Paradoxically, a value stock is only a value if there is some growth to the name. True, there is the occasional "wasting asset" stock that is worth more than its current price, but most operating companies need some reasonable amount of growth to deliver that value. That is the problem with Swiss medical technology giant Roche (Nasdaq:RHHBY.PK) these days - while the company has several valuable franchises under its roof, the growth performance has been lackluster and the company seems slow to change this.
A Look Ahead at a Mediocre Third Quarter
Roche gave investors a preview of results on Thursday. Reported sales fell 3% in local currency terms, which was about 2% below the average analyst expectation. A 2% miss is no reason to panic, but investors should be at least modestly concerned that the business was weaker than expected, more or less, across the board. Pharmaceutical sales were down 5%, as the company saw a fall-off in Tamiflu and very low single-digit growth from its big three of Avastin, Herceptin and Rituxan.
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