Johnson & Johnson (NYSE: JNJ) release positive data on its Zytiga medicine showing that the treatment helped high-risk patients.  Zytiga was approved in 2011 and the drug helped patients’ tumors when prostate cancer had not yet metastasized beyond the prostate gland.

What is happening is that Dendreon keeps having lower Provenge sales despite the hope that more reimbursement and more doctor recommendations are supposed to be helping.  This is the second big drop this month after a disappointing revenue figure was shown over a week ago. Analysts have a Thomson Reuters consensus target of just over $367 million in sales in 2012 and just over $513 million in sales in 2013.

Wednesday brought up more questions because the SEC probe may be tied to the company’s dropped sales projections for Provenge in earlier periods when shares were far higher. The reality is that this had been disclosed with earnings over a week ago, but investors are shooting first and asking questions later.

The only good news here for investors is that Dendreon’s stock chart may offer some support not too much lower than the current 10.6% drop to $7.70. Dendreon has four different presentations at ASCO this June and here is a Seeking Alpha transcript of the CFO presentation at a Bank of America Merrill Lynch health conference this week.

At $7.70, Dendreon’s 52-week range is $6.46 to $42.87.  Those old hopes of a Dendreon buyout now feel very dated.

The company’s market cap is now only $1.14 billion and Dendreon has over $500 million in cash and liquidity on hand.  The presentation at a conference this week currently shows no need to raise more capital until the company can reach a breakeven level.

JON C. OGG

Also, keep in mind that portfolio managers Todd Combs and Ted Weschler are still new and those new positions of under $200 million $300 million are likely tied to them.

24/7 Wall St. has gone through line by line of each position to see which stocks have been bought and sold as new positions, as well as having added in whether or not the number of shares grew or shrank on each since the prior quarter. We had added some color in on some of the positions if applicable.

Be advised that the number of subsidiaries that this filing covers is 14 entities rather than 18 entities in the prior quarter. There is also a note in the 13F filing showing that the SEC has granted “Confidential Treatment” on some Berkshire stock holdings and that likely suggests that Buffett is still acquiring a position he does not want the public to know about yet. This filing does not signal the half-dozen or more European shares that Buffett said he bought so that remains an outstanding issue as well.

The value of the stock portfolio was $66,151,587,000 at the end of 2011 and this was listed as $75,300,250,000 at the end of March 2012.

American Express Co. (NYSE: AXP) was over 151.6 million shares, SAME AS last quarter.

Bank of New York Mellon Corp. (NYSE: BK) is now 5.6 million shares, HIGHER THAN the 1,793,915 shares last quarter.

CVS Caremark Corporation (NYSE: CVS) is the SAME SIZE at 7.106 million shares after having been a new holding in a recent quarter and having been raised one quarter ago.

Coca Cola Co. (NYSE: KO) was right at 200 million shares, SAME AS BEFORE.

ConocoPhillips (NYSE: COP) is roughly 29.1 million shares, roughly the SAME AS BEFORE but it is still lower than previous quarters in past reports.

Costco Wholesale (NASDAQ: COST) 4,333,363 Shares, SAME AS last quarter after having lowered it before.

Da Vita Inc. (NYSE: DVA) is now 6 million shares worth $541 million and that LARGER THAN BEFORE after having been a new position of 2.684 million shares.

DirecTV (NASDAQ: DTV) is a LARGER POSITION listed at 22.999 million worth over $1.13 billion. This one had been 20.348 million shares worth $870 million one quarter earlier and it had been a new position just two quarters ago at 4.249 million shares.

Coty wrote to Avon’s board yesterday and said:

We received encouragement from many of your shareholders, research analysts and others in the financial community. Despite this support, your total lack of engagement with us leads us to believe that you remain reluctant to explore a friendly, negotiated combination on a reasonable timetable. Two months is enough. Consequently, as our deadline to begin discussions expired today, our proposal is withdrawn. It is time for Coty Inc. to move on and pursue other opportunities.

Coty went to a great deal of trouble to make the bid. It lined up partners, including Warren Buffett’s Berkshire Hathaway (NYSE: BRK-B), and debt from JP Morgan Securities. Its efforts involved large amounts of management time and Coty’s reputation with the financial world. All the work to reach a deal will not end yet. Avon is too compelling a target, and Coty has too much invested in a successful buyout.

Coty’s best leverage is that, though Avon’s shares raced from $18 to $24 immediately after its bid, those shares certainly will sell back to $18, and perhaps less, as investors despair about Avon’s troubles. These include SEC investigations, slowing sales and several failed restructurings.

Avon might make a case for a quick turn, buts its CEO, Sherilyn S. (Sheri) McCoy, formerly of Johnson & Johnson (NYSE: JNJ), has only just begun her job. The challenges she faces are so complex and the company’s culture so entrenched that bettering Avon’s prospects could take a number of quarters — if they can be bettered at all.

Avon’s board faces a shareholder revolt because of the Coty decision. The board will have to contend with institutional investors who wanted the Coty bid to improve their fortunes. Avon also may have to wrestle with more downgrades of its debt. Each day that passes, it is more a victim of its own long-term failure to find a formula similar to the one that made it a premier retailer for years.

Coty has the Avon board painted into a corner. Coty can afford to wait, but it will not have to wait for long. Avon’s shareholders will quietly beg it to come back. And that will be enough to prompt it to make another offer. Avon should hope the offer is as high as the last one.

Douglas A. McIntyre

People are going to buy Coke and Pepsi, most likely, in almost any economy.  Pepsico, Inc. (NYSE: PEP) is actually up 0.6% at $67.23 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.6% at $76.95 against a 52-week high of $77.82.  With yields of about 3% on average, these pay about the same as the 30-Year Treasury’s long-bond.  The beer segment remains uncorrelated to defensive stocks as it did last week (in part due to currencies): Anheuser-Busch InBev SA (NYSE: BUD) is down by 0.7% at $71.43 and Molson Coors Brewing Company (NYSE: TAP) is down 1.2% at $40.81.  Even the best water utility in America via American Water Works Company, Inc. (NYSE: AWK) is down another 1% $33.99 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive.  You gotta eat, right?  McDonald’s Corporation (NYSE: MCD) is down almost 0.4% at $91.55 and getting further and further away from that $102.22 all-time high recently seen.  The rest of the defensive food segment is up to mixed as food is defensive and with dividends:

• Kraft Foods Inc. (NYSE: KFT) is up 0.4% at $39.20 with a 3% yield that challenges the long-bond;
• ConAgra Foods, Inc. (NYSE: CAG) is down 0.2% at $25.67 with a 3.7% yield that beats the long-bond;
• Campbell Soup Co. (NYSE: CPB) is up 0.25% at $34.49 with a 3.4% yield that beats the long-bond;
• Hormel Foods Corporation (NYSE: HRL) is down only 0.1% at $29.08 but its 2.1% yield is ‘only’ paying what the 10-year has been paying recently.

Smoking has those nice 5%-plus yields for the defensive tobacco sector: Altria Group Inc. (NYSE: MO) is down only 0.1% at $31.75 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down 0.5% at $16.73; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.41 against a high of $42.81.

Diapers, toothpaste, deodorant, and shaving… consumer products are acting defensive: Procter & Gamble Co. (NYSE: PG) is down only 0.3% at $63.50 with a 3.5% yield; Kimberly-Clark Corporation (NYSE: KMB) is up by 0.3% at $79.62 with a 3.7% yield; Colgate-Palmolive Co. (NYSE: CL) is down 0.1% at $99.20 but it only pays about 2.5% for a dividend yield.

Drug and medical is mixed to positive: Merck & Co. Inc. (NYSE: MRK) is up by over 0.8% at $38.35 with its 4.4% yield; Pfizer Inc. (NYSE: PFE) is down only $0.01 at $22.64 with its 3.9% yield; and Johnson & Johnson (NYSE: JNJ) is down 0.5% at $64.00 with its 3.8% yield.

Those smartphones and telephones are not acting defensive at all today with Verizon Communications Inc. (NYSE: VZ) down 0.9% at $40.80 with its 5% yield and with AT&T, Inc. (NYSE: T) down 0.7% at $33.36 with a 5.4% yield.

Some investors are willing to suffer from the near-zero return of Treasuries, while others are going to try to look for the safest of stocks to seek safe and steady dividends.  The DJIA is down 0.7% and the S&P 500 was down 0.6% at last look.  Both are actually much better than what we were looking at just two hours or so ago.

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JON C. OGG

Falling Oil Prices

Futures for Brent crude continue to sink closer to $100. Saudi Arabia’s oil minister said that the $100 level would be ideal for his nation’s finances and, he believes, those of the portion of the world that imports oil. Also weighing on futures is the financial fate of the EU and the growing recession there. For the time being, the beneficiaries of the drop in prices are large oil-consuming nations like the United States, China and India. The crippled economy in Europe has more than offset concerns about supply due to tensions over Iran and lower output from refineries. But the apparent advantage for the U.S. cuts another way. The slowdown in Europe that has pushed oil prices down means that U.S. exports to the same regions will begin to fall. Corporate earnings for the first quarter from a number of multinationals show the process already has begun.

Avon Mulls Options

Avon Products (NYSE: AVP) said it will take a week to decide whether it will negotiate a new, sweetened deal from Coty. Coty has just gotten financial support from Warren Buffett’s Berkshire Hathaway (NYSE: BRK-B). Coty raised its offer to $24.75 a share from $23.25. Avon’s board has a number of compelling reasons to take the offer. The first is the legacy of former CEO Andrea Jung, who ran the company into the ground, mostly by mismanaging its overseas operations. It also has been alleged that on her watch there may have been bribery problems overseas. The SEC has begun to investigate Avon. A new CEO, Sherilyn McCoy, formerly of Johnson & Johnson (NYSE: JNJ), has been appointed by the Avon board. That should not stop the board from saving the company and preventing a sharp drop in its stock if Coty is rejected. Avon has no viable turnaround plan, and, in the best case, it will take quarters for McCoy to implement one, if she can at all.

Big Box Office

The Walt Disney (NYSE: DIS) super-hero movie “The Avengers” was the top grossing movie at the U.S. box office this weekend. The same was true in many other countries. Estimates are that the film has taken in $373 million in North America since it opened. Added to overseas ticket sales, the number is closer to $600 million. Only a few films in history have taken in $1 billion — a number “The Avengers” almost certainly will pass. Among films that have approached the figure or exceeded it are those in the Transformers, Batman, Star Wars, Harry Potter and Lord of the Rings franchises, and the two most successful movies of all time — James Cameron’s “Titanic” and “Avatar.” “The Avengers” probably will not make it past these Cameron movies, But it will become a franchise with more releases, which will line the pockets of the Disney film studio operations.

Douglas A. McIntyre

A new CEO, Sherilyn McCoy, formerly of Johnson & Johnson (NYSE: JNJ), has been appointed by the Avon board. That should not stop the board from saving the company and preventing a sharp drop in its stock if Coty is rejected. Avon has no viable turnaround plan, and, in the best case, it will take quarters for McCoy to implement one if she can at all.

Douglas A. McIntyre

After the weakness in the broad market has the DJIA down 140 points (or -1.1%) and the S&P 500 Index down 15 points or 1.1%, it turns out that most of the defensive stock sector leaders are holding up far better than the broad market in our go-to defensive stock portfolio.  We have taken a look at each of these with share price snapshots right before Noon EST.

No matter what, you gotta drink!  Pepsico, Inc. (NYSE: PEP) is down 0.5% at $66.28 against a 52-week high of $71.89; Coca-Cola Company (NYSE: KO) is down 0.4% at $76.97 against a 52-week high of $77.82.  With yields of about 3% on average, these are now challenging the 30-Year Treasury yields.  The beer segment is not acting defensive as it should, perhaps because they are foreign issues now with more currency risks: Anheuser-Busch InBev SA (NYSE: BUD) and Molson Coors Brewing Company (NYSE: TAP) are not acting very defensive with price corrections of 3% and 2$ respectively.

Perhaps the most defensive you can get is water, and the top water utility is American Water Works Company, Inc. (NYSE: AWK) with a premium valuation.  This water leader is down 0.8% at $33.73 against a 52-week and all-time high of $34.89.

Food is supposed to be defensive, although a drop of 1.5% in McDonald’s Corporation (NYSE: MCD) to $94.10 is causing some added stress in what was the darling of the DJIA in 2011.  The rest of the defensive food segment seems to be less damaged when you evaluate the moves: Kraft Foods Inc. (NYSE: KFT) is down only 0.4% at $39.11; ConAgra Foods, Inc. (NYSE: CAG) is down 0.7% at $25.52; Campbell Soup Co. (NYSE: CPB) is down only 0.3% at $33.97; and Hormel Foods Corporation (NYSE: HRL) is down only 1 penny at $28.92 as the world is getting excited about Spam again.

Smoking is defensive again and the tobacco stocks are holding up much better than the broad market with those 5% and higher dividends: Altria Group Inc. (NYSE: MO) is down only $0.3% at $32.10 against a 52-week high of $32.62; Vector Group Ltd. (NYSE: VGR) is down only 0.2% at $16.88; and Reynolds American Inc. (NYSE: RAI) is down only 0.2% at $40.18 against a high of $42.81.

Shaving, diapers, toilet paper, and other consumer products are acting defensive with some gains on a weak day.  Procter & Gamble Co. (NYSE: PG) is trading up $0.11 at $64.36 and Kimberly-Clark Corporation (NYSE: KMB) is up $0.08 at $79.08 with KMB challenging the 52-week high.  Colgate-Palmolive Co. (NYSE: CL) is down ‘only’ 0.5% at $99.10 against a 52-week high of $100.81.

Drug and medical is holding up on the consumer end with losses look far less than the broader market: Merck & Co. Inc. (NYSE: MRK) is down 0.35% at $38.40; Pfizer Inc. (NYSE: PFE) is down 0.3% at $22.38; and Johnson & Johnson (NYSE: JNJ) is down the least with a drop of 0.2% at $64.65 against a 52-week high of $68.05.

Those smartphones and telephones are somewhat defensive, and those 5%-plus yields sure shield investors who are worried about chasing the hottest growth stocks.  Verizon Communications Inc. (NYSE: VZ) is down only 1-penny at $40.52 with a 5% dividend yield and AT&T, Inc. (NYSE: T) is actually up 0.2% at $33.08 with a yield of about 5.4%.

When investors want safety and when the Treasury yield is so low on the longer-term Treasury market, many investors turn to the safety of the higher dividends and safer stocks that are defensive.  Greece and the rest of PIIGS may fall again, but the logic is that U.S. consumers still have to eat, drink, shave, put on deodorant, and tend to stick with their core vices as best as they can.

JON C. OGG

It sold 979 million euros worth of bonds maturing in July 2015 with a 4.0 percent coupon, 764 million euros worth of bonds maturing in January 2017, with a 3.8 percent coupon and 773 million euros worth of bonds maturing in July 2017, with a 5.5 percent coupon.

As other financially weak countries in the region have discovered, a little more bad news could turn rates higher within a matter of days. Concerns about austerity and growth have kept the market fickle.

Roubini Predicts …

Nouriel Roubini has come up with another reason for concern that the global economy will come close to collapse next year. He told an audience at Milken Institute Global Conference that a military confrontation between Israel, the U.S. and Iran was likely. The pressure from oil sanctions against Iran and concern about its weapons system will trigger military action. This in turn will drive oil prices to extraordinary levels immediately. The global economy, barely in recovery, cannot stand the shock of a spike in energy prices. There will be a new recession, and it may be worse than the last one.

Chrysler Rebounds

The improbable recovery of Chrysler continues, just three years after a government-supported Chapter 11. Most analysts believed that Chrysler would never have the funds to launch enough new vehicles to compete with larger rivals both in the U.S. and Japan. Chrysler countered by offering just a few cars and light trucks, but nearly every one was a success in the market. Chrysler has announced that it will not close several plants for two weeks of maintenance as it has in the past. The company said it cannot afford to because of demand. While overall domestic vehicles sales in April were modest, Chrysler’s sales rose 20%. Few people believed that the company could eat into the market share of General Motors (NYSE: GM), Ford (NYSE: F) and Toyota (NYSE: TM). It turns out those few people were right.

Obama Jobs Plan

President Obama promised that new programs would provide 110,000 jobs for inner city youngsters this summer. The jobs will be added because of funds put through local programs in Philadelphia, Chicago and San Francisco. Several firms will support this program. They include Johnson & Johnson (NYSE: JNJ), UBS (NYSE: UBS) and, on the government side, the Department of Education. Unemployment among younger Americans is close to 20% in some regions. The Obama plan may be a temporary way to address that in a very small way. No one can tell if the people who get these summer jobs can keep them. Probably not. The economy is still not healthy enough to support a sharp growth in job creation. It will take more than a scattering of programs to fix that.

Douglas A. McIntyre

Johnson & Johnson (NYSE: JNJ) is playing catch-up to other DJIA healthcare players and the new yield is closer to 3.8%.  Call this the 50th consecutive year of dividend hikes.

Wednesday was a very different day in Big Oil.  Exxon Mobil Corporation (NYSE: XOM) went ahead and raised its dividend to catch its yield up to Chevron Corporation (NYSE: CVX).  Something strange happened along the way: Chevron went ahead and raised its dividend much sooner than expected… and on the same day! FULL STORY

The Coca-Cola Company (NYSE: KO) tried something new, or old.  It went back to the 1990s by announcing a stock split for the first time in well over a decade.

International Business Machines Corporation (NYSE: IBM) lifted its payout by 13% and showed why it may still rise to $230 over the next year.

From the Department of It’s About Time… The NASDAQ OMX Group, Inc. (NASDAQ: NDAQ) finally decided to do the right thing by initiating its first-ever dividend.

Investors rely heavily on utilities now for the high dividend yields of 5% or so.  In fact, utility stocks are the new CDs for safe income investors.  We saw two very different takes on the outlook for utilities and their dividends ahead.  This one hits American Electric Power Co., Inc. (NYSE: AEP) and several other key utilities.

Enjoy the rest of your weekend!

JON C. OGG

First, the good news. P&G reported adjusted EPS of $0.94, a penny better than the consensus estimate of $0.93. Revenue came in a $20.19 billion, about -5% lower than the estimate of $20.29 billion. The company blamed the lower revenues on a government price cap in Venezuela and lower sales in some developed markets.

For its fiscal fourth quarter ending in June, P&G forecast adjusted EPS of $0.79-$0.85, compared with the current consensus estimate of $0.93. For the full 2012 fiscal year, P&G now forecasts EPS of $3.82-$3.88, well below the current consensus estimate of $3.98.

Here’s another problem that hit P&G in the third quarter: “The benefits from sales growth and cost savings were offset by higher commodity costs.” P&G’s gross margins for the quarter were down -1.5% partly because the company was unable to pass along higher costs to customers. Kimberly-Clark was able to raise prices, but when P&G tried the same thing, competitors refused to follow and the company had to reduce prices to old levels.

P&G’s shares are down -3.2% in late morning trading at $64.74 in a 52-week range of $57.56-$67.95.

Paul Ausick