The R&D Index: Market Watch for the week ending Sept. 16, 2016 closed at 1518.69 for the 25 companies in the R&D Index. The Index was up 0.21 percent (or 3.2 basis points) over the week ending Sept. 9, 2016. Eleven companies gained value last week from 0.02 percent (Johnson & Johnson) to 11.43 percent (Apple). Fourteen companies lost value from -0.03 percent (Cisco) to -4.81 percent (Daimler).
Apple was the big gainer for the week (+11.4 percent) as orders for its newly introduced iPhone 7 series outpaced both analyst predictions and previous (iPhone 6) order trends. Last week’s gains also saw Apple stock move ahead of its Jan. 1, 2016 value. And that number might have been even bigger. But after rising all week, Apple stock dropped slightly on Friday, due in part to the news that Japan told Apple that it had to pay $118 million in back taxes (following the $14 billion in back-tax news owed to Ireland that was announced three weeks ago).
Intel stock also rose during the week (+6.3 percent) on news that the PC market (for which it supplies ICs) had surged. AMD also said its demand for chips had improved, which saw its stock improve last week as well. The data released reflected on expected fourth-quarter 2016 shipments. R&D Index member Oracle also had a big stock price swing, but in the opposite direction as revenue and earnings reports failed to meet investors’ expectations (for the week Oracle stock was -2.8 percent, with -5 percent after earnings reports were released).
Following several failed attempts Bayer AG last week announced that it had convinced Monsanto’s Board of Directors to purchase Monsanto for $66 billion, including debt. Investors were not convinced that the deal would be able to pass global regulatory hurdles and for the week, R&D Index member Bayer stock dropped 4.5 percent and Monsanto stock dropped 3.3 percent to 103.4. Bayer was forecast to spend $4.88 billion on R&D in 2017 (10 percent R&D/sales), while Monsanto was forecast to spend $1.66 billion on R&D in 2017 (10.7 percent R &D/sales). The combined R&D spending would likely push it into the top 20 in industrial R&D spenders (they’re currently ranked #28 and #72). Bayer’s R&D spending was growing at 2.5 percent/yr., while Monsanto’s R&D spending was growing at about 1 percent/yr. Bayer has strong sales in Europe and Asia, while Monsanto has a strong U.S. presence, so the merger would enhance the combined corporate entity’s global presence. The combined Bayer-Monsanto (with 2015 combined sales of about $68 billion) would also give it a more competitive posture to the proposed $130 billion alliance between Dow and DuPont, which itself is still being evaluated by EU regulatory groups.
| Ticker | Exchange | 2015 R&D billions$ | 09/09/16 | 09/16/16 | 9/16/16 to 9/9/16 | 9/16/16 to 1/1/16 | ||
| 1 | Microsoft | MSFT | NASDAQ | 12,448 | 56.21 | 57.25 | 1.85% | 3.19% |
| 2 | Intel | INTC | NASDAQ | 12,128 | 35.44 | 37.67 | 6.29% | 9.35% |
| 3 | Roche Holdings | RHHBY | OTC | 10,242 | 30.55 | 30.60 | 0.16% | -11.23% |
| 4 | Toyota | TM | NYSE | 9,112 | 118.66 | 114.63 | -3.40% | -6.84% |
| 5 | Johnson & Johnson | JNJ | NYSE | 9,046 | 118.23 | 118.25 | 0.02% | 15.12% |
| 6 | Novartis | NVS | NYSE | 8,935 | 78.65 | 79.34 | 0.88% | -7.83% |
| 7 | Apple | AAPL | NASDAQ | 8,397 | 103.13 | 114.92 | 11.43% | 9.18% |
| 8 | Pfizer | PFE | NYSE | 7,690 | 34.10 | 33.94 | -0.47% | 4.79% |
| 9 | General Motors | GM | NYSE | 7,500 | 30.48 | 30.97 | 1.61% | -8.94% |
| 10 | Merck & Co. | MRK | NYSE | 6,704 | 62.49 | 62.28 | -0.34% | 17.91% |
| 11 | Ford Motor | F | NYSE | 6,700 | 12.38 | 12.11 | -2.18% | -14.05% |
| 12 | Cisco | CSCO | NASDAQ | 6,411 | 30.85 | 30.84 | -0.03% | 13.55% |
| 13 | Oracle | ORCL | NYSE | 6,042 | 40.03 | 38.92 | -2.77% | 6.54% |
| 14 | Astra Zeneca PLC | AZN | NYSE | 5,997 | 32.20 | 33.82 | 5.03% | -0.38% |
| 15 | Honda | HMC | NYSE | 5,990 | 30.09 | 28.92 | -3.90% | -9.43% |
| 16 | Bristol-Myers Squibb | BMY | NYSE | 5,920 | 55.66 | 55.60 | -0.11% | -19.19% |
| 17 | Qualcomm | QCOM | NASDAQ | 5,833 | 60.52 | 62.99 | 4.08% | 26.03% |
| 18 | Sanofi SA | SNY | NYSE | 5,519 | 39.19 | 38.43 | -1.94% | -9.89% |
| 19 | Eli Lilly Co | LLY | NYSE | 5,331 | 78.24 | 78.80 | 0.72% | -6.46% |
| 20 | GlaxoSmithKline | GSK | NYSE | 5,250 | 42.50 | 42.88 | 0.89% | 6.27% |
| 21 | IBM | IBM | NYSE | 5,247 | 155.69 | 153.84 | -1.19% | 11.82% |
| 22 | Daimler | DDAIY | OTC | 5,169 | 63.46 | 60.41 | -4.81% | -22.45% |
| 23 | Siemens | SIE | XETRA | 4,929 | 104.80 | 103.75 | -1.00% | 15.43% |
| 24 | Bayer AG | BAYN | XETRA | 4,649 | 95.02 | 90.78 | -4.46% | -21.88% |
| 25 | Ericsson | ERIC | NASDAQ | 4,124 | 6.88 | 6.75 | -1.89% | -29.76% |
| Total | 175,313 | 1515.45 | 1518.69 | 0.21% | -0.19% | |||
| Biopharmaceutical | 666.83 | 664.72 | -0.32% | -4.31% | ||||
| Automotive | 255.07 | 247.04 | -3.15% | -12.08% | ||||
| ICT | 481.87 | 496.43 | 3.02% | 11.20% | ||||
About the R&D Index/Market Pulse
R&D Magazine’s R&D Index is a weekly stock market summary of the top international companies involved in research and development. The top 25 industrial spenders of R&D in 2014 were selected based on the latest listings from Schonfeld & Associates’ June 2015 R&D Ratios & Budgets. These 25 companies include pharmaceutical (11 companies), automotive (5), ICT (7) and conglomerate (2) organizations who invested a cumulative total of more than $170 billion in R&D in 2014, or approximately 10.8% of all the R&D spent in the world by government, industries and academia combined, according to R&D Magazine’s 2014 Global R&D Funding Forecast. The stock prices used in the R&D Index are tabulated from NASDAQ, NYSE, XETRA and OTC common stock prices (in U.S. dollars) for the companies selected at the close of stock trading business on the Friday preceding the publication of the R&D Index in R&D Magazine’s R&D Daily eNewsletter.
The companies used in the R&D Index include Microsoft, Intel, Roche Holdings, Novartis, Johnson & Johnson, Pfizer, Toyota Motor, General Motors, Merck & Co., Ford Motor, Cisco, Apple Computer, Sanofi SA, Qualcomm, IBM, Astra Zeneca plc, Honda Motor, Daimler, Oracle, GlaxoSmithKline, Siemens, Eli Lilly Co., Ericsson, Bristol-Myers Squibb and Bayer AG. Stock prices are based on those stocks traded on the U.S. exchanges. R&D Index trends (in the stock prices) are just one indicator of the amount of capital available to these high-technology companies to invest in R&D and should not be implied to indicate the absolute value of R&D investments made by these organizations. The companies chosen for the R&D Index have very large sophisticated internal and global R&D organizations with each company investing between $4.3 and $11.7 billion annually on their R&D efforts.
