Rolls Royce

What would YOU do if RR is 4% of your Portfolio?

Poll runs till February 21st, 2017, 2:37 pm

Continue to collect Scrip Dividend, think Long Term
5
26%
BUY some more as long as the Dividend is safe
2
11%
SELL entirely
4
21%
Take No Action
8
42%
 
Total votes: 19

YeeWo
Lemon Pip
Posts: 53
Joined: November 5th, 2016, 10:12 am

Rolls Royce

Postby YeeWo » January 2nd, 2017, 2:37 pm

https://www.bloomberg.com/gadfly/articl ... used-to-be

Opinions gratefully sought on the above article. RR is currently 4% of my portfolio, I trimmed on 15 Aug 16 at £7.99 which as things have turned-out was well timed. The debatable issue is whether RR is becoming as capital-consuming as the airline industry it serves. I cannot envisage a world without RR, but the above article compounds my concerns! Latest Broker recommendations:-



Opinions really Gratefully Appreciated!

casapinos
Posts: 33
Joined: November 6th, 2016, 7:36 pm

Re: Rolls Royce

Postby casapinos » January 5th, 2017, 3:46 pm

I began buying RR about 18 mths ago , accumulating gradually at prices below 800p. My logic was that the continued rapid growth of air travel was certain for many years(see China population travel stats), plane orders were steadily rising , the order book was sound, and long-term maintenance cash will roll in for years. I knew that the co. was not well managed but was convinced that it was (and still is) undervalued.Luckily I sold all at 820p on the july spike(the best timed trade of the year for me!)but am now accumulating again for the same reasons as above. The problem looming is the adjustment to the way they book revenue(every engine is sold at a loss which is recouped over the 20+years of maintenance)That meant that they "fiddled the books " on sales to bring forward some? maintenance revenues at the time of sale.The adjustment needed to create a fair reflection of cashflow will create some pretty frightening figures in the next year, BUT they reflect accounting requirements rather than a fundamental change to the business.If you believe as I do that RR will continue to sell a significant share of the aero engines installed over the next decade(and that is my time horizon)then RR is a buy for me. I am many zeros behind Buffett, but I trust his maxim, I am buying, slowly, when other are fearful, though I fully accept the likelihood of the sp being lower at times in the next year or two.

FredBloggs
2 Lemon pips
Posts: 199
Joined: November 12th, 2016, 8:42 am

Re: Rolls Royce

Postby FredBloggs » January 6th, 2017, 2:32 am

they just had a major project win with Emirates for their A380 fleet. Given that RR is the UK's last remaining truly world leading engineering company, if they aren't a buy on a decade long view, then I'm not sure what, if anything, is.


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