If some French and international stocks are very well known because they are from popular companies and brands and their activity is clearly identified, others, like Technicolor stock, attract less investors although they deserve to be known. We therefore propose to learn more about this stock and to obtain some information and a technical analysis of its price over the last 10 years.
This stock is particularly sensitive to the value of the US dollar on the foreign exchange market due to the international nature of the group's activities. We will therefore have to keep a close eye on this point.
We will keep a close eye on Technicolor's Drive 2020 plan, which includes the creation of an alternative HEVC pool, growth opportunities in HDR video and audio technologies, and patent recognition by industry leaders in smartphones and tablets. This plan should enable the group to reach a target of 680 million euros of operating profit with a cash flow of more than 280 million euros.
The group also recently acquired the company Mikros Iage. We will therefore be watching to see if the company's position in the digital production sector is strengthened as a result of this strategic acquisition.
Similarly, the evolution of the connected home business, which is currently experiencing a significant drop in investment from the US and significant pressure on memory chips, will be of great importance for the future of the group.
Of course, the annual financial results will be closely monitored and compared with the forecasts of analysts and the group itself. They are indeed excellent entry points to the market.
Finally, we will of course monitor the direct competition of this company and the patents and innovations developed by the major groups in this sector of activity as well as the evolution of the market shares of each company.
The Technicolor group is a product of the French creative and technological industry, and also offers entertainment content. Operating through licenses to its user customers, the group has built up a solid portfolio of patents of all kinds.
It also provides cutting-edge services in the field of special effects, animation and post-production for the film industry. It is one of the international leaders in this sector.
Technicolor's share price is currently listed on compartment A of the Euronext Paris market and is included in the calculation of the CAC 40 stock market index.
Here is a presentation of the main competitors that the Technicolor group must face according to the business segment concerned. The study of this competition will of course be essential if you want to make a relevant analysis of this market and the possibilities of the rise or fall of this stock.
Deluxe, Framestore, Other in-house production branches of global advertising holding companies like Hogarth for WWP, Prodigious for Publicis, Craft for IPG, eg+ Worldwide for Omnicom.
Deluxe, fotoKem, Panavision / SIM, In-house services of the largest studios depending on the segment and region.
Animal Logic, Sony Pictures Imageworks, Cinesite, Ilion Animation Studio, Reel FX, Bardel Entertainment, CGCG Virtuos Ltd, Keyword Studios
Here you can discover the main partnerships set up by Technicolor over the last few years.
Technicolor Group signed a partnership with NXP Semiconductors in 2008 to create a joint venture to combine the transmission module businesses of both entities.
Also in 2008, Technicolor created a joint venture with several partners including Sagem Communications, Orange and Thompson in the digital home software sector called Soft At Home. This entity aims to create and promote a software platform to facilitate and accelerate the adoption of digital home services.
In 2010, Technicolor signed a strategic partnership with the Warner Bros group for DVD and Blu-Ray duplication and distribution services. The leader in physical media and the leader in media duplication hope to significantly increase their revenues.
In 2014, Telefonica will also partner with Technicolor to provide satellite set-top boxes to support the large-scale launch of a high definition video service in Latin America.
In 2015, Technicolor signed a long-term agreement with the French group Canal +, a subsidiary of Vivendi, to provide new services with the channel's Cube S decoder.
Also in 2015, Technicolor teamed up with Sony to create a joint patent licensing program in both digital TV and monitor displays. Technicolor will then be the exclusive agent for licensing the combined patent portfolio for digital TVs and computer monitor displays.
Finally, in 2017, Technicolor announced a partnership with mobile manufacturer Nokia to create augmented reality content with OZO Creator.
The first asset of Technicolor is of course the fact that it is the former Thomson company which was recognized as a true specialist in innovation in the digital field. Even today, the Technicolor group benefits from an excellent positioning in its various businesses, in which it is either the international leader or the number 2.
The organization of the Technicolor group's activities can also be considered as a real strength of this company. Indeed, the group divides its businesses into three main operational divisions. The first one concerns the connected home. The second is the production of VFX and DVD services for content creators and broadcasters, including film studios, TV channels, post-production and telecom operators. Finally, the group's last activity is patent management. Thanks to this division of the various businesses, Technicolor is better protected against the risk linked to a single sector of activity.
Another great strength of Technicolor is its ability to innovate constantly. Indeed, Technicolor currently holds one of the largest patent portfolios in the world. The recent contracts that the group has put in place with Sony and LG in the smartphone and tablet sector will further strengthen this portfolio with new patents that will undoubtedly yield interesting benefits in the medium and long term.
The Technicolor group therefore relies heavily on research and development of new solutions and products. However, it is focusing its R&D investments on the most profitable areas of digital television, video compression, smartphones and set-top boxes. The company is also working hard to position itself as a pioneer in the field of visual effects and thus take advantage of certain booming sectors such as virtual reality.
Technicolor's alliance with Cisco is also noteworthy, allowing it to significantly reduce its costs while significantly increasing its market share in DVD services. This partnership has quickly resulted in a gradual and steady increase in margins in the connected home sector.
Technicolor's first major shortcoming concerns the financial charges that the group must bear. These charges are still considered too heavy at the moment and therefore weigh on the profitability and competitiveness of the company.
We can also wonder about the future of certain of the group's businesses, such as the set-top box sector. The preservation of licenses in the medium term is therefore a key issue for the group which, in the event of failure, could cause it a lot of harm.
Although the connected home business is Technicolor's most important business, its profitability is still considered insufficient by analysts. This is also true for entertainment services, which are also not very profitable at the moment.
In recent news, the group has also lost the MPEG LA patent recently. As a result, the old marketing strategy based primarily on the collection of royalties is no longer relevant. It is now necessary for the company to rely on signing contracts with producers in the consumer electronics sector. However, the increasingly short life span of video compression technologies leads to a significant lack of visibility regarding future sales possibilities.
Generally speaking, we note that forecasts on the group's activities remain very complex to date. Indeed, the Technicolor group no longer publishes quarterly revenues since 2017 and investors can therefore only rely on annual revenues.
Finally, Technicolor stock is causing a lot of doubt among buyers due to its recent history and the loss in 2016, not to mention the earnings warnings received in 2016 and 2017.
You can purchase Technicolor bearer shares through a financial intermediary of your choice and opt for intermediary registered shares either registered in Technicolor's accounts but held with the intermediary or pure registered shares directly registered in Technicolor's accounts. You can also choose to speculate on Technicolor's share price using an online CFD trading platform.
Since the date of the Technicolor reverse stock split on July 15, 2010, the ISIN code associated with these shares is FR0010918292. As for the former non-consolidated shares, their ISIN code is FR0000184533 until January 15, 2011. It should be remembered that the Euroclear code 18454 grouped together the shares acquired by individual shareholders at the time of the stock market listing in November 1999.
To give yourself the best chance to succeed in your investment strategy on Technicolor share price, you must make sure to use all the methods at your disposal. You should use both fundamental and technical analysis and compare the signals obtained through these two analyses. This will refine your forecast by taking into account both the economic environment and the volatility of the market.
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