course member live streams pretty

regularly. We love doing fundamental

analysis because uh well, as you've

heard CNBC say,

>> Kevin is much more interested than most

people, by the way, in the balance

sheet. We we love the balance sheets. We

love looking at assets.

Take a look at this. We've got about um

$33

billion in cash and receivables. We have

current liabilities or bills to pay of

$5.9 billion. That means we have $2 of

bills to pay for every dollar of assets

we have. That's not great. We have $3

billion of more bills to pay than we

have money for. Our cash flow is about

$800 million. And this $800 million is

in 6 months. So in fairness, it would

take about $1.9 years to catch up just

using free cash flow to pay their

current debts that they have in current

liabilities. On top of that, they've got

another $7 billion in debts, which would

take somewhere around eight years to pay

off. The thing is they're not really

worried about repaying just their debts.

Although they are see repayment of

senior notes, they paid off 750 mil, but

they don't really care about that

because they just turned around and

borrowed basically the same amount

again. And the reason they're borrowing

is to make sure that you can get your

delicious dividend payment. So they're

basically borrowing money to pay

dividends. So they're kind of, in my

opinion, cing out the business. Like I

don't think this is great financial

management that is paying dividends

while you don't even have enough money

to pay your bills. Me as somebody that

does analysis on a daily basis on

companies, I don't personally like

seeing that. Uh it's something that's a

red flag to me when we do our course

member uh analysis and our alpha reports

in the mornings. We do that every day

before the market opens up. You can get

that over at me.com. So what you see

here is that this company has a gross

profit of 59% net income of 10.9%. That

means for every 10 bucks they they sell

you stuff for they make about a buck

roughly. Okay. Now this comes from the

annual report. So I wrote some notes

here. Okay. Uh and when you go to the

annual report you'll see that Tylenol

sits in a category that makes up about

39% of the business. However, that

category includes Benadryil, Zerek,

Motrin, Nicaret, and Rhinocort along

with some other junk. So realistically,

you've only got 12.9% of earnings per

share. Maybe if Tylenol represents a

third of self-care that that comes from

Tylenol. So maybe out of every dollar

they make, 12 cents comes from Tylenol.

On top of that, only half of 1% of

people are actually pregnant at any

given time. However, the negative

publicity and the brand damage could

lead sales to decline some more. So,

let's assume that their growth rate

doesn't move at all for a moment. Are

they selling for a discount? No. In my

opinion, at a 2.83 peg, they're roughly

fairly valued where they are right now.

So, if they're fairly valued where they

are right now, and we haven't accounted

for even maybe a 1% decline in growth

because of the Trump brand damage to the

product, that's just going to make them

seem even more overvalued. and they're

basically cing out the business to pay

out dividends. I don't actually think

you've got a really great business here.

So, for me, it's not a stock I'm

interested in. Even though I don't

really believe that there's this massive

dramatic link between uh acetame like

it's not like there's a smoking gun

that's like, "Aha, Tylenol is causing

autism. We have finally found you." I I

I don't see that at all here. Uh, again,

I see those light links. I get it. I can

see where the argument is coming from.

Uh, but it's not enough for me to say,

"Oh my gosh, never touch Tylenol." Uh, I

mean, I'm I'm a big fan of generally not

taking I'm not a supplement person. I

generally I I rarely take painkillers. I

take maybe maybe

out of a year, maybe one or two days a

year, I'll take a painkiller, right?

Knock on wood. I'm grateful for that.

Obviously, everybody's got a different

health situation. So, I I just want to

point out like if we're in that

situation, be grateful. that is a great

position to be in uh and and preserve

it, keep yourself healthy. Uh that said,

yeah, I mean, look, obviously, you know,

drugs during pregnancies, nobody knows,

right? But again, you know, is this a

stock to buy?

I don't know. Maybe it's more of a swing

on short-term drama over brand damage

from from uh uh you know, Trumpian

concerns than anything. But it's a tough

one to play. It's not one for me. I'm

out. comment says, "Kevin, you missed

the lawsuits the company might get." You

know, you also missed the lawsuits that

Donald Trump might get, right? Like

Donald Trump targeting this brand. The

brand theoretically could argue that

Donald Trump defamed the brand and win

some massive damage award based on

potentially declining sales. So, I think

the legal stuff sort of like goes plus

and minus there. I don't really weigh

that out mostly because the legal stuff

is going to take years to work out. Uh,

and it'll go both ways. Uh, now in

fairness, judges have been favoring

Trump lately. So, it is also possible

you lose on a defamation and you lose on

the brand sales and then other companies

or other people get together as like a

class action and sue uh Ken View for

potential, you know, autism and their

children.

Yeah. I mean, that's called bio for you.

You know, you're always going to have

litigation risk in bio, man. That's

because uh bio is so hard. You know, the

human body is so complicated. You know,

for so long people like, "Oh my gosh,

don't eat eggs. They cause cholesterol

uh to your cholesterol to go up." And

that's only because, you know, there's

dietary cholesterol in eggs. So, people

are like, "Oh, well, if there's dietary

cholesterol and eggs, that must mean my

blood cholesterol goes up." Yes and no.

Shortterm, if you eat dietary

cholesterol, yes, your blood cholesterol

goes up, but it's super short term.

longer term, eating eggs can actually

contribute your to your cholesterol

going down because it's a healthy food.

And there's no link between dietary

cholesterol and long-term blood

cholesterol. There's more of a link

between an a heavy amount of saturated

fats, which eggs do have as well, but a

heavy amount of saturated fats more so

from like red meats and high cholesterol

or trans fats from French fries than

there is between eggs and high

cholesterol. So like bio is is just so

overwhelming. I I mean I love it. Don't

get me wrong. I love it. But not enough

to invest in any kind of stock related

about this.

>> We'll we'll try a little advertising and

see how it goes. Congratulations, man.

You have done so much. People love you.

People look up to you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.