Worth a Punt on Rolls Royce?

Farnborough and RIAT bump

Cool. In at 2.60, out again at 2.82. £76 profit on a £1k investment.

Think I’ll try that one again in a few days….

What happened to the other £10 or 1% shift in your favour?
Shares us 8.5% and profit 7.6%
Run away, Run away.
Engines sell at a loss, money is in the contracted service of 10 cycles.
RR profit predicts on future income from these 10 services and fleets are mothballing planes, so less services. It’s a bit like ink jet printer sales.
Personally I would never act on any advice regarding investment from any internet forum/phone call/letter in post/my mate says. Good luck, it may well just pay off, however risks are way too high IMO.

What happened to the other £10 or 1% shift in your favour?

£4.95 to buy, £4.95 to sell, £5 Stamp duty.

I overstated the profit a bit. Only £69

Cool. In at 2.60, out again at 2.82. £76 profit on a £1k investment.

Think I’ll try that one again in a few days…

Right, it dropped again to 2.54, so I bought another grands worth and waited for it to go up to 2.82 again 🙂

But it didn’t, can you believe it…. it dropped to 2.47 🙁
So the obvious solution was to buy some more at this new “never to be repeated ” low. So I did.
And then it dropped again to 2.43 so I spent my last £750 to try to reduce my losses.
Then it dropped to 2.39

Can’t believe you lot didn’t warn me this might happen. 😉

They’ve rallied a little now to £2.41 – you’re on your way back to BIG PROFITS! 😀

Day trading (/short term investing) is a zero sum game in terms of beating the market – e.g., if the market rises 0.4% in a day, for those investors that achieve a return of 0.6%, there must be corresponding investors who achieve only 0.2%.

However – it doesn’t mean that everyone in the market can’t make money over a given period. A rising tide floats all boats yada yada.

A rising tide floats all boats yada yada.

My boat’s sprung a leak.

Have those day trading this company seen the rumoured rights issue in September?

Run! Run away I tells you!

Crashed to 215p today 😬

Thread just bought back my attention to RR:

So:

– Downgraded as junk by Moodys
– Rights Issue diluting shareholders in Sept

They say don’t try to catch a falling knife but hey; let’s have some fun, I’m in (small amount I can afford to lose).

Any of you guys using trading 212. Always been an HL guy but the fees… Any catches?

In at 218.

Let’s see if I’m laughing or crying in 3 yrs.

Check out SIG Plc if you like lost causes 😉

Great article on WSJ about how “the world has too many jet engines…”

It also echos my point about RR being particularly vulnerable to the Covid Crisis due to their reliance on servicing and their absence from the more rapidly recovering short haul segment of the market.

Very few big planes are flying, many are likely never to do so again, many of these planes have RR engines. These engines now have limited worth as there is an abundance of them, limiting their value as parts and their likelihood of being serviced.

Sales or new, large aircraft were already slow, after C19 both Airbus and Boeing have cut production of large aircraft by 50-60%.

Rolls may have market share in marine, defence, nuclear, etc, but the company is insolvent without Aerospace as it’s by far the largest proportion of the company and the one which pays for/ provides for all others.

“the world has too many jet engines…”

Good point… is now a great time to be investing in an industry with huge problems & an uncertain future? Unless you think that it’s already dropped as low as it can possibly go (although I think this thread has already proved that’s not the case!)

Reminds me of when my brother in law started with Yellow Pages many years ago.

Some great deal on shares. He stuck 2k into them and just watched his rainy day fund drain away…. 😁

Agree re jet engines. Let’s assume RR never sell another. RR is still interesting for power systems, defence and IP.

My complete amateur / arm chair analyst reasoning goes:

* People need power to charge their ebikes, watch Netflix or fight…
* …People will never stop fighting over (insert whatever makes people angry this minute here).

As long as the above is true RR still in with a shot.

SIG PLC you say. Never heard of them before but why not.

* UK planning laws look they are about to get overhauled to drive home building.
* People will always need shelter of some description.

Any more falling knife lost causes to help me start my STW lost cause mini fund haha…

Yeah I did have a punt on SIG Plc – I think the fundamentals of the business look good, but there was some news about a takeover I didn’t have time to delve into fully. I got nervy and sold with a massive net profit of £26 on a grand 😀

How about Aviva or Primark (Associated British Foods is the ticker, weirdly)? Though the latter falls foul of even my flimsy ethical principles…

Yell made minimal revenue via physical booklets requiring loss making physical production, logistics and sales teams. Up against them were no way for customers to measure ROI, a poor management team in a winner takes most market vs Google Maps, automation, the rest of SV and the internet. They were dead before they started fund rather than STW lost cause fund…

Aviva – Not lost enough.
Primark – As above.

Thread just bought back my attention to RR:

– Downgraded as junk by Moodys
– Rights Issue diluting shareholders in Sept

Well…all aerospace companies have been downgraded recently even Boeing and Airbus as well as RR’s competitors. Doesn’t mean that much in the long run. Just a minor inconvenience as it means capital is more expensive to buy and they’re all borrowing big time at the moment.

On Rights issues…There are upsides to rights issues too. Depends on a great many factors and who knows how investors will view it. Who know’s what is in the mind of investors at any time? All depends on how RR sells it.

Great article on WSJ about how “the world has too many jet engines…”

It also echos my point about RR being particularly vulnerable to the Covid Crisis due to their reliance on servicing and their absence from the more rapidly recovering short haul segment of the market.

Very few big planes are flying, many are likely never to do so again, many of these planes have RR engines. These engines now have limited worth as there is an abundance of them, limiting their value as parts and their likelihood of being serviced.

All engine manufacturers are exposed to COVID as they all make their money from engine servicing. So if aircraft are not flying they’re not coming in for servicing so RR is no more exposed than any other manufacturer – they’ve all announced similar levels of redundancies and cost saving measures. In fact the RR powered fleet is significantly younger on average than the competition so when aircraft do come back into service it will be the younger more efficient aircraft coming back first, so the 787’s, A350’s A330’s etc. which RR is very well represented on. And for every A380, 747 and 777 that doesn’t come back into service it just means there will be two 787’s/A330’s/A350’s in its place. The big jumbo’s are falling out of favour not because of lack of passengers, but because the network and market has changed and they’re too specialised and not flexible enough for most airlines and they cannot optimise their networks. Better to have 2 A350’s than one A380. The older gen aircraft will be much slower to come back if they come back at all.

Alot of governments bailing out airlines are providing help with strings attached…that airlines improve their environmental impact, so more likely that younger more efficient aircraft will be stood up – or even new aircraft purchased, which will benefit RR. Also Airbus are offering a scheme like the car replacement scheme, which might stimulate more sales and replacement of ‘old smokers’, and RR exclusively powers Airbus WB aircraft right now.

The rapid return to flying for narrow body aircraft demonstrates the demand for flying is still as strong as ever. Narrow body aircraft are currenlty flying about 80% of pre-covid schedules in the biggest markets – basically servicing the traffic in the huge US, Chinese and the asian domestic markets. International traffic, which the bigger wide body aircraft serve, is still being subdued due to government policies preventing international traffic…but as soon as those restrictions are lifted then it is highly likely international traffic will increase very quickly. It’ll most likely still take several years to get back to pre-COVID levels, but traffic will return to decent levels pretty quickly and continue to grow. Traffic has been increasing slowly since March, but still a way to go yet.

RR is going through an extremely tough time right now and it is likely to get tougher before it gets better. But they’re no different than any other airline, manufacturer, supplier or player in the industry but it’s not all doom and gloom…certainly as doom and gloom as the WSJ portrays it…and always portrays it…they’re not RR’s biggest fans and pretty much all their articles involving RR are pretty pessamistic in favour of their more favoured manufacturers on the ‘right’ side of the Atlantic. They’re about 2 years too late in ‘breaking the news’ of overcapacity in the industry too – about par for the course for them.

Billoxs. Piss off. The lot of you.

😄😜😀😃😁

Ha ha. I’m so ****.

Rolls may have market share in marine, defence, nuclear, etc, but the company is insolvent without Aerospace as it’s by far the largest proportion of the company and the one which pays for/ provides for all others.

There is a contrarian view that it’s actually the civil aerospace business that is holding them back. It’s capital intensive, product is sold at a massive loss (imagine going into dragons den trying to sell a business where every product you sell you make a huge loss on).

I was chatting to a mate the other day who was saying some investors are calling for civil aerospace (or the large engine part of it) to be sold. Couldn’t believe it at first but the more I think about it I can see it could make sense.

Not really. Where do you think the engine cores and research that the cores for marine and commercial gets done? Aerospace. Rolls biggest problem is that it keeps developing shit engines. Trent 900 – massive problems. Trent 1000 – massive problems. Luckily the XWB and 7000 seem to be more solid.

Any of you guys using trading 212. Always been an HL guy but the fees… Any catches?

Yep, I use the ISA account to dabble, IIRC You’re capped at £100000 worth of deposits P/A (although you’d be well over your ISA limit by then) and I think you’re limited on the total number of trades you can do in a day/week/month and more constrained on how many trades you can do per day on a single stock. Those measures are probably to deter the Professionals/day traders from using it as a fee free platform on the side…
Any Dividends earned are automatically paid into the account balance (treated as earned interest I think for the purposes of an ISA)…
you can set limit buy and sells (for whole units only) which is handy if you don’t spend all day glued to it
you can trade some shares fractionally (Nice if you don’t fancy paying the full ~$3k for a single share of Amazon at present).

Their charts and info on companies are generally toss, go and google more detail on any company before buying…

I think they probably prop up the “free” Trading/ISA account with the CFD thing which I’m pretty sure people piss small fortunes away on, Don’t touch it…

Overall it’s easy, quick and convenient to use.

I’ve found it best to stick to just a few shares/ETFs that I can keep track of and manage, some that will be a bit more stable longer term and track with markets, and a couple of more speculative (I’ve watched the news and Reckon I’ve spotted an opportunity) type shares…

My general rule is never sell at a loss (just tough it out if a share goes down unexpectedly hold on till it recovers, that’s where the Limit Sell function can be handy) and overall aim to match or beat ~3% because that’s about the best any ISA (well my Kid’s NS&I ISas anyway) seem to be able to offer…

My general rule is never sell at a loss (just tough it out if a share goes down unexpectedly hold on till it recovers, that’s where the Limit Sell function can be handy)

Can you explain this one please. Surely Limit Sell function and “never sell at a loss” are contradictory?

Think you are thinking stop loss order.

Limit sell order is just a sell at a target price – not at a loss.

Both stop you having to look at screen all day.

Made 4.5% on RR today – should just quit now haha.

Ah right. Thanks.
Silly me.

@Daffy

Aware of the scale of the aerospace sector @ RR. CLE “powers” the company (if you excuse the pun) but it’s also the sector that sells each and every product at a very large loss. Investors don’t usually like that sort of thing. Bad for business etc.

I was aghast at the thought of RR selling off CLE, but from an investor point of view I can see why some would want to. (That’s not an indictment that it’s going to happen)

Re poor engines – The XWB isn’t bullet proof and is starting to show some issues. Thankfully nothing of the scale of the T1000.

In at 218

10% profit in 24h hours. Nice one.

10% profit in 24h hours. Nice one.

This is still in the margins though.
RR hasn’t been this low for years, I’m sure people will be buying a few shares for what seems like relative peanuts while it’s still under 250 and be willing to just hold on for as long as it takes (years probably) for them to bounce back by say ~300%…

These current swings will only go on for so long (while they’re getting their less positive announcements out? ). Hence gambling on one day fluctuations becomes increasingly risky if the price goes and stabilises. So don’t buy anything now that you can’t afford to be stuck with for a longer period…

Can you explain this one please. Surely Limit Sell function and “never sell at a loss” are contradictory?

You set a sell price and qty you want to sell, you set that price above the current value, and unless you’re mad above the price you paid. Its worth noting that limit sells do carry a couple of risks, you may set a limit that turns out to be well below the peak value the share hits and miss out on some potential profit, or go and set it too high and miss an opportunity to sell on a peak and then be lumbered with shares you don’t particularly want. Set your selling prices realistically and look at historical values, don’t go for the peak price, look at an average value instead, something it has a reasonable liklihood of hitting again.

Stop and stop/limit are also options but I only ever tend to use (GTC) limit on shares I expect to rise eventually. Limit/stop allows you to set upper/lower boundaries for a sale.

There are similar tools for buying if you think a share might dip below a certain value, but the risks are similar, you might miss the bottom out price or set it too low…

It’s worth noting that all share prices have been affected by CV19 to some extent, so current trading conditions are not the norm. At some point things will change again. Big events and unstable markets mean opportunities for big profits and losses. Personally I’m less bothered about making thousands of pounds ina single “brave” trade and more about using it to “beat the banks” in terms of savings interest.

11% and hasn’t started. To put into perspective I’m classing this as a bet rather than investment.

Researching more the things that make this a good bet are bad for the industry, the co and our country long term…

…activist investor/s / PE likely to poor in, gut loss making parts of co (that likely do drive a lot of R&D) and sell IP with the aim to drive profit / share price in the short term. C-suite incentive scheme will Likely be tied to this. Opportunity too great.

Wish Boom Aerospace were in the UK and I could work / invest for them.

Which service are you using for your bit of fun @thegeneralist?

Ajbell. Youinvest.co.uk
Seems to work ok, though I have no experience of others.

It’s an ISA

RR closing price was 245p; same as it was on April 25th 1997.

Don’t know why I posted that stupid question about limit sells and limit buys…… Complete brain freeze. Was mixing them up with stop loss orders.
God knows why, as I must have done about a hundred and thirty transactions since opening the account in March, about half of which were probably limit transactions.

DOH.

29%… Crazy. Offset losses against stupid SaaS stock over the same period… Fastly / FSLY grrrrrr.

He he. You must have made a stack at 218. Did you sell yet or planning on holding? I was in at 245 average or thereabouts. Sold them in three slices finishing up at 280ish today, so a couple of hundred quid profit is happy days.

Down again now please.

I’ve just finished as an interim at SIG

Very interesting business and raised £165m of equity through existing shareholders and a big new PE shareholder

New CEO and CFO too, and a back to basics strategy

I think they could do well….but I’m no financial advisor lol

Rolls-Royce shares slump after big loss and site closures