Today I sold 10 shares of Roche at Sfr 231 each – reducing my position from 25 to 15 stocks.
Roche has become too expensive in my opinion. It is a fantastic company to hold but I am getting uncomfortable with the overvaluation.
Roche has Sfr 24.5 bn in debt, Sfr 7.2bn in pension liabilities, and Sfr 4.5 bn in cash. The current market cap is Sfr 196 bn. This puts the EV to sfr 224 bn. At FCF of sfr 4.6 bn, and net income of sfr 9.7 bn the EV/Earning > 22 and EV/FCF > 48 ! The dividend has been growing nicely but at sfr 7.35 per share (which after witholding tax is sfr 4.77); the yield is only 2%.
I am looking into some stocks and will redeploy the cash.