General presentation of the Roche Company:
The Roche Holding group is currently one of the leaders in the pharmaceutical sector worldwide. Its activity can be divided into several large sectors, mainly pharmaceuticals as well as diagnostics.
Although the Roche pharmaceutical group is Swiss, it achieves only a small percentage of its turnover within the country. Its activity extends mainly to the United States, Europe, Asia and Japan.
Knowing Roche shares competition:
The Roche pharmaceutical group is currently the world's number 3 in this sector, particularly due to its vaccines and medicines produced for the entire world. But naturally, it's not the only one trying to increase market shares on an international level in this field and has to thwart competition plans. Each year, the ranking of world pharmaceutical leaders evolves and the results of these large companies play an undeniable role on the evolution of their stock market prices. This is why we advise you to read the news from each of the major groups in the top 5:
- Pfizer : Since 2015, leader in this sector in terms of turnover.
- Novartis: Second in the ranking, just in front of Roche.
- Sanofi: In fourth position.
- Meck: Finally, fifth place in this ranking is currently occupied by Merck.
The strategic alliances set up by the Roche group:
The Roche group is constantly establishing strategic partnerships and alliances in the field of research, production or distribution in order to consolidate its commercial forces.
- Bayer: For example, Roche joined forces with Bayer in the late 1990s with the creation of a joint venture in the United States to produce and market pain relievers and other non-prescription drugs.
- Unicancer: In 2008, Roche joined forces with UNICANCER to collect data in metastatic breast cancer.
- Areva: In 2012, the Areva group joined forces with Roche to build a joint laboratory located in France. The project was completed in 2013.
- Sentara Consolidated Laboratories of Norfolk: In 2017, Roche also established a partnership with an American laboratory, Sentara Consolidated Laboratories of Norfolk which has become a player in the MCOE network set up by Roche.
Introduction and stock quote of the Roche share:
The Roche share price is currently listed on the SIX Swiss Exchange. It's also included in the calculation of the EuroStoxx 50 stock market index.
Economic history
To be able to understand what can influence the evolution of the Roche share price, you must first analyze the events that have marked its financial and economic history and their impact on the stock. Here are some important dates from recent years:
- In 2009, Roche completed the acquisition of Genentech laboratories for $ 47 billion and also signed the acquisition of Adanys Pharmaceuticals.
- In 2014, Roche acquired the Seragon Company specializing in biotechnology for 1.7 billion dollars. The same year, it bought Santaris, a Danish biotechnology company for 450 million dollars and the InterMune group for 8.3 billion dollars. And again that same year, the group was accused of agreeing with Novartis to fix the price of certain treatments.
- Also in 2014, the Roche group bought Ariosa Diagnostics, an American prenatal diagnostic company for genetic pathologies.
- In 2015, Roche bought a majority stake in Foundation Medicine Inc also genetic diagnostics field for 1.18 billion dollars then the French company Trophos in the treatment of muscular diseases for 470 million euros. Also in 2015, Roche bought GeneWeave BioScience and announced the closure of 4 factories in Spain, Ireland, Italy and the United States.
Results
Another fundamental fact that you should take into account in your historical analysis of Roche share prices and in the implementation of an effective strategy is the financial results of this group. To help you, here are some figures to know about the past few years.
- From 2010 to 2015, Roche's turnover increased from € 44,216,872 to € 44,206,624 with low annual variations.
- The income from ordinary activities over the same period reached € 46,445,736 compared to € 45,794,680 in 2010.
- The company's operating profit, which was € 12,561,008 in 2010, reached € 13,123,580 in 2015.
- The cost of financial debt has relatively dropped from € 1,800,417 in 2012 to € 830,818 in 2015.
- The stock quote results of the companies highlighted increased from - € 2,794 to € 307,365.
- Roche's net income has remained stable over the past few years, going from € 8,281,174 in 2010 to € 8,881,003 in 2015 with a record in 2014 of € 10,592,936.
In order to trade the Roche share with CFDs you must take the following into account:
- Historical technical analysis and current technical indicators.
- Fundamental events likely to influence the course of the share.
- Competition within this industry.
- The company's earnings reports by comparing them to analysts' forecasts.
Simultaneously using all of these indicators, will allow you to better anticipate future variations in the price of this share on the stock market and take more strategically convincing positions with risk limitation.
The advantages and strengths of the Roche share as a stock market asset :
First of all, the automation of activities implemented by the Roche Group brings an improvement in the quality of products and has enabled the Group to develop further or, on the contrary, to reduce its activities in line with the real needs of the market.
The Roche group has also demonstrated its ability to adapt to new markets through expertise that enables it to penetrate them more easily and to establish a long-term presence in them. As a result of this external expansion, Roche has been able to generate more revenues but also to protect itself against the cyclical risks of the market in which it mainly operates.
The Roche Group is also recognised as a reliable supplier as it has a strong base of its own raw materials suppliers. This enables it to cope with supply chain bottlenecks and to meet its orders.
Roche can also rely on a strong and reliable distribution network which it has built up over time and which enables it to reach a large part of the world market.
The Group also has a highly skilled workforce, which it is constantly strengthening through attractive training and apprenticeship programs. The Roche Group invests heavily in the training and skills development of its employees, which not only provides the Group with a workforce but also increases employee motivation.
Another strength of the Group is the particularly high level of satisfaction of Roche's customers. Thanks to its dedicated Customer Relationship Management department Roche has succeeded in achieving a very high level of customer satisfaction among its existing customers and thus attracting more prospects.
The Group's returns on capital expenditure are also a strength. Roche has successfully completed numerous projects with rapid and significant returns on investment.
Finally, the last advantage of the Group is of course its capacity for innovation with a successful track record in the recurrent development of new products.
Disadvantages and weaknesses of the Roche share as a stock market asset :
Firstly, it is known that the Roche Group encounters some difficulties in integrating certain companies that have a different working culture from its own. The group is unable to merge with some smaller companies because of this difference.
On the labour market, Roche is known to spend a lot of money on training its employees. However, this expenditure may be a drag on profitability in a period of falling production costs for the pharmaceutical industry as a whole and in particular in the face of competition which seems to be reducing such expenditure.
It is also known that both the rate of return of the Roche group and its net contribution are below the average for the industry.
The lack of diversity in the product range offered by this company is also regrettable. This limited choice may allow some of its main competitors to take market share from it. Similarly, Roche is rather poor at anticipating rising demand for certain products with sometimes insufficient or sometimes too much stock.
It should also be borne in mind here that, although the Roche Group is currently one of the leaders in the pharmaceuticals sector, its success in its ancillary activities remains limited. The company is experiencing some difficulties in expanding into other product segments.
Lastly, it should be borne in mind that Roche faces very strong competition from companies in the same sector, which puts additional pressure on results.
