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17 September 2021
21:08 hour

Rolls-Royce earnings: here’s what will help me decide to buy more shares

The Motley Fool UK

10/03/2021 - 18:09

Rolls-Royce is set to report its biggest annual loss in history on Thursday, but is Fool UK contributor Joe Clark buying or selling the shares? The post Rolls-Royce earnings: here’s what will help me decide to buy more shares appeared first on The Motley Fool UK.


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  1. 2 reasons to buy Rolls-Royce at $1.70 (19/03/2021 - Reddit Stocks)
    My thesis for buying $RYCEY (Rolls-Royce) is this simple line here: “In terms of their aims, management has a goal of developing low carbon solutions for hybrid, hydrogen, and electric powered craft"?????? 1.) I think 2021/22 might be a better year 2.) Free cash flow for these new green solutions 2 reasons to buy Rolls Royce   submitted by   /u/xsweeperx [link]   [comments]
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  2. If you haven’t yet, I recommend looking at this Rolls Royce Long ETF, as Rolls Royce is starting to pick up! Not a financial advisor. (23/02/2021 - Reddit Stock Market)
      submitted by   /u/CranusCranii [link]   [comments]
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  3. HAL, Rolls-Royce sign pact for Make-in-India Adour Engine Parts for global markets (14/09/2021 - Money Works 4 Me)
    This follows the MoU signed by Rolls-Royce and HAL during the Aero India 2021 to establish an Authorized Maintenance Centre
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  4. Rolls Royce? (24/02/2021 - Reddit Stocks)
    Hey everyone. Just wondering what the thoughts on rolls royce are? The pandemic really hit their price hard. Dropped from £10 to just under £1. The beloved British company recently just won a contract in India too. I won't go I to too much details. All details are at your fingertips.   submitted by   /u/TopSeaworthiness7501 [link]   [comments]
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  5. Why is the Rolls-Royce share price having such an uncertain June? (21/06/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) is one of the few FTSE 100 stocks that, as my Motley Fool colleague Rupert Hargreaves pointed out, has essentially gone nowhere over the past 12 months. It’s pretty much flat since the start of 2021 too. But looking a little closer, we can see the the Rolls-Royce share price has actually been through a lot of short-term ups and downs. Looking at June alone, Rolls shares have lurched between a high of 113.5p and a low of 104p. That’s a swing of 9% from lowest to highest, and way more volatile than the Footsie. Similarly sized ups and downs have been going on for months. It’s as if investors keep wanting to get in, keep thinking maybe the time is ripe for the recovery to start… and then it doesn’t take off and fades again, until the next time. I know it’s dangerous to read too much into short-term share price volatility. And I would never make an investing decision based on what the Rolls-Royce share price has done over the past few months or so. But if my speculations on investor sentiment are anywhere near the truth, they’re really just reflecting my own thoughts. I like the company The thing is, I’ve liked Rolls-Royce for a long time. And it’s one company that I’d really like to buy a chunk of at a cheap price. The company had hit a tough patch even before the pandemic brought a near halt to aviation. I reckon that presented a good buy at the time for investors with a long-term horizon. But it’s history now. I really do think the Rolls-Royce share price will recover from its current hammering. The only thing I just can’t get my head round is how long it might take for a sustainable profits recovery to set in. Oh, two things — and whether Rolls has the liquidity needed to see it through to such times. If it hasn’t, we might see further falls. In the past month, I can’t help feeling the delayed lifting of the UK’s final Covid-19 restrictions has made investors a bit twitchy again. Right now, Boris Johnson has said it’s “looking good” for the new target date of 19 July to be met. But, well, he’s said a lot of things over the years. Rolls-Royce share price uprating? So what are my thoughts now about the next stage for Rolls as an investment? To turn my own sentiment sufficiently bullish, I think I’ll need to see a positive set of results. In particular, I want to see how the balance sheet and cashflow situation are looking. Once we see clearer developments on those fronts, if we see them, I can see the Rolls-Royce share price enjoying an uprating. When might that come? First-half results should be with us on 5 August, and that’s really not very long now. By then, we should have firmer news on the pandemic front. And, hopefully, a bit of confidence returning to the aviation business. I’ll be waiting at least that long before I finally decide, and possibly a good bit longer. I think there’s probably a 50/50 chance that I’ll end up buying Rolls-Royce shares one day. The post Why is the Rolls-Royce share price having such an uncertain June? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading What’s going on with the Rolls-Royce share price? Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Where will the Rolls-Royce share price go in June? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  6. Why I think the Rolls-Royce share price can rise more (11/08/2021 - The Motley Fool UK)
    Last week Rolls-Royce (LSE: RR) surprised with a net profit for the first half of 2021. The FTSE 100 aero engine manufacturer was seriously affected by the lockdown last year, since a big part of its sales come from the civil aviation business. And as we know all too well, 2020 was not exactly the year for travel.   So it was not expected to recover this fast. Moreover, Roll-Royce’s earnings woes date back far longer than just the pandemic. Even earlier it was clocking losses. So it looks like a pretty impressive feat to me.  Is the Rolls-Royce share price undervalued? Its share price has already made gains since. And I think that if it is able to sustain its performance, it could rise higher. To assess this, I did a quick forecast based on its latest earnings. If its net profit remains unchanged in the second half of the year from the first half, it will end 2021 with £786m as statutory net earnings. At today’s market capitalisation, these numbers reflect a price-to-earnings (P/E) ratio of around 12 times.  However, the P/E of the FTSE 100 index as a whole is about 15 times. This means that Rolls-Royce’s earnings ratio is less than that for the index as a whole. Since, it is a stock with potential, now that travel is possible, I think its share price would gravitate closer to the average earnings ratio over time. At a P/E of 15 times for the company, its share price would rise by around 28% to 140p.  And this is when I have assumed that neither the company’s net profits nor the FTSE 100 index’s P/E ratio are likely to be any higher in the next few months. In other words, these are fairly conservative, if quite rough, estimates. It is possible for its share price to be far higher in another few months.  The downside At the same time, I think it is also possible that its earnings upside may not continue. I say this for two reasons. One, the latest increase was unexpected because it was supported by a big tax credit, which made up for 71% of the profits. This item may or may not support profits in the future.  I think the numbers on underlying net profits or even operating profits are a better measure of the real upturn in its fortunes. These can help in getting a more rounded picture for the Rolls-Royce share price trajectory over time.  My takeaway At the same time, the company is also undergoing restructuring, which includes a disposals programme, so headline earnings may still continue to surprise.  As a result, I think the Rolls-Royce share price can rise more which ever way I look at it, at least in the short term. However, for my long-term investments, I would still consider the stock carefully. And wait for reliable profits from its business, not repeating one-off bump-ups in earnings. The post Why I think the Rolls-Royce share price can rise more appeared first on The Motley Fool UK. Our 5 Top Shares for the New “Green Industrial Revolution" It was released in November 2020, and make no mistake: It’s happening. The UK Government’s 10-point plan for a new “Green Industrial Revolution.” PriceWaterhouse Coopers believes this trend will cost £400billion… …That’s just here in Britain over the next 10 years. Worldwide, the Green Industrial Revolution could be worth TRILLIONS. It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Access this special "Green Industrial Revolution" presentation now More reading 3 reasons why the Rolls-Royce share price jumped 10% last week The Rolls-Royce share price jumped this week. Would I still buy? Rolls-Royce shares: 3 reasons why I’d buy Are Rolls-Royce shares now a bargain? What do the Rolls-Royce results mean for its share price? Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  7. Is the Rolls-Royce share price cheap at 100p? (07/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price has struggled to make headway over the past couple of months. We did see an impressive rally late last year from 40p to around 135p. Recently, the share price has since fallen back to trade in a range between 100p and 110p. Given that shares were trading above 200p at the start of last year, does the current price make it a cheap buy? A tight trading range I think there are a few reasons why the Rolls-Royce share price is currently trading in a tight range around 100p. Firstly, I think a lot of investors are waiting on the sidelines for half-year results. These are due out on 5 August. This should provide a more detailed picture of how the business has coped in the period when lockdown restrictions were starting to end. In theory, this should support the share price if the planned outlook financials are raised. However, nothing is certain at the moment, and so some are likely keeping their powder dry until August. Another reason for the lack of movement recently could be due to the policy regarding Covid-19 restrictions. The anticipated freedom day in June has been pushed back to later in July. The international travel traffic light system hasn’t been the most efficient process. This has meant that the amount of flights and commercial aviation has been limited. Due to the ties Rolls-Royce has to this sector, I’m not surprised that the share price hasn’t been able to find a positive catalyst to move higher. Is the current Rolls-Royce share price fair? It’s hard to confidently say that the Rolls-Royce share price is cheap at current levels around 100p. This is because what is cheap to me might not be to someone else.  A traditional method would be to look at the price-to-earnings ratio. Usually, a low ratio could indicate that a stock is undervalued and cheap. However, Rolls-Royce made a loss last year, so the ratio is negative.  It’s also hard to rank Rolls-Royce against other companies as it depends on what sector I put it in. If I compare it to BAE Systems with a P/E ratio of 11.3, then I would say the share price looks cheap. What about if I compare it to an aviation company like International Consolidated Airlines Group? IAG has an even more negative P/E ratio than Rolls-Royce. So I could argue that IAG offers better value than the current Rolls-Royce share price. I could also look internally at Rolls-Royce. If the half-year results show a reduction in debt and good cash savings, this should help to boost the net asset value. In turn, this naturally should help to push the Rolls-Royce share price higher, as the fundamental value of the business has increased.  2021 net debt (pre-disposals) is expected at £4bn, but potentially getting back £2bn with disposal proceeds. Again, I’m going to have to wait until next month for an update on how well this is going. Overall, I think the Rolls-Royce share price is fairly priced around 100p right now. However, results next month will allow me to get a much better picture in this regard, depending on earnings and debt levels. The post Is the Rolls-Royce share price cheap at 100p? appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Where will the Rolls-Royce share price go in July and beyond? Rolls-Royce shares are below 100p. Should I buy? The Rolls-Royce share price: 3 things that could give it a boost jonathansmith1 has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  8. The Rolls Royce share price is below 100p – so is it a buy? (20/07/2021 - The Motley Fool UK)
    I have to say that whenever the Rolls-Royce (LSE: RR) share price is below the rather arbitrary 100p per share level, I’m tempted to look into whether buying the shares is worthwhile. Well, that’s the case right now. At the time of writing the shares have dipped to around 90p. Hard to imagine that five years ago, the shares were 250p and at the start of 2020 they were 233p. A lot has changed since then. Are there reasons for optimism? One of the biggest potential reasons to be cheerful has to be around the resumption of travel. With many Britons double vaccinated, holidays could be back on the cards. Although restrictions in other countries and slower progress in long-haul destinations like Australia may hold back progress towards travel resuming as normal anytime soon. Rolls-Royce is likely to accelerate away from a reliance on commercial airlines and exciting new technologies like modular nuclear power stations, as well as more work in the defence industry, could make earnings more reliable and stable. Given how badly the shares have done, there’s the paradox that any good news – especially any pleasant surprises – could well see the Rolls-Royce share price do well. I suspect expectations are now so low that there could be significant upside. The CEO has been at Rolls-Royce since 2015, so there’s a steady hand at the helm. At this difficult time a settled and competent management team is absolutely vital and I think it’s reassuring to any investor. Once the worst of the pandemic is over Roll-Royce can once again target better cash flow. All that said, its chair is set to change later on this year, but hopefully by October we’ll be starting to see more air travel and Rolls-Royce getting off its knees. The bad news for the Rolls-Royce share price It’s much easier to find bad news. Revenues are unlikely to recover to anywhere near normal levels soon. In 2022 it’s forecast revenues will still be significantly below where they were in 2015. The company has been loss-making for the last few years and margins have fallen through the floor. Not all the problems with the Rolls-Royce share price can be blamed on the pandemic. Remember, the Trent engine problems meant the engineer was hemorrhaging money before anyone had heard of Covid-19. For now, given it makes so much money from how many air miles planes fly, Rolls-Royce remains at the mercy of the pandemic. Would I invest? That’s why on balance I think there are better investments than Rolls-Royce out there. Given the challenges the company faces, I think buying the shares is a gamble and one I’m personally unlikely to take. But if the shares dip even further, I may reconsider that view as a rather contrarian long-term investment. The post The Rolls Royce share price is below 100p – so is it a buy? appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading Can the Rolls-Royce share price recover in 2021? 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Will the Rolls-Royce share price keep falling? How low can the Rolls-Royce share price go? The Rolls-Royce share price falls again! Here’s what I’m doing about it Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  9. Rolls Royce: the crown jeweled of the U.K (26/08/2021 - Reddit Stocks)
    Does anyone have any input on Rolls—Royce (RYCEY)? I’ve been looking into it for a bit now, and would think it’ll be a good long term hold, especially with the moves they’re doing in order to have flow of capital. This is also a UK “crown jeweled” company which means they would step in if they have to in order for them to avoid bankruptcy. There’s also a high short interest which could potentially have some from of a squeeze. Thanks in advance.   submitted by   /u/First_Class_5498 [link]   [comments]
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  10. Could the Rolls-Royce share price fall below 100p? (27/05/2021 - The Motley Fool UK)
    One of the frustrating things for shareholders in Rolls-Royce (LSE: RR) in recent months has been its struggle to maintain altitude. The Rolls-Royce share price reached 127p in March. But since then it has moved markedly lower. Over the past year, it has lost 10% of its value. So might the shares might fall beneath 100p? Why has the Rolls-Royce share price been falling? One of the points to consider is what has been exerting downward pressure on the aerospace giant’s share price lately. The company is significantly exposed to air travel. The more hours planes with its engines installed fly, the greater its service revenue. Over the past couple of months, hopes of increased European travel have been dampened. I think that has affected the share price. Reasons to be bullish But I see some positive signs for the Rolls-Royce share price. For example, the company said this month that performance so far this year has been in line with expectations across all of its business units. That lack of nasty surprises should help restore some investor confidence in Rolls-Royce. The company has repeatedly said that it expects to turn free cash flow positive in the second half of this year. That would be big news, as lately it has been bleeding cash. If it is able to turn free cash flow positive, that will reassure investors about its liquidity. Last year, a rights issue was heavily dilutive. If shareholders are more comfortable about liquidity growing due to free cash flow, it could be positive for the Rolls-Royce share price. Will the shares fall below 100p? Despite what I regard as positive developments, the Rolls-Royce share price has been drifting downwards lately. If there are more reasons to doubt the speed and scale of European aviation recovery, I think that could easily push the shares below 100p. Any further delay to the free cash flow target would also hit the shares badly in my view. So, I don’t think the shares will necessarily stay above 100p. I could certainly see them falling below that level again. My move on the Rolls-Royce share price But I think the longer-term outlook for the Rolls-Royce share price remains good. Flying demand will come back, in my view – it’s just a matter of time. There are some promising signs outside Europe. Already in the US, for example, United Airlines has upgraded its second-quarter earnings forecast. Such improved demand should help Rolls-Royce. I still think the Rolls-Royce share price could get to 150p or higher this year. But I don’t like how sensitive the share price is to demand recovery in the aviation sector. It has no control over that so is effectively a hostage to fortune. For that reason, even though I do see potential upside, I’m not currently planning to buy Rolls-Royce shares. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Can the Rolls-Royce share price stay above 100p? The Rolls-Royce share price has been ticking upwards. Is it time to buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Could the Rolls-Royce share price fall below 100p? appeared first on The Motley Fool UK.
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  11. The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? (12/03/2021 - The Motley Fool UK)
    After a torrid 12 months, Rolls-Royce Group (LSE: RR) shareholders might finally have something to look forward to. After reporting an underlying pre-tax loss of almost £4bn for 2020 on Thursday, the aero engine maker told the BBC that “the worst is behind us.” The results didn’t make much difference to the Rolls-Royce share price, which has remained flat. The key thing, for me, is the cash situation. Rolls told us it has strengthened its liquidity to £9bn, with £7.3bn of new debt and equity. I’ve been largely convinced in recent months that this would suffice. And I feel more confident of that now, after hearing that the company is aiming to reach positive free cash flow during the second half of 2021. Rolls also hopes to see the figure reach as high as £750m “as early as 2022.” That has to be very much up in the air right now, though, as so much depends on our lockdown easing progress. I have mixed sentiments myself, and I see that in the market’s approach to the stock over the past few months. The Rolls-Royce share price saw something of a resurgence starting in October, on the back of positive coronavirus vaccine results. But that has eased off a bit and we’ve seen the shares fall back a little. A bad year, but I’d feared worse The implied level of caution is understandable. Even after the late 2020 uptick, we’re still looking at a 38% fall over the past 12 months. And to get the full feel of the pandemic impact, we need to look back to mid-February, which is when the stock market crash kicked off. Since then, Rolls-Royce is down 50%. Rolls-Royce makes its money from service and maintenance contracts for the engines it sells. It’s similar to the old Gillette razor model that Warren Buffett likes so much — sell the razors cheap, and then make the profit on the blades. That can be a profitable strategy during good times, and it has kept the Rolls-Royce share price going for decades. But just as shaving didn’t happen quite so often during lockdown, the same can be said for flying, but more so. With airline fleets close to grounded, engine flying hours in 2020 came in at just 43% of 2019’s figure. That’s tough on the Rolls-Royce business model, but it’s actually not as bad as I’d feared. It resulted in underlying revenue of £11.7bn, down from £15.4bn. And again, I’d been expecting worse than that. But would I buy now? Where will the Rolls-Royce share price go now? Rolls says it’s expecting engine flying hours to recover a bit in 2021, to around 55% of 2019 hours. And the company hopes to be back to 80% in 2022 as a base case. The problem is, the outlook is still so very uncertain. There’s clearly pent-up demand for holidays. But we really don’t know when it will be safe enough to fly, or whether any problematic Covid variants will emerge. I can see a case for the Rolls-Royce share price going either way in the remainder of 2021. And, though Rolls is a company I have long admired, I will wait and see. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares The Rolls-Royce share price is rising. Should I buy shares now? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? appeared first on The Motley Fool UK.
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  12. Will the Rolls-Royce share price rise in July? (25/06/2021 - The Motley Fool UK)
    The Rolls-Royce Holdings (LSE: RR) share price has been grounded over the last year. As I write, the aero engine firm’s shares have risen by just 5% since June 2020. That leaves them well behind the 15% gain delivered by the FTSE 100 over the same period. I reckon investors have put Rolls in a holding pattern while they wait to see when air travel will really get started again. But with travel restrictions now being lifted more widely, will July be the month when the market takes a fresh look at Rolls-Royce shares? What do we know already? The last trading update from Rolls-Royce came in May. CEO Warren East said that flying hours during the first four months of 2021 were 60% below 2019 levels. This was pretty much as expected. Flying on long-haul routes has been supported by cargo demand and airlines preserving their airport slots by flying near-empty planes. East said that vaccination progress in the US and UK was “encouraging” but admitted the timing of a wider recovery was still “uncertain”. Rolls-Royce’s other business units were said to be performing as expected, with defence especially strong. A turning point? Rolls-Royce expects to start generating free cash flow “at some point during the second half of 2021.” When this happens will depend on how quickly engine flying hours recover, driving up billable revenue. I reckon this could be a key turning point for the Rolls-Royce share price. Free cash flow is essential to Rolls’ recovery. Without this, the group can’t start to repay debt. More widely, I think investors may be waiting to see if East can deliver on his free cash flow forecasts. Even before the pandemic, these targets were a key part of his turnaround strategy. The next trading update from Rolls-Royce is due on 5 August. I’ll be watching closely for any changes to the company’s forecasts. Rolls-Royce share price: up in July? At about 108p, Rolls-Royce stock has already risen by 170% from the lows of 40p seen when the company launched a £5bn refinancing last October. After such strong gains, is a recovery already priced into the shares? I estimate that Rolls-Royce’s current valuation is about 20% below the level seen at the end of 2019, including debt. If profits return to pre-pandemic levels, I can see some room for further share price gains. Broker forecasts also seem quite encouraging to me. Consensus forecasts for 2022 price Rolls’ stock on 25 times earnings. This multiple falls to 15 times earnings for 2023, when profits are expected to rise above 2019 levels. If international travel really takes off in July, then I think we could see Rolls-Royce’s share price move higher next month. However, I think a fair level of recovery is already priced into the stock. Any disappointments could cause the price to slump again. For this reason, I won’t be buying Rolls-Royce shares at current levels. I don’t think the potential rewards are big enough to outweigh the risks. The post Will the Rolls-Royce share price rise in July? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading Here’s why I’m avoiding Rolls-Royce shares Why is the Rolls-Royce share price having such an uncertain June? What’s going on with the Rolls-Royce share price? Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  13. Rolls-Royce shares: should I buy? (22/02/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares have had a lot of attention lately, but the stock has been falling. So if it has taken a hit, is now a buying opportunity? I think so and I’d buy Rolls-Royce shares in my portfolio.  Civil Aerospace I can’t deny that Roll-Royce’s main business, the Civil Aerospace division has been severely hit by the coronavirus pandemic. I think what makes it worse is that revenue from this business accounts for over 50% of the company’s total earnings. But what does the Civil Aerospace division do? In a nutshell, it manufactures and services engines for the airline industry. So it’s no surprise that it has been hit by the pandemic. Global restrictions have meant little travel travel, thereby having a knock-on effect on the need for Rolls-Royce’s services. Now that there’s a mass vaccination programme under way, I expect air travel to start recovering slowly. I reckon there’s pent-up demand for people to holiday abroad. This in turn should start having a positive impact on Rolls-Royce shares. In its December trading update, Rolls-Royce reported that the Civil Aerospace business is gradually recovering. The number of large engine flying hours at the time was 42% of 2019’s level. While no one can predict the shape and timing of the recovery in air traffic, Rolls-Royce expects travel to pick up in the second half of 2021. By this time, I’d expect vaccines to have been rolled out a significant portion of the UK and global population Liquidity During the coronavirus crisis, Rolls-Royce improved its liquidity position. It raised money from a rights issue, and secured additional loans, as well as drawing on its existing cash reserves. Rolls-Royce took further measures by implementing cost-cutting measures and disposing of certain assets. To me, these steps have not only made the firm leaner but have also strengthened the balance sheet. According to its latest update, Rolls-Royce has access to £9bn in liquidity. It forecasts £2bn in cash outflow for 2021. For now, I reckon it can weather the storm and I’d buy the shares. Risks I think the biggest risk right now facing Rolls-Royce share is that no one knows how long this pandemic and restrictions will persist for. If this crisis drags on, this may place a strain on the business and liquidity reserves. Furthermore, if air travel doesn’t pick up in the second half of 2021 then Rolls-Royce may have to raise further capital. Another round of financing may not be well received by investors and could impact the share price. Defence business Clearly, I don’t think all is lost with Roll-Royce shares. I believe investors have become fixated on the company’s Civil Aerospace business and have forgotten that it has other divisions as well. In fact, I’d like to highlight its Defence business, which accounts for 20% of earnings. What I like about Rolls-Royce shares is that the defence business throughout the pandemic has been resilient. The company has defence contracts with the UK and US governments. It also has a strong order book and 2021 forecast sales are well covered. For now, I’m happy with the stable revenue visibility from this division.  “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: should I buy? appeared first on The Motley Fool UK.
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  14. Rolls-Royce share price: can it go back up to 200p? (12/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) faced big challenges in 2020, and its full-year results released Thursday only confirm that. Interestingly though, the Rolls Royce share price has risen, presumably on the news.  Why the Rolls-Royce share price is up I think the Rolls-Royce share price rose for two reasons.  One, poor results were already priced in. Support services to aviation is the big revenue source for RR. Since travel in 2020 was restricted, RR was bound to feel the impact. The company’s updates have been reflecting this. So have weak trends in the Rolls-Royce share price.  Two, times are changing. The worst of the pandemic now seems to be behind us. And travel is expected to be back soon. Rolls-Royce will be back in business, because of this.  Optimism about this recovery is evident in RR’s outlook. It says “Looking ahead over the next couple of years….we expect the rebound in global GDP and lifting of travel restrictions to drive our recovery”.  According to the International Monetary Fund, global growth will be 5.5% in 2021 after a fall in world output in 2020. It is expected to rise by another 4.2% in 2022.  This can bode well for RR, which expects hours flown by its engines to increase to 80% of the levels seen in 2019 by 2022. This is a big jump in the 55% levels expected for 2021.  Why the RR share price can cross 200p This is somewhat encouraging and I think it can increase RR’s share price further. The Rolls-Royce share price is presently at 115p, which is already an increase of around three times from the lows we saw last year.  I think it may well be possible now that the RR share price can rise back up to its pre-pandemic levels of 200p and above. Besides the improving environment for RR and its outlook, I think there are two other reasons it can happen.  One, other coronavirus and lockdown impacted stocks like Lloyds Bank and Cineworld have recently seen a jump in their share prices back up to pre-pandemic times. For investors still looking for post-market crash bargains, RR is still among them. Two, the US government just passed a massive fiscal stimulus of $1.9trn. If these funds are indeed spent in the manner intended — to improve infrastructure and economic wellbeing that creates higher consumption — we could see a boom in US growth. This in turn, will impact the rest of the world positively. Moreover, it could mean another stock market rally, which could raise share prices across the board, including the Rolls-Royce share price.  A word of caution Much can still go wrong. The pandemic is not over. The threat of coronavirus variants still lurks. Further, RR’s financials are weak and will take their own time to recover. This adds to the fact that RR was in an uncertain place even earlier.  Attractive as the Rolls-Royce share price might look for the near future, I would consider the downside too before making a long-term investment in the stock. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares The Rolls-Royce share price is rising. Should I buy shares now? Tesla has fallen 35%. How I think it affects the Rolls-Royce share price Manika Premsingh has no position in any of the shares mentioned. The Motley Fool UK has recommended Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: can it go back up to 200p? appeared first on The Motley Fool UK.
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  15. Rolls-Royce share price: I think we’ve seen the bottom (14/03/2021 - The Motley Fool UK)
    The Rolls-Royce Holdings (LSE: RR) share price has fallen by 25% over the last year. The stock is still down by 50% from its pre-pandemic levels. I’m not surprised the shares haven’t recovered fully. Rolls’ revenue fell by 37% last year and the group reported a £3.2bn loss. However, CEO Warren East has taken decisive action to raise cash and restructure the business. I expect these efforts to pay off, supporting a strong recovery over time. Now that the future looks more secure, should I buy Rolls-Royce shares? I’ve been taking a fresh look. What I learned from Rolls’ results Rolls’ best-known business is its civil aerospace division, which makes and supports jet engines for airliners. With most airlines grounded for much of last year, flying hours were down by 57%. Revenue from this business fell by 37%, leading to a £2bn operating loss. However, civil aerospace is only one part of this large business. I believe the other parts of the group could help support Rolls-Royce’s share price as the business recovers. The biggest contributor to profits last year was Rolls’ defence division. This business generated an underlying operating profit of £448m in 2020, up by 8% from 2019. Defence activity hasn’t really suffered in the pandemic, providing great stability. Another source of profits was the power systems operation. This makes engines for ships and other industrial markets. Power systems generated an underlying profit of £178m in 2020. Although this was 50% lower than in 2019, Rolls says demand is already recovering. Finally, the ITP Aero business, which makes parts for jet engines, delivered a £68m profit. Rolls-Royce is actually trying to sell ITP Aero at the moment and says it’s in conversations with a number of buyers. I’d guess they’ll be reassured by the ongoing profitability of this business, which is supported by defence revenue as well as civil aviation. Rolls-Royce share price: is it cheap? Although Rolls’ stock is still trading 50% below pre-pandemic levels, I’m not sure how cheap it really is. The reason for this is that the company issued 6.4bn new shares last year when it raised £2bn in a rights issue. This rescue fundraising increased Rolls’ total share count from 1.9bn to 8.3bn. The number of shares issued by a company is important when calculating earnings per share. Even if the total profit is flat, earnings per share will fall if new shares are issued. This is known as dilution. Rolls-Royce reported an underlying profit of £306m in 2019, giving underlying earnings of 15.9p per share. I estimate that earnings would fall to just 3.7p per share if the same profit was generated today. At the time of writing, Rolls-Royce’s share price is 114p. This values the stock at 30 times 2019 earnings, after dilution. Broker forecasts for 2022 suggest that next year’s profits will be at a similar level to 2019. That means the stock is valued on 30 times forecast earnings, too. For me, that isn’t cheap enough. Although I expect Rolls’ profits to rise above this level in the future, I don’t want to pay too much for future growth. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: I think we’ve seen the bottom appeared first on The Motley Fool UK.
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  16. Is the Rolls-Royce share price heading to 175p? (13/08/2021 - The Motley Fool UK)
    Jet engine specialist Rolls-Royce Holdings (LSE: RR) has edged ahead of the market over the last 12 months, gaining 19%, versus a 15% rise for the FTSE 100. But the Rolls-Royce share price is still a long way below its pre-Covid levels. The good news is that things are improving. Rolls reported a profit for the first half of 2021. Management says the group is on track to start generating surplus cash during the second half of the year. With the stock hovering around 110p, I’ve been wondering if it’s the right time to buy. Getting back to normal? It’s probably a bit soon to suggest Rolls-Royce is back to normal. But I’m sure chief executive Warren East has now put the foundations into place for a successful recovery. Businesses being targeted for disposal should raise £2bn to help repay debt. Cost savings are expected to total more than £1bn by the end of this year. In the meantime, the group has access to up to €7.5bn in cash, if needed. Of course, companies can’t simply cut their way to growth. Rolls is still investing in developing its existing engines and in zero emission technology for the future. Operationally, the company’s defence business has delivered stable profits throughout the pandemic. In civil aerospace, which has been hit hard by travel restrictions, the company says private jet and domestic flying activity has already returned to 2019 levels. International travel is lagging behind, but Rolls says that, in total, large engine flying hours reached 43% of 2019 levels during the first half of the year. How high can the Rolls-Royce share price go? I expect the global aviation market to gradually return to normal over the next two years. Rolls-Royce’s profits should follow. Broker forecasts suggest the group will report a pre-tax profit of £373m in 2021. Analysts expect this figure to rise to £591m in 2022 and to £807m in 2023. With Rolls-Royce shares trading at around 110p, as I write, these price the stock on 22 times 2022 forecast earnings, falling to a multiple of 15 times earnings in 2023. I think there’s still some room for growth, on a medium-term view. If I bought Rolls-Royce shares today, I’d probably hope for a price of 150p, over time. Unfortunately, I think 175p may be a little too high. Although that’s still a long way below the 230p share price seen before the pandemic, we have to remember that Rolls-Royce has issued a lot of new shares over the last year. Issuing new share causes dilution — future profits must be divided among a larger number of shares. This means that future earnings per share are likely to be lower than in the past, even if profits recover. Lower earnings per share mean a lower share price, based on the company’s historic valuation levels. Would I buy Rolls-Royce shares at today’s price? Possibly. I think it’s a good business with valuable technology and a big share of the long-haul aviation market. It’s a stock I’d be happy to own. The post Is the Rolls-Royce share price heading to 175p? appeared first on The Motley Fool UK. Our 5 Top Shares for the New “Green Industrial Revolution" It was released in November 2020, and make no mistake: It’s happening. The UK Government’s 10-point plan for a new “Green Industrial Revolution.” PriceWaterhouse Coopers believes this trend will cost £400billion… …That’s just here in Britain over the next 10 years. Worldwide, the Green Industrial Revolution could be worth TRILLIONS. It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Access this special "Green Industrial Revolution" presentation now More reading Why I think the Rolls-Royce share price can rise more 3 reasons why the Rolls-Royce share price jumped 10% last week The Rolls-Royce share price jumped this week. Would I still buy? Rolls-Royce shares: 3 reasons why I’d buy Are Rolls-Royce shares now a bargain? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  17. I’d buy Rolls-Royce shares despite the big 2020 loss (17/03/2021 - The Motley Fool UK)
    I’ve been bullish on Rolls-Royce (LSE: RR) shares for sometime. Last week the FTSE 100 stock released its 2020 full-year results and I can’t say I was too surprised with what the company reported. I think most of the bad news is out in the open for Rolls-Royce shares. And from here, the company and share price are likely to recover so I’d buy the stock. But here’s what I drew from its recent results. Big hit 2020 wasn’t a great year for Rolls-Royce. Revenue and profitability took a big hit. In fact, total sales were down 24% to £11.8bn. The company also suffered a £4bn loss over the year, which included a £1.7bn finance charge. To be honest, I’m not shocked by the big negative numbers. Investors knew Rolls-Royce’s situation was struggling last year and understandably so given the pandemic. It’s no surprise to me that the Civil Aerospace division suffered the worst impact. Rolls-Royce’s largest business took a nose-dive because of Covid-19 travel restrictions. Its revenue just dried up, which was reflected in the results. But I’ll stop with the negative news now and turn to the reasons why I’d buy Rolls-Royce shares. Liquidity Last year, Rolls-Royce took big steps to improve its liquidity position. It raised money through a rights issue and put further credit facilities in place. So at the end of its 2020 financial year, Rolls-Royce had access to a grand total of £9bn in liquidity, including £3.5bn in cash and £5.5bn in undrawn credit. It expects a cash outflow of £2bn in 2021. This is weighted towards the first half of the year before Rolls-Royce expects cash flow to turn positive at some point in the second half of this year. What I take from this is that the company has enough money to weather the storm in the short term. By my calculations, there’s a wiggle room of £7bn in liquidity provided that things continue as expected. Power Systems & Defence divisions The Power Systems and Defence divisions held up well last year. Both businesses accounted for 23% and 29% of Rolls-Royce 2020 full-year revenue respectively. I’ve mentioned this before, but the Defence business provides Rolls-Royce with some revenue stability and visibility. So I’m not surprised, given that revenues took a hit in 2020, that the Defence division accounted for a larger portion of sales. In 2019, this same division only accounted for 20% of revenue. What I think is pleasing to see is that the Defence business has 90% order cover for 2021. The company also predicts steady growth from this division into the medium term. My view Rolls-Royce is highly dependent on the lifting of travel restrictions and the vaccine rollout. Any delays or setbacks mean a further impact to revenue and profitability. This could also place pressure on liquidity and it may need to raise more money, which would be negative for the shares. I recognise that the recovery from the pandemic will take time and I don’t think the dividend will resume any time soon. But I’m still optimistic about the prospects for Rolls-Royce shares. I think the worst is over for the company and hence I’d buy now. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying FTSE 100 stock watch: will the Rolls-Royce share price recover? Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post I’d buy Rolls-Royce shares despite the big 2020 loss appeared first on The Motley Fool UK.
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  18. Will the Rolls-Royce share price soar in May? (02/05/2021 - The Motley Fool UK)
    I can’t resist an interesting turnaround stock. Right now, they don’t get much bigger or more interesting than Rolls-Royce (LSE: RR), whose share price has doubled since October. Unfortunately, the aero engine maker’s performance hasn’t been so good over longer periods. Rolls-Royce stock is flat on a year ago, and down by 60% over three years. With a return to normal now on the cards in many parts of the world, should I consider buying some Rolls-Royce shares for my Stocks & Shares ISA? A turning point? Rolls-Royce sells jet engines for airliners, but it makes most of its profits from aftersales maintenance and support services. When aircraft are grounded, airlines don’t need these services because the engines aren’t in use. However, that situation is starting to change. Aero engineer Meggitt reports that domestic flying in markets such as the US and China has already rebounded strongly. Here in the UK, the government is expected to start lifting restrictions on travel to Europe in May. It’s all good news. The only catch is that most of the routes opening up now are short-haul flights. Rolls-Royce engines are generally fitted to larger wide-body aircraft that are reserved for long-haul routes. Rolls-Royce isn’t expected to return to profit until 2022. But the stock market always looks forward and I think we’re at a turning point. In my view, the outlook for Rolls-Royce will start to improve during the second half of this year. What if we stop flying? Rightly or wrongly, I don’t think environmental concerns will stop people returning to the air. Video conferencing is useful, but it’s no substitute for face-to-face business meetings with new people. Likewise, you can’t lie on the beach or visit foreign cities on Zoom. For these reasons, I believe Rolls-Royce will see a gradual return to normal over the next couple of years. The pandemic has been painful for this FTSE 100 stalwart. But I think the changes made over the last year are likely to support stronger profits in the future. The only concern I have about buying Rolls-Royce shares now is whether the price is right. Rolls-Royce share price: too high or too low? All the most successful investments I’ve made have had one thing in common. I’ve bought the shares at the right price. So how does Rolls-Royce stack up today? On a short-term view, Rolls-Royce still looks fully priced to me. Broker forecasts suggest earnings of 4p per share in 2022. This prices the stock on 25 times forecast earnings. However, earnings are expected to rise to 7.2p per share in 2023, which values Rolls on a more modest 14 times forecast earnings. I can also see another attraction. The company hopes to start generating free cash flow (surplus cash) from its operations during the second half of 2021. CEO Warren East is targeting annual free cash flow of £750m in 2022, or soon after. I reckon this will be enough to allow the group to start paying back some of the loans it’s used to survive the pandemic. To be honest, I don’t know whether the Rolls stock will rise in May. But, on a longer-term view, I’d be comfortable buying Rolls-Royce while the share price is around 100p. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading FTSE 100 shares: 3 I’m considering for my ISA The Rolls-Royce share price is falling: should I buy now? The Rolls-Royce share price has fallen. Should I buy? Rolls-Royce share price: what’s in store in the coming months? As the Rolls-Royce share price falls, I’m still buying Roland Head has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Zoom Video Communications. The Motley Fool UK has recommended Meggitt. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Will the Rolls-Royce share price soar in May? appeared first on The Motley Fool UK.
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  19. Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 (17/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) shares have enjoyed a decent start to 2021. The share price is up around 15%, over a period when the FTSE 100 index is only up around 3%. This outperformance has coincided with the release of full-year results, the UK vaccination initiative gaining momentum, and other factors. Over a broader one-year period, the share price is still down over 50%, but I think there are several reasons to be more optimistic for 2021. Full-year results The first reason I’m optimistic for Rolls-Royce shares might sound strange. It’s actually relating to the full-year results that came out last week. The loss before tax was £2.9bn, an exceptionally large figure. Even though this figure was well-reported in the news, Rolls-Royce shares traded sideways on the release date.  Normally I’d expect a share price to plummet on such a bad figure, but it got me thinking. Rolls-Royce shares are already heavily down from 2020. Regular trading updates made investors aware of the bad situation within the company. So really, it was no surprise when the final figure came out. In effect, the share price didn’t fall because it was expected. So if I can discount the loss, what else was there to think about? Well the company cut £1bn in costs during the year. It raised £7.3bn in new capital, and expects to generate £2bn from selling off different assets. From that angle, 2021 looks positive.  A second reason I’d look to buy Rolls-Royce shares is the diversification of the business. For a while, I thought of the business only operating in the civil aviation space. Although this is the largest area, it’s not the only one. The results showed that good profits were made from its power systems and defense arms. In fact, the revenues generated from these two areas combined were larger than from civil aerospace. Going forward into 2021, if these areas can continue to grow, and civil aerospace recovers, Rolls-Royce shares could see a strong move higher. The business would be firing on all fronts, something it hasn’t been able to do in the recent past. Sentiment helping Rolls-Royce shares The final reason I like Rolls-Royce shares is the correlation between positivity and the rising share price. When I mean positivity, I’m talking about the sentiment regarding the pandemic. Here in the UK, the vaccination rollout is marching on. In the US, President Biden has also set out an ambitious timeframe to get people vaccinated. The more this continues, the quicker international travel and flying will start again. On balance, there are still reasons to be cautious with the stock. For example, the impact of the pandemic is likely to linger for some time. It’s not as though anyone can click their fingers and restore the billions lost in 2020 overnight. It’s going to be a slow road to recovery, and one that could weigh on Rolls-Royce shares for a while still to come. As a long-term investor, I can look past this. I would look to buy the stock, even with the knowledge that the recovery won’t be overnight. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading I’d buy Rolls-Royce shares despite the big 2020 loss Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom I’m tempted by the Rolls-Royce share price. Here’s why I’m not buying jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 appeared first on The Motley Fool UK.
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  20. 3 reasons why I’d buy Rolls-Royce shares today (01/09/2021 - The Motley Fool UK)
    Over the last few months, I’ve been gradually getting more interested in jet engine specialist Rolls-Royce Holdings (LSE: RR). I’m now considering buying its shares for my portfolio. Ready for recovery Rolls-Royce operates a pay-as-you-go business model. The firm’s jet engines are sold at a loss and the company makes money from servicing and repairs, which are linked to flying hours. This model went badly wrong last year when airlines were forced to ground their fleets. But in more normal times, I think this business should generate reliable, predictable revenues. Flying levels are recovering. The company said large engine flying hours rose to 43% of 2019 levels during the first half of this year, up from 34% during the second half of 2020. Unfortunately, many of the remaining Covid-19 travel restrictions affect the long-haul routes flown by wide-body airliners. Around 50% of these use Rolls-Royce engines. This is delaying the group’s recovery, but I can’t see any reason why air travel won’t gradually return to normal over the next couple of years. As this happens, I think Rolls-Royce shares should perform well. Boardroom refresh In October, Rolls-Royce will get a new chairperson. Anita Frew will replace Sir Ian Davis, who’s been in the role for nine years. Frew is currently chair of FTSE 100 chemicals group Croda International, whose share price has risen by 170% over the last five years. I regard Croda as a very good quality business, so I’d be happy for some of the same fairy dust to be sprinkled over Rolls-Royce. More realistically, of course, turning Rolls around is likely to be a hard slog. I’m also a little concerned that Frew may be spreading herself too thinly. As far as I can tell, she plans to remain chair of Croda after she takes up the Rolls-Royce position in October. She’s also a non-executive director at mining giant BHP Group. That’s a lot of big roles, in my view. Rolls-Royce shares: cheap? In my experience, even the best share is only a good buy at the right price. Rolls-Royce’s has risen by 60% over the last year, but remains below pre-pandemic levels. Broker forecasts suggest the group will return to profitability next year. Analysts’ consensus estimates price the stock on 22 times 2022 forecast earnings, falling to 15 times in 2023. I think this looks like a reasonable entry point to start buying. Of course, there are still some risks. Chief executive Warren East needs to deliver on his target of strong cash generation. This will be needed to start reducing the group’s £4.9bn net debt. Rolls also needs to invest in projects that will deliver a viable path to net zero. Work is underway on electric and hydrogen power solutions. But at this early stage I think there’s a risk Rolls-Royce could be left behind by smaller and more innovative competitors. No investment’s guaranteed. But for the next few years, I’m pretty confident we’ll see Rolls-Royce’s business return to normal. In my view, this should lead to several years of rising earnings. That’s why I’d consider buying Rolls-Royce shares today. The post 3 reasons why I’d buy Rolls-Royce shares today appeared first on The Motley Fool UK. Our 5 Top Shares for the New “Green Industrial Revolution" It was released in November 2020, and make no mistake: It’s happening. The UK Government’s 10-point plan for a new “Green Industrial Revolution.” PriceWaterhouse Coopers believes this trend will cost £400billion… …That’s just here in Britain over the next 10 years. Worldwide, the Green Industrial Revolution could be worth TRILLIONS. It’s why I’m urging all investors to read this special presentation carefully, and learn how you can uncover the 5 companies that we believe are poised to profit from this gargantuan trend ahead! Access this special "Green Industrial Revolution" presentation now More reading I’ll buy Rolls-Royce shares when this happens Will the Rolls-Royce share price rise higher in September? Top British stocks for September The Rolls-Royce share price is climbing again. Here’s what I’d do Is the Rolls-Royce share price a value trap? Roland Head has no position in any of the shares mentioned. The Motley Fool UK has recommended Croda International. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  21. What do the Rolls-Royce results mean for its share price? (05/08/2021 - The Motley Fool UK)
    Aeronautical engineer Rolls-Royce (LSE: RR) issued its interim results today. They cover the first half of the financial year. Why does that matter for the Rolls-Royce share price? In short, the City sees the Rolls-Royce results an up-to-date indicator of business health, with clues to how the business may perform in the future. Here I explain what that might mean for the share price. The big issue: free cash flow I previously flagged that the main thing I would be looking for in today’s Rolls-Royce results was any update on its expectation of turning free cash flow positive in the current half. That matters because liquidity concerns dogged the shares last year. Issuing new shares to boost liquidity was one reason Rolls-Royce shares fell last year, as it diluted existing shareholders. That is an ongoing risk with a capital intensive business such as Rolls-Royce. Being free cash flow positive matters because it means that there is more hard cash coming in the door than going out. That provides a stronger liquidity cushion for a company. In the results, Rolls-Royce again reiterated its target to turn free cash flow positive this half. It said explicitly, “We continue to expect to turn free cash flow positive sometime during the second half of this year”. Negative free cash flow in the past six months stood at £1.2bn, which is a sharp drop from last year. So the company expects negative cash flow to keep falling until it reverts to being positive. I think management credibility now depends on delivering this target as it has stated it so often. I think turning free cash flow positive could help boost the Rolls-Royce share price. Rolls-Royce results show a return to profit While cash flow is critical, the accounting concept of profit also matters in assessing a company’s prospects. In the half, Rolls-Royce recorded a profit of £393m, versus a huge loss of £5.4bn in the equivalent period last year. That equates to earnings per share of 4.7p. If that is maintained in the second half, it suggests that the company is currently trading at a prospective price-to-earnings ratio of around 11 or 12. That is fairly low so, following the Rolls-Royce results, I see upside potential for the shares. However, the valuation may reflect ongoing risks. For example, while aviation demand is returning, it is doing so in fits and starts. That means that the first half performance won’t necessarily be repeated in the following six months, for example if new travel restrictions are put in place. No dividend in the Rolls-Royce results The company did not announce any interim dividend. That is not surprising to me, as the company is still in a recovery phase. It makes sense to keep as much money as possible in the business while it rebuilds. Even if the company wanted to pay a dividend, it wouldn’t be allowed. A loan it drew down during the first half precludes it from paying any dividends until 2023. Rolls-Royce results summary There was much positive news in the results, including a recovery in revenues and profits. I think the repeated target of returning to free cash flow in the current half is significant. I expect the results to be well-received, which could help boost the Rolls-Royce share price. The post What do the Rolls-Royce results mean for its share price? appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading The recovery at Rolls-Royce is happening! Should I buy the shares now? Will this news help get the Rolls-Royce share price moving? The Rolls-Royce share price zooms past 100p. What’s next? Will the Rolls-Royce share price rise in August? Can the Rolls-Royce share price return to pre-pandemic levels? Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  22. The Rolls-Royce share price is rising this week. Should I buy? (18/02/2021 - The Motley Fool UK)
    For years, I’ve liked Rolls-Royce (LSE: RR), but I’ve never got around to buying. Whenever the time came for me to make an investment, Rolls never quite made the top of my list. Maybe the Rolls-Royce share price looked a bit too high at the time. Or, more usually, there’s just something else I liked better. Warren Buffett famously spoke of investing in Gillette, and the warm feeling he got every morning when he thought of the millions around the world shaving with a new blade. I’ve always had similar feelings watching airline departures and arrivals. And thinking of all those lucrative maintenance contracts bringing in the cash for Rolls-Royce. But no comparison is perfect. Chins are still being shaved around the world during Covid lockdown. But the planes aren’t flying, and the Rolls-Royce share price has suffered. We’ve seen a modest climb this week though. Since market close last Friday, Rolls-Royce shares are up 8%, as I write. But I’d never make an investment decision based solely on short-term share price moves. And the bigger picture isn’t so pretty. Feeling bullish We’re close to a year on from the start of the Covid-19 stock market crash. And, in that year, the Rolls-Royce share price has fallen 58%. But it had been slipping even before that. Over the past two years, Rolls-Royce shares are down 70%. So we’re looking at a pandemic catastrophe on top of an existing downward trend. So why am I starting to feel positive towards the stock? Well, my reason is essentially that I still see the long-term business as sound. When Rolls-Royce will get back to profit, I really can’t guess. And I still expect the rest of 2021 to be rocky for the Rolls-Royce share price. Then there’s the huge amount of debt the company’s had to take on, amounting to around £4bn now. That will have to be addressed some day. But, for now, the key question is whether Rolls will make it through the rest of this crunch year. The firm’s latest update at the end of January essentially said things are in line with expectations. Rolls expects free cash outflow of around £2bn in 2021, and I could see a few eyes watering at the prospects of that. But at the end of 2020, the company had around £9bn in liquidity — which it described as “at the upper end of the previously guided range.” Rolls-Royce share price cheap? Rolls-Royce is hoping for an upturn in the aviation business in the second half of the year. And that’s where I think the big risk lies. The Covid vaccination programme is progressing reasonably well. But there almost seems to be a new virus variant every week. And the government is still urging against booking fly-away holidays just yet. Still, with the Rolls-Royce share price around £1, or less, I really am tempted to buy. But I still don’t know whether I will. Again, it’ll depend on what other options might look more promising when the time for my next purchase comes along. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading The Rolls-Royce share price is under £1: should I buy today? What I think Covid-19 variants mean for the Rolls-Royce share price Rolls-Royce share price: why I’d follow the Archer Aviation SPAC Rolls-Royce and Cineworld: are these UK shares too risky to buy now? The Rolls-Royce share price is down 66% this year. Here’s what I’d do now Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising this week. Should I buy? appeared first on The Motley Fool UK.
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  23. Rolls-Royce shares: 1 reason to buy and 1 reason to sell (11/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) was one of the companies hardest hit by last year’s stock market crash. It didn’t really partake in the late 2020 recovery either. And the Rolls-Royce share price is still down around 65% over the past two years. Pandemic meant lockdown, lockdown meant nobody flying. Nobody flying meant no aircraft engine maintenance. Well, there was some, but well below normal levels. But with the end of Covid restrictions moving ever closer, many are heading off on their hols again. And that’s my chosen reason I’d think of buying Rolls-Royce shares. In a recovery situation, I want to see a troubled company’s business starting to pick up again. Or, at least, strong indications it’s about to happen any day now. I’m hoping we’ll see some hard evidence of recovery with first-half results, due on 5 August. Rolls-Royce share price: ready for the rebound? I think we might see a spark of interest in the Rolls-Royce share price in the days leading up to that. But in the meantime, I’m buoyed by the firm’s AGM statement from May. Chief executive Warren East said: “Looking ahead, we are confident that the significant restructuring actions we have taken in 2020 will deliver permanent cost reductions, positioning us well for the rebound in international air travel.“ So we have a leaner and more cost-efficient Rolls-Royce now, and that’s maybe not a bad thing anyway. I’ve always liked the company ,and from this direction it looks like a ‘buy’. But what’s the other angle, and why might I rate it a sell? In a word, cash. Rolls-Royce needed to take on a whole new financing deal just to keep going. Part of that involved raising around £2bn from disposals. But the company also raised £7.3bn from new debt and equity. That was in a year that resulted in a pre-tax loss of £2.9bn, and a free cash outflow of £4.2bn. Share price valuation Those are scary, scary numbers. And they make all previous valuation metrics utterly meaningless. With the degree of restructuring that’s been needed, we’re essentially looking at an an entirely new version of Rolls-Royce now. And it’ll surely take some time for markets to settle on a sensible long-term valuation. It’ll definitely take me some time to work out where I think the Rolls-Royce share price should be. I can’t see things settling this year. The company said it’s targeting positive free cash flow in the second half of 2021. And it hopes to reach at least £750m by 2022. If that comes off, my confidence will be boosted. But there’s still significant risk here. And my biggest fear is that the cash could run out and Rolls-Royce might need further financing. If that happens, a resulting combination of more debt and more equity dilution would throw all valuation measures further up in the air again. Hopefully, we’ll get a clearer idea of how the financial picture is looking once we have those H1 figures. Until then, I’m just watching. The post Rolls-Royce shares: 1 reason to buy and 1 reason to sell appeared first on The Motley Fool UK. Is this little-known company the next ‘Monster’ IPO? Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead. Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025. The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential. But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving. Click here to see how you can get a copy of this report for yourself today More reading Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Where will the Rolls-Royce share price go in July and beyond? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  24. Should I buy Rolls-Royce shares for my portfolio today? (25/03/2021 - The Motley Fool UK)
    It seems that everywhere I look, people are talking about Rolls-Royce (LSE: RR) shares, and so I’m not surprised to see that it is one of the most popular traded companies in the UK right now. Up until mid-March, the Rolls-Royce share price had soared by almost 25%. However, since then the company’s shares have almost given up those gains, falling more than 17% as of market close on March 24. Over the last 12 months, they are down by almost 25% at the time of writing. However, I agree with my Foolish colleague Christopher Ruane that the Rolls-Royce share price will reach 150p this year, but following this dip, should I buy the stock for my portfolio today? Why are Rolls-Royce shares falling? Its share price began declining immediately following its full-year 2020 financial earnings release earlier this month, which revealed that: Total sales fell 24% to £11.8 billion. Total losses accrued to £4 billion. It suffered a £1.7 billion finance charge. I wasn’t too surprised to see that things hadn’t gone very well for the aerospace company. After all, its biggest business segment, Civil Aerospace, took a nosedive thanks to Covid-19-induced travel restrictions. This is still a major risk for Rolls-Royce shares going forward, as there is no guarantee that life will return to normal any time soon (although these two top FTSE stocks that I’m buying before the summer will certainly be relying on such an event). However, with major European markets such as Germany and France reporting rising coronavirus cases in the past month, there is a very real threat to Rolls-Royce’s share price if the situation should deteriorate. Should I buy the stock? I don’t think that Rolls-Royce shares will be able to stage a major comeback this year if lockdown restrictions and vaccination levels don’t go as currently planned, which is far from guaranteed, so I am under no illusions that I am taking a risk by adding it to my portfolio. But I am going to take that risk anyway as Rolls-Royce’s share price continues to fall. Call me an optimist, but I’m still hopeful that widespread reopenings and some return to normalcy will return as 2021 drags on. And, at the end of the day, the company is still one of the world’s leading manufacturers and maintenance providers for aircraft engines — a job that I believe will be in high demand when reopenings come. What excites me in relation to the Rolls-Royce share price is the amount of maintenance that will be required once more planes get back in the air. To put how important this maintenance revenue is for Rolls-Royce into perspective, the company sold £3.2 billion of civil aircraft engines in 2019 but recorded a further £4.9 billion in service revenues for the sector. Even in 2020, with Covid-19 severely limiting flights worldwide, service revenues came in at £2.8 billion. Even taking away the fact that the company’s defense revenue actually grew by 4% to £3.4 billion last year, I expect the Rolls-Royce share price to grow even further when the thousands of currently grounded planes around the world suddenly need inspections before hitting the skies once more. I think that Rolls-Royce shares are a bargain for my portfolio today. as I expect its share price to grow as normality returns.  FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price reach 150p this year? Can management use technology to boost the Rolls-Royce share price? Can the Rolls-Royce share price surge if it overcomes this huge trend? Rolls-Royce shares are nudging higher. Should I buy now? Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 Jamie Adams has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Should I buy Rolls-Royce shares for my portfolio today? appeared first on The Motley Fool UK.
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  25. FTSE 100 stock watch: will the Rolls-Royce share price recover? (13/03/2021 - The Motley Fool UK)
    FTSE 100 aerospace company Rolls-Royce Holdings (LSE:RR) experienced a £4bn loss in 2020. But reassuringly it has told the BBC “the worst is behind us“. So, does that mean it’s onwards and upwards for the Rolls-Royce share price? The £4bn loss is a particularly hefty kick in the teeth after posting a £583m profit the year before. But considering the impact of the Covid crisis on the business, I’m surprised the Rolls-Royce share price hasn’t suffered more. It’s down 38% in a year, but up 25% in a month. Loyal shareholders seem to keep the long term in mind, although the price is subject to considerable volatility. Rolls-Royce revenue risks Unfortunately, Rolls-Royce has never faced such revenue risks as the pandemic has brought to its door. It’s already laid off 7,000 employees and could cut another 2,000 in the coming months. Plus it expects a further £2bn cash burn in restructuring costs. The main risk to its income is air travel. It profits from servicing aircraft engines, unfortunately the pandemic stopped flying activity and slashed revenues. Rolls-Royce has already issued shares to raise additional cash and plans to dispose of assets too. However, Norway recently postponed the €150m sale of its Norwegian division on security grounds. Its defence operations enjoyed an 8% rise in 2020 profits, but sadly accounted for under 30% of the group’s total revenue. So that gain didn’t do much to make up for the extensive losses in its civil aerospace arm. But with vaccine uptake throughout the world, the signs of air travel recovery are getting stronger. Yet that’s still dependent on international agreements, passenger testing, and vaccine success. There’s also the worry that new virus variants could upend the vaccine success story. Long-term outlook The UK economy shrank less than expected in January, which is a reassuring sign. And PwC says 2021 will be a year of business reinvention. That’s something Rolls-Royce must do if it’s to have a long-term chance of survival. It’s certainly a focus for the group and it recently signed a deal with Scandinavian airline Wideroe, for a new electric aircraft to fly regional routes. As well as maintaining its existing customer base, it needs to spend on greener forms of propulsion, including batteries and hydrogen. That won’t come cheap. Rolls-Royce is a prestigious company with an impressive legacy and a lot to like. I’ll be surprised if it goes out of business, but I think the next few years will be tough. Is Rolls-Royce paying a dividend? Rolls-Royce isn’t paying a dividend and given the circumstances it finds itself in, I think that’s wise. The company used to pay a dividend, and I’m sure that will resume once it’s back in a position of strength. But that could be several years from now. It has £9bn of liquidity at its disposal, which should last two years. If it can weather the storm, it should emerge a much stronger, streamlined company, with a higher share price. But I think it will take years to achieve and it’s certainly a risky investment today. The company only makes significant income if planes are flying. This is expected to increase this year, but if it makes half what it did pre-pandemic, that will be impressive. Personally though, I won’t be adding Rolls-Royce shares to my Stocks and Shares ISA today. For regular stock market investing ideas and help choosing the best shares to buy now, sign up to The Motley Fool today. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price holds steady after big 2020 loss. Should I buy? Rolls-Royce share price: can it go back up to 200p? Why Rolls-Royce shares nudged higher today Can the Rolls-Royce share price keep climbing after today’s results? Rolls-Royce earnings: here’s what will help me decide to buy more shares Kirsteen has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post FTSE 100 stock watch: will the Rolls-Royce share price recover? appeared first on The Motley Fool UK.
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  26. Rolls-Royce in £189m asset sale to boost balance sheet (13/09/2021 - The Motley Fool UK)
    On Monday, Rolls-Royce (LSE: RR) announced the sale of its 23.1% stake in AirTanker Holdings Limited. The sale, to Equitix Investment Management Limited, should generate £189m in cash. The deal should complete in the first quarter of 2022. Rolls-Royce says it will use the cash to reduce net debt. AirTanker Holdings operates aircraft used to support air-to-air refuelling, air transport and other services for the Ministry of Defence. The planes are powered by Trent 772B engines, which Rolls will continue to service and maintain. Tom Bell, President Rolls-Royce Defence, described the sale as “another important step towards achieving our group target to generate at least £2bn from disposals, as announced last year, to help rebuild our group balance sheet in support of our medium-term ambition to return to an investment grade credit profile.” The latest move comes after a previous sale, announced by Rolls-Royce in August. The firm agreed to sell its Bergen Engines fuel business to Langley Holdings for €63m. At the time, Rolls also told us it was in discussions to sell its ITP Aero business. Rolls-Royce debt At 30 June, Rolls had net debt on the books of £3,083m (excluding lease liabilities). That was an almost doubling from the £1,533m figure at 31 December 2020, after the company reported free cash outflow of £1,151m in the half. At interim time, Rolls-Royce said it expects “to turn free cash flow positive sometime during the second half of this year“, adding that it hoped to stem total free cash outflow for the year at around £2bn. That’s less than half the firm’s 2020 outflow of £4.2bn. The post Rolls-Royce in £189m asset sale to boost balance sheet appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading What is the Rolls-Royce share price really worth? The Rolls-Royce share price has dropped. Would I buy it now? 3 reasons why Rolls-Royce’s share price could soar! 3 of the best FTSE 100 index shares to buy right now Why I think the Rolls-Royce share price is a bargain Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  27. Rolls-Royce shares are nudging higher. Should I buy now? (19/03/2021 - The Motley Fool UK)
    We’re all aware of the pandemic roller coaster that Rolls-Royce (LSE: RR) shares have been on through the last year. At just above 125p a year ago, they then peaked at just below 140p in June before dipping below 40p in October. The share price has certainly kept investors on their toes. However, is the worst behind it? Pandemic losses 2020 left Rolls-Royce with a loss of almost £4bn. Rolls makes the majority of its money servicing aeroplane engines, an industry largely curtailed by Covid travel restrictions. In an effort to reduce its cost base, the firm slashed 7,000 jobs, in line with what boss Warren East described as “the largest restructuring in our recent history”. In October 2020, 6.4bn new shares were issued in an emergency move to raise new capital. Shareholders were able to purchase 10 new shares at 32p each for every three shares they owned. Though this raised £2bn, Rolls-Royce shares halved in value as a consequence, slumping to a 15-year low. This also drastically reduced the earnings per share, a key valuation metric for stock performance. Pre-pandemic problems Rolls-Royce shares were troubled even before the pandemic. In 2019, the company had to fork out £800m to remedy ongoing durability problems relating to the Trent 100 engines. This raised the total cost of Trent engine problems to £2.4bn for 2017-2023. Rolls therefore upped spending to get grounded aircraft back in the sky. This put excess strain on cash flow, which was magnified tenfold when the pandemic struck. Rolls-Royce shares’ future outlook But while 2020 proved disastrous for Rolls-Royce shares, it’s not all bad news. The company is planning to construct 16 mini-nuclear power plants as part of its small modular reactor programme. It’s expected to receive £200m towards the project from the UK government. Projects like these are essential to the UK if it wants to reach its target of zero emissions by 2050. And with Covid restrictions easing daily around the world, the travel sector is poised for huge growth in coming years. This is good news for Rolls, as it expects hours flown by its engines to increase 80% by 2022. For example, TUI still has 2.8m holidays booked for this summer, which will be delivered by Boeing 787 Dreamliners. These planes are powered by Rolls-Royce Trent 1000 engines. Civil aerospace accounts for a dominant slice of Rolls-Royce business. However, Rolls-Royce Defence actually saw growth of 8% throughout 2020, generating an underlying profit of £448m. Also, its Spanish subsidiary ITP Aero, which manufactures niche aero engine and gas turbine parts, made £68m profits. These ventures may help bolster Rolls-Royce shares’ future value. My Verdict The aerospace sector was decimated by the pandemic. Though cost-cutting and restructuring did take place, the truth is the company’s balance sheet is still shaky at best. The pandemic still isn’t over and a sluggish restart of global travel could continue to dent the business, whose share price was declining even before 2020. While the current share price rise may look enticing, there’s still a lot that could go wrong. Therefore, I won’t be adding Rolls-Royce shares to my post-pandemic portfolio. One stock for a post-Covid world… Covid-19 is ripping the investment world in two… Some companies have seen exploding cash-flows, soaring valuations and record results… …Others are scrimping and suffering. Entire industries look to be going extinct. Such world-changing events may only happen once in a lifetime. And it seems there’s no middle ground. Financially, you’ll want to learn how to get positioned on the winning side. That’s why our expert analysts have put together this special report. If the pandemic has completely changed our lives forever, then they believe that this stock, hidden inside the tech-heavy NASDAQ, could be set for monstrous gains… Click here to claim your copy now — and we’ll tell you the name of this US stock… free of charge! More reading Rolls-Royce shares: 3 reasons why I’m optimistic for 2021 I’d buy Rolls-Royce shares despite the big 2020 loss Rolls-Royce share price: 2 reasons why I’d buy after earnings The Rolls-Royce share price is above 100p: what next? Rolls-Royce share price: I think we’ve seen the bottom Dylan Hood owns no shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares are nudging higher. Should I buy now? appeared first on The Motley Fool UK.
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  28. I’ll buy Rolls-Royce shares when this happens (30/08/2021 - The Motley Fool UK)
    Over the past few months, I have written about Rolls-Royce (LSE: RR) shares on several occasions. Whenever I have covered the company, I have consistently concluded that its future is too uncertain. As such, I have decided to stay away.  That does not necessarily mean that I will be avoiding the company forever. I think the coronavirus pandemic has dealt the business a significant blow over the past 18 months, but it is still a world leader in the aerospace engineering sector. And I think this advantage will be critical in driving the firm’s recovery in the years ahead.  The outlook for Rolls-Royce shares There are two things I want to see before I would be happy to buy shares in the aerospace company. First of all, I would like to see a sustained recovery in global air traffic. Rolls sells its engines at cost and earns money on maintenance contracts that are linked to flying hours. The longer a plane spends in the air, the more money the group is owed. Therefore, without a sustained recovery in global air traffic, the company’s sales and earnings will remain depressed. Rolls-Royce shares will not recover if earnings remain under pressure.  I also want to see a substantial pickup in demand for new aircraft. Airlines have been cancelling or postponing orders for new planes throughout the pandemic as they try to survive the crisis. This has understandably had a knock-on effect on the business. However, if carriers start to place new orders, we could see a sustained increase in the company’s sales and profits. This would almost certainly indicate the organisation is heading in the right direction.  In the best-case scenario, the world will begin to open up in 2022. Airlines will rush to make the most of pent-up consumer demand for travel and place new orders while bringing more planes back into service. And this jump in demand would translate into higher sales and profits for Rolls-Royce shares.  Risks and challenges Unfortunately, it is impossible to say at this stage when either of the above will happen. There are some signs that the aviation industry is recovering in the US, but the highly profitable transatlantic route is still virtually grounded. And the same goes for the rest of the international travel market. As these international routes are usually the most lucrative for airlines, they are unlikely to start placing new orders for aircraft until these routes are generating an income again.  At the same time, we do not know if or when another coronavirus variant will emerge and how dangerous this variant will be. A new variant could lead to renewed shutdowns, which would almost certainly set the group’s recovery back months and have a detrimental impact on Rolls-Royce shares.  So all in all, I would buy shares in the company when there is a sustained increase in air traffic activity. However, until we hit that point, I will be avoiding the stock.  The post I’ll buy Rolls-Royce shares when this happens appeared first on The Motley Fool UK. Inflation Is Coming: 3 Shares To Try And Hedge Against Rising Prices Make no mistake… inflation is coming. Some people are running scared, but there’s one thing we believe we should avoid doing at all costs when inflation hits… and that’s doing nothing. Money that just sits in the bank can often lose value each and every year. But to savvy savers and investors, where to consider putting their money is the million-dollar question. That’s why we’ve put together a brand-new special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… …because no matter what the economy is doing, a savvy investor will want their money working for them, inflation or not! Best of all, we’re giving this report away completely FREE today! Simply click here, enter your email address, and we’ll send it to you right away. More reading Will the Rolls-Royce share price rise higher in September? Top British stocks for September The Rolls-Royce share price is climbing again. Here’s what I’d do Is the Rolls-Royce share price a value trap? Could the Rolls-Royce share price hit £1.50? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  29. Could the Rolls-Royce share price hit £1.50? (20/08/2021 - The Motley Fool UK)
    Aeronautical engineer Rolls-Royce (LSE: RR) has had a challenging couple of years. With demand for aircraft engine servicing plummeting during the pandemic, the company saw profits collapse last year. The Rolls-Royce share price has had a rocky ride, but it’s shown signs of recovery lately and is up 25% over the past year. What’s next for the company and its share price? Here I consider whether it could climb to £1.50, around 35% above its current price. Business tailwinds The business has shown promising signs of gradual recovery. In its interim results this month, it turned a £1.6bn underlying operating loss in the first half last year to a profit of £307m this time around. It wasn’t all good news, by any means, and revenue slipped compared to the equivalent period last year. As demand for civil aviation continues to recover, there should be heightened demand for the company’s engine servicing. Airlines in recovery mode may also start to consider buying new aircraft, all of which need engines. One of the advantages Rolls-Royce has as a company is that only a few aircraft engine makers exist and the barriers to entry in the industry are high. That helps give Rolls-Royce pricing power. I think that could help it boost profits in years to come. The Rolls-Royce share price and cash flow One of the drivers for the Rolls-Royce share price is the company’s free cash flow. That is different to earnings. Earnings are purely an accounting measure but free cash flow tracks the amount of hard money coming into – or leaving – a business. Free cash flow helps boost liquidity. While Rolls-Royce has bled cash over the past eighteen months, the company expects to become free cash flow positive in the current half-year period. It maintained this estimate in its interim results, which I take as a sign of management confidence. Free cash flow positivity could help to boost the Rolls-Royce share price in my opinion. Last year the company diluted shareholders by issuing new shares to raise money. There is a risk that it could do so again if it needs more liquidity. But free cash flow will help its liquidity, strengthening the firm’s balance sheet. Valuing Rolls-Royce £1.50 may sound a long way from today’s Rolls-Royce share price, but I think it is possible for the stock to hit that price. It’s actually well below the level at which the shares entered the pandemic. Admittedly Rolls-Royce is a different business now, scarred by the plunge in demand in its civil aviation division last year. But as it shows signs it is rebuilding, I think the share price could rise. The interim results were decent and the real test in my opinion will be the full-year results. If it really does return to free cash flow positivity, I expect the shares to rally. So a £1.50 Rolls-Royce share price is on the cards in my opinion, although as of now I do not see any specific drivers for such price appreciation in the next few months. Meanwhile, risks remain. Further lockdowns and travel restrictions in some markets could hurt revenues. Any failure to deliver on the cash flow target – whatever the reason – could knock investor confidence, which could lead to a share price fall. The post Could the Rolls-Royce share price hit £1.50? appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading Should I buy Rolls-Royce shares at 112p? Better buy for September: Aviva (LSE:AV) or Rolls-Royce (LSE:RR)? Shares to buy now: IAG (LSE: IAG) or Rolls-Royce (LSE: RR)? The Rolls-Royce share price is rallying! Should I buy? Is the Rolls-Royce share price heading to 175p? Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  30. Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today (04/03/2021 - The Motley Fool UK)
    A one-year time frame is a good benchmark when I look at an investment return. It doesn’t mean I’ll sell after one year, but enough time has passed for me to see the general trend of the stock. Judging a company over a shorter time might lead me to make the wrong call on the stock. One example is Rolls-Royce (LSE:RR) shares. One-year performance  A year ago, Rolls-Royce shares were trading at 208p. As I’m writing, the share price is 115p. From this I can clearly see that a £1,000 investment is worth less now than it previously was. In numerical terms, it’s down 45%, so my £1,000 would be worth approximately £550. As a rough barometer, the FTSE 100 index over this period is down as well. However, it’s down less than 3%, so Rolls-Royce shares are underperforming the benchmark. This move lower doesn’t appear to be a one-off. If I look back two years, the share price was at 305p. There have clearly been fundamental drivers that have caused the value of the company to decrease over the past few years.  One of these has been the “tangible and sustainable cultural and performance shift” that was reported in the 2019 results. Rolls-Royce had focused on repositioning the business in several key areas. This meant cutting headcount (seen in both 2019 and 2020) as well as trying to reduce net debt (gross debt reduced by £1.1bn in 2019). This understandably meant Rolls-Royce shares took a knock, as trying to transform a mature company will hurt in the short run before investors see the benefits. Another hit to Rolls-Royce shares came due to Covid-19 last year. The impact was felt in most industries, but particularly in the aerospace sector. Demand for maintenance of engines and new engine sales in the civil aerospace area dried up. Although demand in other areas (such as defence) held firm, Covid-19 definitely took its toll. Should I buy Rolls-Royce shares now? I could look at Rolls-Royce shares and think that the downward trend might continue. However, there comes a point when the share price simply can’t fall lower unless the business is looking like it will go bust.  In its latest trading update, Rolls-Royce confirmed it has £9bn of liquidity available. So I don’t think the business is remotely close to going under in the short term. Therefore, I do see Rolls-Royce shares as an opportunity for me to buy in. But before I do, I’d like to see the full-year 2020 results that are due out on March 11. Besides any major disaster, I’ll buy after results come out. I imagine the commentary with the results will stress caution, but could look ahead with optimism. Based on the vaccination numbers, flying hours should increase in H2, which indirectly will benefit Rolls-Royce. Ultimately, I don’t see air traffic (either civil or otherwise) remaining depressed in the long term. So this should gradually mean a return to sustainable profits for the business. The issue here though is simply the risk of the unknown. If more virus mutations surface or lockdowns are prolonged, Rolls-Royce shares will likely continue to trade lower. However, I can’t predict this, and have to accept this as a risk. But with this in mind, I’d still buy the stock. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today appeared first on The Motley Fool UK.
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  31. Rolls-Royce share price is around 100p. Here’s what I’d do (22/02/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price has likely reflected the recent battle between Covid-19 vaccines and variants. Initially, the Pfizer vaccine candidate news really beat efficacy estimates in November and the Rolls-Royce share price rallied. Later, Covid-19 variants spread and made the prospect of a fast recovery in civil aviation more distant. The Rolls-Royce share price fell as a result. With the Rolls-Royce share price now close to the 100p level and everything that’s happened, here’s what I’d do. Vaccines versus variants In the battle between the vaccine and the variants, it’s not the end of the world for Rolls-Royce. While the spread of Covid-19 variants has slowed the recovery in civil aviation, the company still expects to turn cash flow positive at some point in the second half of 2021, according to a trading update released earlier in the year. Management is also confident that they are well positioned for the future given the company’s liquidity of around £9bn. At its current stage, I reckon the Covid-19 vaccines are getting a slight upper hand on the variants. Production of Covid-19 vaccines has ramped up higher and the number of new cases has fallen in many parts of the world. If the number of new cases continue to decline sharply, there is the possibility that civil aviation recovery expectations could increase and this could potentially benefit the Rolls-Royce share price. There could also be hope in the future against variants. Companies like GlaxoSmithKline and CureVac are, for instance, working on multivalent mRNA Covid-19 vaccine candidates that could target variants more effectively. The two companies, which are working together, hope to bring a multivalent product onto the market next year. If the late stage results of those multivalent vaccine candidates are positive, I reckon that civil aviation recovery expectations could increase. With this said, Covid-19 is constantly mutating and there is potential for a new strain to hinder civil aviation more than expected. As a result, the Rolls-Royce share price could always decline. Rolls-Royce share price: what I’d do Given the current information on Covid-19 variants and the current Rolls-Royce share price, I’d buy shares. Making quality and dependable jet engines is one of the hardest things in the world to do. It takes a lot of engineering know-how that I think gives Rolls-Royce a potential competitive advantage in future growth sectors. I think civil aviation will eventually recover and RR could be a good investment as a result. I could be wrong, however, if a new Covid-19 variant spreads and becomes a big problem. I’d also follow the annual result report next month, particularly when it comes to future guidance (if management provides any). If Rolls-Royce beats the market’s real estimates on earnings or guidance, I could see how the stock could go higher. I could also see the stock going lower if the results are underwhelming. I’d also be interested in how the company’s planned sale process of ITP Aero is going. I reckon a higher than expected sale price could help the stock. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Rolls-Royce shares: should I buy? Rolls-Royce share price: how the company is preparing for the air taxi market The Rolls-Royce share price is back above 100p, but I wouldn’t buy the stock yet The Rolls-Royce share price is rising this week. Should I buy? The Rolls-Royce share price is under £1: should I buy today? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price is around 100p. Here’s what I’d do appeared first on The Motley Fool UK.
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  32. Rolls-Royce share price: what’s in store in the coming months? (26/04/2021 - The Motley Fool UK)
    Rolls-Royce (LSE:RR) was one of the biggest losers of the stock market crash caused by Covid-19 last year. What is ahead for the Rolls-Royce share price in the coming months, and is there an opportunity here for me to pick up cheap shares? Rolls-Royce share price woes Between February 2020 and September 2020, the Rolls-Royce share price lost 80%. Across the whole of 2020, the Rolls-Royce share price declined by over 50%. Its debt levels rose as it borrowed to keep the lights on, and it also cut jobs and announced a rights issue to generate cash flow. In December, the Rolls-Royce share price experienced its highest post-Covid-19 price. Shares were trading for 135p per share. Since that time, however, the share price has fallen over 20%.  Challenges and outlook ahead Airlines are operating more than at this time last year. The issue here is that Covid-19 is still rife and there could be further restrictions if another wave hits. In terms of Rolls-Royce, I believe the overall outlook is improving. I do believe, as I write, the worst of the crisis is over. It has taken the necessary steps to see it through some tough times and has begun to shore up its once-beleaguered balance sheet. There are still some challenges it needs to overcome, however. In a recent trading update, Rolls-Royce predicted a free cash outflow in the region of £2bn in 2021. This is money that is going out of the business that its management team will need to find from somewhere. In the same update, it did mention its £9bn liquidity, which is a good sign in my opinion. This should help with the cash outflow mentioned. The Rolls-Royce share price could benefit in the future if ambitions are achieved. It believes it can generate over £700m of free cash flow by 2022. This is a projection based on past figures and flying hours of engines. Cash is king and this could put Rolls-Royce in a much better position.  My verdict I believe there is lots of recovery potential linked to the Rolls-Royce share price. The issue I have is that this recovery is linked to Covid-19. I don’t think it can handle another scenario whereby planes are grounded and it faces severe losses. It must be noted that different parts of the world are in different states related to the virus. The US seems to be flourishing from an aviation perspective and is a market Rolls-Royce can capitalise on. Asia is struggling right now with a deadly variant, and there seems to be another lockdown on the horizon over there. I believe the current Rolls-Royce share price is not reflective of its improving stature, and I think it will creep up over the coming months. I class it as a high-risk investment but I think it is priced quite low right now. It could make an interesting recovery play for my portfolio. Right now, I would not invest in Rolls Royce shares but will keep a keen eye on developments.  Away from Rolls Royce, here is a tech stock that recently underwent an IPO that I have examined. CEO’s £500,000,000 Stake on Industry’s “Uber” Revolution We think that when a company’s CEO owns 12.1% of its stock, that’s usually a very good sign. But with this opportunity it could get even better. Still only 55 years old, he sees the chance for a new “Uber-style” technology. And this is not a tiny tech startup full of empty promises. This extraordinary company is already one of the largest in its industry. Last year, revenues hit a whopping £1.132 billion. The board recently announced a 10% dividend hike. And it has been a superb Motley Fool income pick for 9 years running! But even so, we believe there could still be huge upside ahead. Clearly, this company’s founder and CEO agrees. Learn how you can grab this ‘Top Income Stock’ Report now More reading As the Rolls-Royce share price falls, I’m still buying Will the Rolls-Royce share price recover in the second half of 2021? Why I think I could double my money with the 100p Rolls-Royce share price The Rolls-Royce share price is crashing in April! Should I buy RR today? Does the Rolls-Royce share price make me want to buy in 2021? Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce share price: what’s in store in the coming months? appeared first on The Motley Fool UK.
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  33. Can someone give me their best bearish thesis on RYCEY. (04/04/2021 - Reddit Stocks)
    I’m already holding a large position long on Rolls Royce RYCEY, I believe strongly that they are just beginning their way back up from the bottom of a 5yr. low. I have read a lot of great PR in regards to innovations and developments they’re working on including the largest lightest turbofan engine ever made that will be 25% more efficient than its predecessors. Rolls Royce are invested in space travel as well as supersonic commercial flight for the future. I just want to hear a bearish argument other than the current state of civil aviation which is a main source of revenue for them as to why they won’t be 5x-10x in the next 2-3 years... Annnnd Go!   submitted by   /u/TJspring47 [link]   [comments]
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  34. Where will the Rolls-Royce share price go in June? (31/05/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) has had one of the rockiest rides of the pandemic. Rolls has been up and down so far in 2021, going nowhere really in May. And we’re still looking at a fall of more than 60% over the past two years. Now, I’m going to say right up front, I’ve no idea where the Rolls-Royce share price is going to go in June. But we’re heading for developments that should affect the longer term. And I still can’t work out whether to buy Rolls-Royce shares as a recovery pick. For one, the next step in pandemic opening up is scheduled for 21 June. On that day, the government has pencilled in the removal of the final legal restrictions on social and business movements. Saying that, there’s that Indian variant thing. And the Prime Minister has already said we might have to wait a bit longer to get our full freedoms back. Further delays could see the Rolls-Royce share price weaken in June. Still, the opening up that we’re already enjoying is having its effect. In particular, sun-seekers are heading for the beaches again. And some travel-related shares are recovering. International Consolidated Airlines shares are up 26% so far in 2021, with easyJet not far behind with a 21% gain. TUI hasn’t had such a good year so far though, dropping a few percent. And the Rolls-Royce share price is down 4%. Rolls-Royce share price drivers It’s probably going to be a while before the travel sector recovery feeds through to Rolls-Royce. It’ll take time before engine maintenance requirements start to ramp up again. The other critical thing is that Rolls-Royce suffered big loss in 2020, and needed a major financial rescue package. There’s still cash on the books to keep the aerospace engineer going for a while yet. But will it be enough to last until profits return? The uncertainty behind that question must, surely, weigh heavily on the Rolls-Royce share price for at least a few months yet. At full-year results time, Rolls wasn’t in a position to make much in the way of predictions. That’s not surprising, as the company spoke of the uncertainties of the near- and medium-term outlook for civil aviation. It’s all about cash And we shouldn’t expect the cash situation to reverse in the current year. With those results, Rolls said it expects free cash flow to turn positive in the second half of 2021. But it still expects to suffer a free cash outflow of around £2bn for the full year. The company is hoping for positive free cash flow in 2022 of at least £750m. But that depends critically on the pace of recovery in flying hours, and the success of the firm’s cost-cutting strategy. I’m keenly awaiting first-half results due on 5 August. Any updates on the expected cash flow situation could drive the Rolls-Royce share price in either direction. In the meantime, any positive news from the aviation business in June and beyond would be welcome. I’m not buying yet. I’m going to wait for the clouds of uncertainty to clear a bit. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading What’s happening to the Rolls-Royce share price? Could the Rolls-Royce share price fall below 100p? This is what I’m doing about the Rolls-Royce share price! As the Rolls-Royce share price remains cheap, I’d invest £3k Is it time to act on the Rolls-Royce share price? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Where will the Rolls-Royce share price go in June? appeared first on The Motley Fool UK.
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  35. Why is the Rolls-Royce share price falling? (10/02/2021 - The Motley Fool UK)
    Over the last month or so the Rolls-Royce (LSE: RR) share price has fallen nearly 15%. That’s worse than the 5% of the FTSE 100. Over 12 months the fall is 60%. So why have the shares continued to fall? Should investors be worried?  Reasons for the Rolls-Royce share price decline New variants of Covid are a source of concern. Although the UK is doing well with the vaccine rollout, many other countries are struggling and there are supply constraints, as the EU/AstraZeneca row highlighted. And the UK, South Africa and Brazil variations have all reignited pandemic concerns. That has implications for travel and, by extension, for Rolls-Royce. A January trading update from the engineer has probably also weighed on the share price. The company revised down forecasts for widebody engine flying hours to 55% of 2019 levels from a 70% estimate last October. It added to this by saying that it expected to lose £2bn in cash as a result. Cashflow was something it was looking to improve, so the setback, while understandable in the context of Covid-19, is still disappointing. Yet emerging technologies like modular nuclear power and electric aircraft could offer a way forward for Rolls-Royce and boost the shares.  But for now, the virus dictates the future of the Rolls-Royce share price. The company can invest in nuclear, marine and other industries to offset some of the aviation losses, but investors (including me) still seem concerned about the company’s flying prospects in the short term, at least. What I plan to do about this potential value share I’m also a little concerned. Even in light of the Rolls-Royce share price being cheaper than it was a month ago and far less than it was a year ago, I’ll avoid the shares. For me they carry too much risk, and a recovery is too fragile. In some ways RR resembles a value share, as it has fallen so much in the wake of challenging trading conditions and the its poor financial performance. With multiple problems to contend with, I’d rather invest in some shares with strong growth potential, rather than the volatile Rolls-Royce share price. An alternative FTSE 100 share One share that I’d rather invest in is the high-yielding insurer, Aviva (LSE: AV). A new CEO is slimming down the business, which should make it easier to manage, and perhaps even attract a takeover from a larger company. That’s happened within the industry, for example with RSA Insurance, so there is a precedent. The shares have a dividend yield of 3.79% and it also seems to show signs of being good value with a P/E of just five.  As a financial share it was particularly hard hit in the sell-off about 12 months ago. That means there’s plenty of room for a share price recovery if the economy improves, I think. On the downside there’s a risk it could underperform if the economy remains weak. Also, its disposals mean it’s now more reliant on the UK and Ireland for earnings so any poor performance here could hurt the share price.  Overall though, I’d prefer to add Aviva shares to my portfolio as the Rolls-Royce share price still looks very volatile.   FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading I think the Rolls-Royce share price could benefit from this potential trillion dollar market Why I think the 94p Rolls-Royce share price could double my money Rolls-Royce share price has declined almost 30%. Here’s what I’d do The Rolls-Royce share price: here’s what I’d do right now The Rolls-Royce share price has fallen again. Should I buy the stock now? Andy Ross owns no share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Why is the Rolls-Royce share price falling? appeared first on The Motley Fool UK.
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  36. 3 reasons why the Rolls-Royce share price jumped 10% last week (09/08/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE:RR) share price traded below 100p for much of July. However, last week saw a strong move higher with double-digit gains to enable the price to finish the week at 112p. Given such a jump in a stock that has been on a downward trend since the start of the pandemic, this catalyst is worth me looking into. From there, I can decide whether to buy shares. Good results The first (and major) reason for the jump was the release of half-year results. This was eagerly anticipated by many investors and was taken as a net positive. The large restructuring within the business is going well, with 90% of its headcount reduction completed. Overall cost-saving measures meant that underlying operating profit came in at £307m.  Revenue for H1 dropped slightly from the previous period (£5.16bn vs £5.67bn ). However, the cost savings meant that the business was able to flip from a loss to a profit. This really highlights the importance of tight expense controls. Even during a period when revenue didn’t grow, control of outgoings shows that the company can still be profitable. I think the results are a valid reason for a boost in the Rolls-Royce share price. My one note of caution is that there’s only so far the company can cut costs before it’s fully efficient. From then on, if revenue can’t grow, the business will be in trouble. Deal-making news The second reason for the boost was confirmation that Rolls-Royce is in talks to sell off some non-core operations. It’s talking to a US private equity company to sell ITP Aero. It also has a buyer for its Norwegian maritime subsidiary Bergen. It isn’t clear what proceeds will be gained should both deals get signed off, but it’s expected to be in the billions.  Clearly, this is good news all round. Rolls-Royce wants to restructure and slim down to become more efficient. Selling off these areas also allows cash to flow back into the business. It could use this to pay off some of the debt taken on during the pandemic, or to commit to future projects. The Rolls-Royce share price could see a further move higher when more details of these deals are announced, as well as what the plans are for the proceeds.  Travel helping Rolls-Royce shares The final reason for the move higher last week was good news regarding travel restrictions in the UK. The travel light system now has more countries at green or amber, particularly in Europe. This should allow more international flights, with travelers having fewer restrictions imposed on them on landing. Given the size of the commercial aviation arm of Rolls-Royce, higher flying hours from airline operators should indirectly boost demand for the company. All three reasons mentioned above are positive for the Rolls-Royce share price. This doesn’t mean there is no risk involved. Rolls-Royce is still heavily laden with debt, with it expecting to rise by year-end to £4bn. Also, the lack of organic revenue growth is concerning. Investors will now be watching out for further news to see if more gains in the share price are around the corner. Despite the risks, I’d consider buying a small amount of shares now and look to build a larger position over time. The post 3 reasons why the Rolls-Royce share price jumped 10% last week appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading The Rolls-Royce share price jumped this week. Would I still buy? Rolls-Royce shares: 3 reasons why I’d buy Are Rolls-Royce shares now a bargain? What do the Rolls-Royce results mean for its share price? The recovery at Rolls-Royce is happening! Should I buy the shares now? jonathansmith1 has no position in any share mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  37. The Rolls-Royce share price is rising. Should I buy now? (03/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares are popular right now. Last week, Rolls-Royce was the fifth most purchased stock on Hargreaves Lansdown. Meanwhile, on Trading 212, RR is currently the 7th most owned stock overall. This interest in the stock appears to be pushing its share price up. Is this a share I should buy for my own portfolio? Let’s take a look at the investment case. Rolls-Royce shares: the bull case I can see why Rolls-Royce shares are popular at the moment. For starters, the share price has been hit hard due to Covid-19 disruption. Over the last year, RR is down about 50%. As a result, the company has a market cap of just £2.2bn right now. If the prospects for the airline industry improve (which I think they will eventually), Rolls-Royce shares could rise. That’s because the company generates a substantial proportion of its revenues from the manufacturing and servicing of engines for the commercial aviation industry. Secondly, there’s been a lot of talk this year about all-electric planes and ‘air taxis’ and some investors believe that Rolls-Royce could be a big player in these areas. Recently, Rolls-Royce has been developing a high-performance electric aeroplane named Spirit of Innovation. This has completed its first runway taxiing tests, ahead of a first flight, which is expected to take place this spring. “This system and the capabilities being developed will help position Rolls-Royce as a technology leader offering power systems to the urban air mobility market,” said Rob Watson, director of Rolls-Royce Electrical, after the tests. This development certainly looks interesting. Going forward, air mobility could be a genuine source of growth for Rolls-Royce. Is RR a good fit for my portfolio? Having said all that, I’m not convinced that Rolls-Royce shares are a great fit for my portfolio at the moment. I like to invest in companies that are consistently profitable, cash generative, financially sound, and that generate a high return on capital employed. In other words, I like high-quality businesses. Companies like Apple, Microsoft, and dotDigital are some good examples. Companies that have these kinds of attributes tend to be good investments over time. Looking at Roll-Royce’s financial track record, it’s not so impressive. In recent years, the company has posted big losses on a number of occasions (well before Covid-19). And even when it was profitable, return on capital employed was not that high. Meanwhile, Stockopedia gives Rolls-Royce an Altman Z1 score of -0.19 which indicates a “serious risk of financial distress” within the next two years. Overall, Rolls-Royce does not appear to me to be a high-quality business. Better stocks to buy In conclusion, I do think Rolls-Royce shares have the potential to keep rising in the short term. If the airline industry picks up, the company should benefit. However, Rolls-Royce is not the kind of stock I’d buy for my portfolio. I think there are much better stocks I could buy right now that are more suited to my goals (generating strong returns over the long term) and risk tolerance. Like this one…. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Will the Rolls-Royce share price recover in 2021? Will the Rolls-Royce share price reach 150p? Rolls-Royce share price: what I’d do given the upcoming full-year result Rolls-Royce shares: is it the right time to buy? The Rolls-Royce share price: have we seen the bottom? Edward Sheldon owns shares in Apple, Microsoft, dotDigital, and Hargreaves Lansdown. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK owns shares of and has recommended Apple and Microsoft. The Motley Fool UK has recommended dotDigital Group and Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising. Should I buy now? appeared first on The Motley Fool UK.
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  38. Can the Rolls-Royce share price recover in 2021? (20/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has been falling. In fact, the stock is currently trading below 90p. But despite the recent fall, I’m optimistic that the Rolls-Royce share price can recover in 2021. I’d buy the stock on this dip. Here’s why. Why is the Rolls-Royce share price falling? In short, Rolls-Royce has exposure to the civil aviation space. It makes most of its money from selling aircraft engines and servicing them. And so if people are travelling less this will impact the company’s revenues. It’s pretty simple to understand why the share price fell last year. The pandemic caused a lot of uncertainty. But the same is happening again. Up until a month ago, the stock was recovering. But Covid-19 case numbers are on the rise in the UK again, driven by the Delta variant. Hospitalisations and deaths are also increasing, but thankfully not at the same rate. Couple this with restrictions being eased and this has created uncertainty in the markets. In fact, the FTSE 100 index was down over 2% yesterday, which highlights that investors may be thinking that the UK government is opening up the economy too soon. Another lockdown hasn’t been ruled out and it has caused a degree of uneasiness. Of course, this is going to impact travel-related stocks and Rolls-Royce is one of them. It doesn’t help when Health Minister Sajid Javid is having to self isolate after testing positive for Covid-19. At the same time the UK Prime Minister and Chancellor are having to isolate as well. So should I buy? I’m worried that the number of coronavirus cases are rising. And I reckon the number could rise further now that the economy has reopened. Of course, this is going to have a knock-on effect on the Rolls-Royce share price.  But for now I’m encouraged by the fact that the number of hospitalisation and deaths aren’t increasing as fast as case rates. On this basis, I’d buy Rolls-Royce shares on the dips. I think that in the long term, the company can weather the coronavirus storm. It’s worth noting here that the company still expects to turn free cash flow positive at some point in the second half of 2021. It reckons travel will recover and also its cost savings initiatives should start paying off. This has yet to be seen. In fact, the firm expects to announce its interim results on 5 August. So I’ll have a better understanding if the company remains on track. For now, Rolls-Royce has sufficient liquidity and its earnings from its defence sector as well as the money from its disposals to rely on. It also has a strong brand and reputation. Hence I think the stock can recover in 2021. But if things do get worse, it may come to the market and ask for more money. I don’t think this will be viewed positively by investors as it means that times are still tough for the company. This may impact the Rolls-Royce share price. And there’s no guarantee that it will be able to raise the funds. As I said, I feel it has done enough so far and taken the right steps. I think this Covid-19 uncertainty has created a buying opportunity and I’d buy the stock on the dips. I think the stock can recover in 2021. The post Can the Rolls-Royce share price recover in 2021? appeared first on The Motley Fool UK. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading 3 FTSE 100 shares to buy after the ‘Freedom Day’ crash Will the Rolls-Royce share price keep falling? How low can the Rolls-Royce share price go? The Rolls-Royce share price falls again! Here’s what I’m doing about it The Rolls-Royce share price is falling in July: here’s why I’d buy Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  39. Can the Rolls-Royce share price rise in the months ahead? (12/07/2021 - The Motley Fool UK)
    The Rolls-Royce (LSE: RR) share price has followed a disappointing trajectory over the past few years. Climbing to 130p near the end of 2020, it seemed the stock may have been gaining momentum. However, this was not the case. Currently sitting at 97p, the Rolls-Royce share price has hovered around the 100p mark for most of 2021. It’s up only 6% year-on-year and this raises the question: can the share price rise higher over the next few months? Rolls-Royce share price problems The pandemic hit Rolls-Royce hard. The firm was forced to cut 7,000 jobs in the face of a £4bn loss for 2020. Rolls makes most of its money servicing aeroplane engines, but with the travel industry grinding to a halt during the pandemic, business dried up. This forced the company to issue 6.4bn new shares in October 2020. While this raised £2bn, it halved the value of the share price, vastly reducing the earnings per share. 2020 was a bad year for Rolls-Royce, but the firm was experiencing problems even before the pandemic. In 2019, problems with its Trent 1000 engines forced the firm to fork out nearly £800m. This raised the total cost of Trent 1000 engine setbacks to £2.4bn for 2017-23. These expenses put a huge strain on free cash flow, something the firm could not afford going into the pandemic. Results dependent On 5 August, Rolls will be publishing its half-year results. This will offer investors insight into the future direction of the business. The firm itself has set out several targets for the last six months of 2021 and for 2022. These include turning free cash flow positive by the end of 2021 and achieving annualised savings of over £1.3bn by the end of 2022. The half-year results should give investors a closer idea of the progress of these targets. If targets are looking achievable, I believe we will see positive growth in the Rolls-Royce share price. However, these targets are heavily reliant on the increase of engine flying hours. If travel problems linked to the pandemic persist, it could vastly reduce the likelihood of these targets being reached. Will the shares climb higher this month? I expect the August results will be a good indication of the direction of the Rolls-Royce share price in the coming months. However, this month’s share price will rely on a broader range of factors. The UK is set to abandon all Covid-19 restrictions on 19 July. If this is pushed back (again) it will likely hinder any immediate Rolls-Royce share price growth. In addition to this, in an interview with Bloomberg this month, Engineering and Technology Director Simon Burr asserted his optimism in moving beyond the Trent 1000 jet engine problems. Encouraging statements like this are great for investors’ confidence and could help drive up the Rolls-Royce share price. I think it’s hard to say if the share price will rise in the immediate future. It has shared its plans to overcome 2020 problems and the August results should highlight the probability of these targets being achieved. If the results bring good news, I think we could see a rise in the Rolls-Royce share price immediately afterwards and in the coming months. The post Can the Rolls-Royce share price rise in the months ahead? appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Rolls-Royce shares: 1 reason to buy and 1 reason to sell Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? This is what I’m doing about the Rolls-Royce share price Should I buy Rolls-Royce shares today? Dylan Hood has no positions in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  40. Why is Rolls-Royce a penny stock? (13/07/2021 - The Motley Fool UK)
    With Rolls-Royce (LSE: RR) trading below a pound, the famous engine maker is now a penny stock. But the Rolls-Royce share price traded higher just a couple of months ago – and I think it could go up again. Turbulence for the Rolls-Royce share price Concerns about demand for air travel meant that companies heavily exposed to it, such as Rolls-Royce, were hard hit after the pandemic started. The shares were climbing earlier this year, but have shed a quarter of their value since their mid-March highs. They are now up just 4% over the past year. There are a number of reasons for that. One reason is the inconsistent pace at which air travel demand is coming back. With each setback, such as delays in lifting restrictions, investors fret about the prospects for Rolls-Royce. That has hit the Rolls-Royce share price. A second reason is the company’s liquidity. It massively boosted liquidity last year. But it did so at the expense of existing shareholders, through a heavily dilutive rights issue. While I think the company currently has ample liquidity, the proven risk of dilution could be dampening enthusiasm for the shares. Quality on the cheap Often, penny stock status suggests concerns about a company’s future business prospects. Undoubtedly a decline in demand for aircraft engine servicing has hit Rolls-Royce hard. Last year it booked a £3.1bn loss. With demand for air travel still significantly below pre-pandemic levels, there is a risk that weakened revenues in the company’s core engines business will weigh on profits again this year – and perhaps beyond. But there are signs of longer-term resilience in the air travel market, including large aircraft order from major airlines. Only a few global aircraft engine makers of scale exist, and Rolls-Royce is one of them. That alone ought to help it return to financial health in future. Add to that the fact that the company isn’t just reliant on civil aviation – and its other business divisions have held up fairly well during the pandemic. So while the Rolls-Royce share price may languish beneath the pound mark for a while yet, I don’t expect it to stay there forever. Where next for the Rolls-Royce share price While I see potential for a higher Rolls-Royce share price, a key question is: what will be the driver to move it? One possible factor could be the release of the company’s interim results, due next month. Rolls-Royce has repeatedly said it expects to become free cash flow positive in the second half of this year. An update on that target at the time of the interim results could lead to a rerating of the shares, either positively or negatively. The effects of the company’s cost savings programme ought also to show up more clearly now than it did before. If it looks like it has cut out costs without damaging Rolls-Royce’s reputation with customers, that could also provide a boost to the Rolls-Royce share price. For now, however, I continue to watch from the sidelines. I do not plan to buy Rolls-Royce shares in the absence of clear evidence of strong, sustained business recovery. The post Why is Rolls-Royce a penny stock? appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading What’s going on with the Rolls-Royce share price? Can the Rolls-Royce share price rise in the months ahead? Rolls-Royce shares: 1 reason to buy and 1 reason to sell Can the Rolls-Royce share price return to 200p? Is the Rolls-Royce share price cheap at 100p? Christopher Ruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  41. Should I buy Rolls-Royce shares today? (06/07/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) is a popular stock at the moment. Last week, RR was the most purchased stock on both Hargreaves Lansdown and AJ Bell Youinvest. Should I buy Rolls-Royce shares for my own portfolio? Let’s take a look at the investment case for the FTSE 100 stock. Rolls-Royce shares: two reasons to be bullish  I can see a few reasons to like Rolls-Royce shares right now. For starters, the stock is a classic ‘reopening’ play. Rolls-Royce generates a large proportion of its revenues from the servicing of jet engines. So the company should benefit as the world reopens and the travel industry picks up. Recently, it said it’s positioned well for the rebound in international air travel. It’s worth noting that in June, analysts at Jefferies listed Rolls-Royce as one of their top picks for the ‘post-pandemic growth cycle’. With economic activity picking up, Jefferies expects some companies to embark on a period of bonanza, and Rolls-Royce is one of them. And Jefferies isn’t the only brokerage that likes Rolls-Royce shares at present. Recently, Berenberg listed the stock as a ‘buy,’ saying that significant restructuring across the aerospace sector driven by the pandemic will create opportunities for investors. “Despite the delayed recovery in air traffic, demand signals are firmly positive,” its analysts wrote in a research note. Another reason to like Rolls-Royce is that it’s working hard to become a more ‘sustainable’ company. Last month, the company outlined plans to reach net zero emissions by 2050 by investing more in decarbonising technologies and, in the short term, using more sustainable aviation fuel. To ensure it reaches that target, the company plans to lift its research and development spending on low carbon and net zero technologies to 75% of its total budget by 2025, from around 50% now. Meanwhile, on 30 June, Rolls-Royce announced it will be partnering with oil giant Shell to work on the development of sustainable aviation fuel, in line with both their plans for net zero emissions by 2050. The pair signed a memorandum of understanding (MoU) which Rolls-Royce said would help with plans to certify 100% sustainable aviation fuel (SAF) for use in planes. It’s also worth pointing out that Rolls-Royce appears to be progressing with its high-performance electric aeroplane. The company recently said we can expect to see the first flight in the coming weeks. Is RR a good long-term investment? I do have one big concern about Rolls-Royce shares however, and that’s the company profitability track record. It was having problems with its profitability well before Covid-19. In 2016, for example, it generated a net loss of £4bn. What stands out to me is that Rolls-Royce’s five-year average return on capital employed (ROCE) figure is -3%. That’s very poor. History shows companies that generate low returns on capital are generally not good long-term investments. Rolls-Royce shares: should I buy? I think Rolls-Royce shares could have some upside in the short term as the world reopens. However, as a long-term investor, I’m looking for more than short-term gains. Given its historically low ROCE, I’m not convinced RR is a good stock to own for the long term. So I’m going to leave the shares alone for now. I think there are better stocks to buy. The post Should I buy Rolls-Royce shares today? appeared first on The Motley Fool UK. Like this one… FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Where will the Rolls-Royce share price go in July and beyond? Rolls-Royce shares are below 100p. Should I buy? The Rolls-Royce share price: 3 things that could give it a boost Should I buy FTSE 100 shares BP or Rolls-Royce for my ISA in July? Top British stocks for July Edward Sheldon owns shares of Hargreaves Lansdown. The Motley Fool UK has recommended Hargreaves Lansdown. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  42. Tesla has fallen 35%. How I think it affects the Rolls-Royce share price (09/03/2021 - The Motley Fool UK)
    With it having such a large market cap, Tesla’s fortunes affect many other stocks. Given how influential Tesla is, it’s not out of the question that it indirectly affects Rolls-Royce (LSE:RR) too. With Tesla shares declining from around $880 in late January to $563 on 8 March, here’s how I think it affects the Rolls-Royce share price. Tesla & Rolls-Royce  In the past, I think demand for many electric-related stocks increased due to Tesla’s success. Although many electric stocks don’t really have anything in common with Tesla, some in the market probably thought they did (or anticipated the correlation) and bought shares of the companies. The buying somehow caused more buying and many electric stocks rallied when Tesla rallied. Given that air taxi stocks are electric, I reckon they benefited from Tesla’s success as well. This is despite Tesla not being an air taxi stock itself.  I think Rolls-Royce could benefit if air taxi stocks are in high demand (despite Rolls-Royce also not being an air taxi stock itself — yet). If demand for air taxi stocks is strong, air taxi startups could find it easier to raise money. With more money, they could spend more on R&D and potentially bring a product to the mass market faster. If air taxis become market ready faster, demand for air taxi propulsion systems could increase faster. Assuming Rolls-Royce is the leader in air taxi propulsion systems like it wants to be in the future, RR could stand to benefit with more potential growth too.  By that reasoning, Tesla shares falling could indirectly lower demand for air taxi stocks and indirectly negatively affect Rolls-Royce. Is it the case in practice? While the ‘Tesla affects Rolls-Royce’ fundamental reasoning sounds compelling, the Rolls-Royce share price hasn’t really reflected it. While Tesla shares have surged in 2020, for example, RR actually decreased substantially. As a result, I don’t think Tesla falling 35% from its highs actually affects the Rolls-Royce share price all that much. The market, in my view, seems to be more focused on Rolls-Royce’s civil aerospace business rather than its future potential air taxi propulsion business. Civil aviation gets more media attention, and Rolls-Royce’s near-term fundamentals depend a lot more on civil aviation than air taxi propulsion. The Rolls-Royce share price: what I’d do Rolls-Royce has uncertainty. The Rolls-Royce share price might not do well if air travel doesn’t recover like the market expects. Given that it’s a new market, it’s also not clear if Rolls-Royce will succeed in the air taxi propulsion system market like the company has in the traditional jet engine market. The British company will likely have a lot of competition in that category. Nevertheless, I think the market isn’t really reflecting the potential value in Rolls-Royce’s air taxi propulsion business because it’s still in its very early stages. It also hasn’t gotten much press as management hasn’t really advertised it. As the technology progresses, however, I reckon the market perception of the British company’s air taxi propulsion business could increase. Given the business’ potential and the potential for air travel to eventually recover with the vaccine rollouts, I’d buy and hold shares at the current Rolls-Royce share price. A Top Share with Enormous Growth Potential Savvy investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!). Not only does this company enjoy a dominant market-leading position… But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks! And here’s the really exciting part… While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes. That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge! More reading The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? Will the Rolls-Royce share price recover in 2021? Jay Yao has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Tesla. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Tesla has fallen 35%. How I think it affects the Rolls-Royce share price appeared first on The Motley Fool UK.
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  43. The Rolls-Royce share price: 3 things that could give it a boost (29/06/2021 - The Motley Fool UK)
    The one thing that really could give Rolls-Royce (LSE: RR) a boost is an end to travel restrictions. But the reverse is happening right now amid a Covid-19 Delta variant surge. As a result, the Rolls-Royce share price ended Monday down 5.6%, as travel-related stocks declined across the board. Rather than opening up to British travellers, Spain and Portugal have both announced new restrictions. They include the need for vaccination certificates and negative tests, with quarantine as an alternative. Rolls-Royce isn’t the only one suffering, as TUI, International Consolidated Airlines, and the other airlines have all lost ground. We might see some respite should the UK’s restrictions end as hoped on 19 July. But while we still face continually changing pandemic uncertainty, I really can’t see the Rolls-Royce share price getting that one boost that it really needs just yet. Still, pandemic problems will surely only delay the Rolls recovery, won’t they? I mean, that recovery is sure to come, isn’t it? I’m convinced there will be a recovery, but I’m concerned over how long it will take. And the shape of the company that comes out of it could have an impact on Rolls’ long-term valuation. Debt, balance sheet What I’m getting at here is the balance sheet. And progress on that front is the next thing that I think could help the Rolls-Royce share price. Rolls is disposing of its Spanish subsidiary ITP Aero, for around €1.5bn, and that will surely help. The rescue package at Rolls got the company out of its crisis. But it involved taking on £7.3bn in new debt in the 2020 year. I think that’s manageable, providing the company can maintain sufficient liquidity to keep it going until the cash flow taps start opening again. If it can’t, we could see a further round of fundraising. And that would surely hammer the share price again. Right now, we’re looking at a race between Rolls-Royce’s business turnaround and the cash running out. The closer we get to knowing which will win, the greater the effect we should see on the share price. Rolls-Royce share price, medium term These are two nebulous issues, so is there anything more concrete? Well, first-half results are due on 5 August. And I expect the update will be one of the most keenly awaited in the FTSE 100 this year. And everyone will presumably be looking to the state of the firm’s balance sheet. With flying hours hardly changed so far this year, I’ll be looking for anything suggesting that possible further refinancing is on the cards. I’ll be hoping we don’t get it, and looking for upbeat outlook news. If the company makes optimistic noises regarding its balance sheet, and appears confident that it has enough liquidity, I think the shares could get a boost. I do see a strong long-term future for the company. But in the short-to-medium term, I fear events are more likely to have a negative effect than positive. I will not buy for now. The post The Rolls-Royce share price: 3 things that could give it a boost appeared first on The Motley Fool UK. There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it! Don’t miss our special stock presentation. It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about. They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market. That’s why they’re referring to it as the FTSE’s ‘double agent’. Because they believe it’s working both with the market… And against it. To find out why we think you should add it to your portfolio today… Click here to get access to our presentation, and learn how to get the name of this 'double agent'! More reading Should I buy FTSE 100 shares BP or Rolls-Royce for my ISA in July? Top British stocks for July Can the Rolls-Royce share price maintain its momentum? The Rolls-Royce share price is up 170%. Should I buy now? Will the Rolls-Royce share price rise in July? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  44. Does the Rolls-Royce share price make me want to buy in 2021? (21/04/2021 - The Motley Fool UK)
    As stock market crash stories go, the Rolls-Royce Group (LSE: RR) one is not pretty. But is there going to be a happy ending? Disappointingly, the Rolls-Royce share price recovery has gone off the boil a little, and the price is down so far in 2021. Over the past two years, the damage amounts to a painful 68% fall. Rolls-Royce depends on civil aviation for the biggest slice of its income. And while planes were grounded and engines didn’t need maintenance and repair, income for Rolls was hammered. It’s important to remember, though, that that’s not all there is to Rolls-Royce. The firm also has power systems and defence divisions. Still, the grounding of passenger planes was tough. But things are starting to look better now. Or are they? Folks in the UK seem to be super keen to book their holidays in the sun (almost as keen as they are to get back to the pubs, it seems). And the early 2021 recovery in the Rolls-Royce share price was surely based on anticipation of a sun-seeking summer. Some transport firms, including TUI, have made positive sounds about the prospects for international summer holidays this year. It might happen, and the Rolls-Royce share price could head upwards again. New Covid fears But fresh Covid-19 waves have already started around the world. And only this week, the British Prime Minister warned that we’re likely to see a third wave this year. I doubt it will be as devastating as those already past. But I won’t be booking any flights just yet. The prospects for 2021 don’t really matter too much for me anyway. No, I’m thinking of the longer-term future for the Rolls-Royce share price. About what things will be like in, say, five years. And whether the current valuation of the company suggests the shares are a bargain. And that’s where I’m just not sure. Firstly, Rolls-Royce did get itself into a sustainable financial situation. At least, I think it did, for now at least. Unless things get stretched and the company has to go back to the markets for a fresh injection of cash, that is. Is that likely? If the aviation business doesn’t get going again fairly soon and Rolls doesn’t see an improving income stream, I wouldn’t be surprised. Rolls-Royce share price progress? So when will we see the cash flows needed for sustained Rolls-Royce share price progress? Some observers suggest that aviation could get back to 2019 levels by 2024-2025. But those are among the more optimistic guesses. There’s increasing pressure from climate change too, with carbon emissions targets being brought forward. I wouldn’t be at all surprised if 2019 turned out to be a peak year for leisure flights, not to be equalled for a long time. So, on the one hand, I’m seeing a company that looks undervalued on the face of it, and that I’ve liked for years. And I think the Rolls-Royce share price could indeed have a strong future. But there are just too many uncertainties between now and next year for me. So no, I’m not going to buy in 2021. Maybe 2022. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading 2 ways the Rolls-Royce share price could benefit from the reopening economy Is the Rolls-Royce share price undervalued? Is reopening important for the Rolls-Royce share price? Should I invest in Rolls-Royce or Aston Martin shares right now? This is what I’d do about the Rolls-Royce share price right now! Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Does the Rolls-Royce share price make me want to buy in 2021? appeared first on The Motley Fool UK.
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  45. The Rolls-Royce share price is climbing again. Here’s what I’d do (23/08/2021 - The Motley Fool UK)
    Rolls-Royce Group (LSE: RR) is gaining of late. And my Motley Fool colleague Rupert Hargreaves has recently offered a thought-provoking take on it. Well, my thoughts, at least, are provoked as I watch the Rolls-Royce share price continue the climb that’s taken it up 30% in a little over a month. That does just reverse an earlier decline, though, and the shares are flat overall in 2021. I have been making a mistake, along, I think, with a lot of other investors. I’ve been thinking about Rolls-Royce as if, once we’re finally out of all the pandemic damage, it will still be the same company of old. Until something like low-orbit space travel becomes economically feasible, we’re stuck with conventional aviation for getting get us any distance around the globe in a reasonable time. And the demand for Rolls-Royce’s engines, and maintenance and repair services, will still be there. That’s a bullish factor supporting the Rolls-Royce share price, for sure. Pandemic fears But two things might have changed the aviation business for good. One is the Covid-19 pandemic. Or rather, the knowledge of what a pandemic can really do. Until 2020, a global pandemic had been one of those end-of-the-world threats that we see in post-apocalyptic movies. Though scientists had been warning of the inevitability for decades, nobody really paid much attention to them. We now know the reality, and that we’ve been very lucky that Covid-19 has had such a relatively low mortality rate (so far, he says, not wanting to tempt evolution into coming up with a far worse variant). Will that hold people back from the skies? I’ve seen airlines talking of achieving 75% of pre-pandemic capacity by the end of 2021. But I have my doubts, and I see a real chance we won’t get back to the old ways for a while yet. Or the old Rolls-Royce share price. Hydrocarbon crisis Then there’s the fossil fuel energy crisis. The development of renewable energy sources for domestic and industrial needs, and for motor transport, is well under way. But there’s little sign of any commercially viable substitute for hydrocarbon-based aviation propulsion being realised any time soon. When alternative — presumably electric — aero engines become a thing, Rolls-Royce will surely be in the vanguard of their development. It’s not something that a newcomer is likely to take over, and the existing engine makers enjoy some formidable barriers to entry. But in the years before such technological change, how badly will hydrocarbon-based aviation suffer? It could be significant. Where will the Rolls-Royce share price go? Anyway, the bottom line is what does all this mean for the Rolls-Royce share price? In the medium term, I think it’s all about getting bums on plane seats again. To be specific, enough of them to get Rolls back to sustainable profit before its current liquidity becomes strained. If that happens, I think it could climb again. But for the long term, I don’t think we have a new valuation basis worked out yet. So I shall wait. The post The Rolls-Royce share price is climbing again. Here’s what I’d do appeared first on The Motley Fool UK. FREE REPORT: Why this £5 stock could be set to surge Are you on the lookout for UK growth stocks? If so, get this FREE no-strings report now. While it’s available: you’ll discover what we think is a top growth stock for the decade ahead. And the performance of this company really is stunning. In 2019, it returned £150million to shareholders through buybacks and dividends. We believe its financial position is about as solid as anything we’ve seen. Since 2016, annual revenues increased 31% In March 2020, one of its senior directors LOADED UP on 25,000 shares – a position worth £90,259 Operating cash flow is up 47%. (Even its operating margins are rising every year!) Quite simply, we believe it’s a fantastic Foolish growth pick. What’s more, it deserves your attention today. So please don’t wait another moment. Get the full details on this £5 stock now – while your report is free. More reading Is the Rolls-Royce share price a value trap? Could the Rolls-Royce share price hit £1.50? Should I buy Rolls-Royce shares at 112p? Better buy for September: Aviva (LSE:AV) or Rolls-Royce (LSE:RR)? Shares to buy now: IAG (LSE: IAG) or Rolls-Royce (LSE: RR)? Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  46. What’s going on with the Rolls-Royce share price? (19/06/2021 - The Motley Fool UK)
    Over the past 12 months, the Rolls-Royce (LSE: RR) share price has essentially moved sideways. The stock has returned -1.5% since this time last year. By comparison, the FTSE All-Share Index has returned 22%. This is a bit of an unfair comparison because the pandemic has severely impacted Rolls-Royce. It suffered one of the most substantial drops in revenue and profitability of any large UK company.  It makes more sense to compare the performance of the Rolls-Royce share price to that of other pandemic-hit businesses such as IAG, easyJet and Tui. But even compared to these stocks, Rolls has underperformed. The three firms outlined above have returned 11%, 24%, and 47%, respectively, over the past 12 months. Tui has achieved this performance even though it’s been bailed out three times by the German government during this period.   Looking at these figures, I’ve been wondering, what’s going on with the Rolls-Royce share price?  Improving outlook  Rolls’ largest division is its aerospace business. This involves the sale and maintenance of engines for the civil aviation industry. The company gets paid based on the number of flying hours its machines rack up. Therefore, when the aviation industry was effectively grounded this time last year, group revenues plunged.  Since then, the industry has started to recover. Air traffic around the world is currently around two-thirds of 2019 levels. As the outlook for the sector has improved, it’s had a positive impact on Rolls’ outlook. The company expects to be cash flow break-even in the second half of the year. This should draw a line under its pandemic losses.  Unfortunately, it seems as if the market is sceptical the company can hit this target. That appears to be the primary reason why the Rolls-Royce share price has underperformed.  It wouldn’t be the first time the company has missed targets. In the past, the group has repeatedly overpromised and underperformed. Therefore, I think the market doesn’t believe in management’s outlook.  Is the Rolls-Royce share price a buy?  I reckon this could be an opportunity for risk-tolerant investors. Despite its improving outlook, the stock still looks cheap. Although there’s always going to be the risk that the company will miss management’s growth targets.  With that being the case, I’d buy the stock for my portfolio today as a speculative recovery play. However, I’m well aware this isn’t a risk-free investment. I think there’s a very high chance the company will underperform this year. If it does, the stock could continue to languish.  That’s why I’d only buy a small speculative position for my portfolio. While I think the Rolls-Royce share price has recovery potential, the global travel and aviation industry outlook is incredibly uncertain. Unfortunately, there’s nothing the company can do about this uncertainty.  The post What’s going on with the Rolls-Royce share price? appeared first on The Motley Fool UK. One FTSE “Snowball Stock” With Runaway Revenues Looking for new share ideas? Grab this FREE report now. Inside, you discover one FTSE company with a runaway snowball of profits. From 2015-2019… Revenues increased 38.6%. Its net income went up 19.7 times! Since 2012, revenues from regular users have almost DOUBLED The opportunity here really is astounding. In fact, one of its own board members recently snapped up 25,000 shares using their own money… So why sit on the side lines a minute longer? You could have the full details on this company right now. Grab your free report – while it’s online. More reading Should I buy Tirupati Graphite shares? Will the Rolls-Royce share price ever get back to 200p? Would I buy Rolls-Royce shares or International Consolidated Airlines Group shares? Where will the Rolls-Royce share price go in June? What’s happening to the Rolls-Royce share price? Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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  47. Rolls-Royce shares: Norway blocks its sale. Should I be worried? (26/03/2021 - The Motley Fool UK)
    Rolls-Royce (LSE: RR) shares are in the spotlight again. The engine maker recently released its full-year results, which revealed it made a loss in 2020. I’ve commented on them previously, but I wasn’t surprised by the news. Especially given how the pandemic hit the travel industry last year. The stock is now in the limelight after the sale of a business was blocked by the Norwegian government. But I’m not worried about this and I’d still buy Rolls-Royce shares in my portfolio. Here’s why. Blocked sale Disposing businesses is part of Rolls-Royce’s recovery plan. It intends to raise at least £2bn from the sale of its assets by 2022. But the disposal strategy has faced a hurdle. Rolls-Royce’s sale of Bergen Engines to the Russian company TMH Group has been halted by the Norwegian government. The reasons were based on national security grounds. The Norwegian government said that “the technology possessed by Bergen Engines, and the engines they produce, would have been of significant military strategic interest to Russia, and would have boosted Russian military capabilities”. So what does this mean for Rolls-Royce shares now? I’m not too concerned about the news. Of course, it puts a spanner in the works for Rolls-Royce but this was only a small sale. The Bergen disposal would have raise approximately £130m. This is a drop in the ocean compared to the bigger £2bn total Rolls-Royce expects to raised from the sale of its assets. The shares took a hit on the news, but I think this was a reality check that the FTSE 100 firm isn’t out of the woods yet. It’s worth noting that Rolls-Royce has a plan but it won’t be smooth sailing. Rolls-Royce released a statement in response to the blocked sale. For now the disposal process has been paused but the company is keen to sell the business. Rolls-Royce is now working with the Norwegian government to “swiftly find another option”. Bright side I don’t think things are all bad for the engine maker. For now it has enough liquidity to weather the coronavirus storm. It has raised money from a rights issue and there are sufficient credit facilities in place. According to its 2020 full-year results, approximately 30% of Rolls-Royce’s revenue comes from its defence division, which includes contracts with the UK and US governments. This should provide the company with some revenue stability and visibility. The defence division should remain robust especially after it has 90% order cover for 2021. I like that Rolls-Royce has high barriers to entry and a strong brand, which should hold the business in good stead. The long road to recovery I don’t underestimate that Rolls-Royce has a long journey ahead to recovery. The pandemic hit its main business of producing and servicing aircraft engines very hard. Rolls-Royce shares are highly dependent on the vaccine roll-out as well the easing of lockdown restrictions. The stock is likely to be sensitive to delays in returning to pre-coronavirus normality. For now I’d buy the stock in my portfolio. I reckon the company has done enough to survive and the worst it behind it. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Should I buy Rolls-Royce shares for my portfolio today? Will the Rolls-Royce share price reach 150p this year? Can management use technology to boost the Rolls-Royce share price? Can the Rolls-Royce share price surge if it overcomes this huge trend? Rolls-Royce shares are nudging higher. Should I buy now? Nadia Yaqub has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post Rolls-Royce shares: Norway blocks its sale. Should I be worried? appeared first on The Motley Fool UK.
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  48. The Rolls-Royce share price is rising. Should I buy shares now? (10/03/2021 - The Motley Fool UK)
    Shares in Rolls Royce (LSE: RR) have moved around a fair bit lately. The share price is up 10% so far this year. In this past month alone it’s put on 20%. That performance hasn’t been enough to get the Rolls-Royce share price back to where it was, though — it’s still 40% lower than this time last year. Here I will look at why the share price has been rising and consider whether I ought to add Rolls-Royce to my portfolio right now. The Rolls-Royce share price received a vaccine boost The company’s recent share price increase has coincided with growing vaccination roll out. As an aeroplane engine maker and servicer, the company’s fortunes are tied to demand for air travel. Rising vaccination rates ought to see more countries ease travel restrictions. That is good for Rolls-Royce, as the greater utilisation of engines, the higher the demand for servicing. However, while vaccination rates are rising, air travel is still nowhere near its normal level. The company clearly expects demand to increase. It said it should be cash flow positive in the second half of this year. However, its prior estimate of how fast air travel would return was adjusted downward. I think it is too early to say with any certainty whether air travel demand will actually come back to anything close to normal levels even by the end of this year. The company has substantial liquidity so should be able to ride out the storm even if it doesn’t turn cash flow positive in the second half. But that liquidity has come at a cost, most notably a large dilution of shares in last year’s rights issue. The challenge to the Rolls-Royce share price isn’t just about demand from airlines. I think it also reflects some investor nervousness that the company’s much-enlarged share float reduces the benefit to the shares even if the business does recover fully. Hunting for better options I find some aspects of the investment case for Rolls-Royce persuasive. It has a well-admired engineering expertise and reputation. The aircraft engine market is expensive and difficult to enter, so players like Rolls-Royce have a position of strength. Its installed base of engines virtually guarantees service revenues for years and sometimes decades to come, although a demand shock such as a future pandemic could affect them. In that sense, the company comes close to having the sort of economic moat Warren Buffett appreciates. But the pandemic has shown up some weaknesses in the company’s business model too. It is highly sensitive to demand, which is largely outside its control. Even with budget savings such as the elimination of 7,000 positions last year, the fixed costs of developing and servicing plane engines are high. That is one reason I think the Rolls-Royce share price is still well below its former level, even after the recent increase. Life getting back to normal will improve business prospects for the company. But for pandemic recovery picks I am more attracted by pub operators like J. D. Wetherspoon or transport companies like Go-Ahead. Their structural economics appeal to me more than those of Rolls-Royce, and demand recovery could come faster than it may for the aero engines market. “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner. But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared. What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations. And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! More reading Tesla has fallen 35%. How I think it affects the Rolls-Royce share price The Rolls-Royce share price: is this best investment for 2021 and beyond? The Rolls-Royce share price is around 110p. Should I buy shares now? Rolls-Royce shares: here’s how much a £1,000 investment a year ago would be worth today The Rolls-Royce share price is rising. Should I buy now? christopherruane has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. The post The Rolls-Royce share price is rising. Should I buy shares now? appeared first on The Motley Fool UK.
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  49. The Rolls-Royce share price could be on the road to recovery (27/07/2021 - The Motley Fool UK)
    With the Rolls-Royce (LSE: RR) share price dropping below 100p, I am tempted to buy this stock before the civil aerospace company’s recovery becomes fully realised. But with possible further damage to the aviation sector brewing because of new variants of coronavirus such as the Delta variant, some investors might see this share as one to be avoided. Here, I explain why I will be betting on a favourable future in 2021 for Rolls-Royce. Another lockdown could be devastating for Rolls-Royce First things first, I need to look at what another lockdown could mean for the Rolls-Royce share price. With no planes in the air due to travel restrictions, Rolls-Royce would continue to lose revenue on its maintenance contracts as these are dependent on airtime. This would be a big blow for the company because these contracts contribute to Rolls-Royce’s main bulk of revenue, whereas the company only just about breaks even on the initial sale. However, this is just speculation for now, and the situation looks a lot better than it did last year. Rolls-Royce is not making any adaptations to its recovery plan for the time being, and with air travel having its busiest weekend since the pandemic hit, I am quite hopeful that this is a sign of positive things to come. Rolls-Royce restructuring programme Following on from its cost saving plan from 2020, Rolls-Royce estimated that it saved £1bn beyond its expectations before the pandemic arrived. The company now aims to reach £1.3bn in operating costs and capital spend savings by the end of next year. Of course, we can see that Rolls-Royce is steadfastly committed to its restructuring programme as it temporarily shut down its plant in Renfrewshire this week. With the company continuing to do good on its word to cut costs, I am convinced that its commitment will lead to more investor confidence on the Rolls-Royce share price. Further, the balance sheet looks a lot healthier than compared to last year, and the threat of bankruptcy is no longer in sight. This is mainly because the company secured £7.3m in additional liquidity in 2020. If the company meets its expectations of turning cash flow positive in the second half of 2021, then I think this success will attract a lot of buyers. This could lead to a very profitable return for me if I add this share to my portfolio before Rolls-Royce announces its interim results on the 5th of August. Will the Rolls-Royce share price recover? The dark times of Covid-19 could very well be behind us, but with this new Delta variant and any more variants to come, the situation could change very quickly. The effects of another lockdown would most likely damage Rolls-Royce’s progress, and its thoughts of turning cash flow positive would become an all-forgotten dream. However, I think that the current situation points in a more positive direction. Passengers are flying again, and the government is putting more countries on the green list. I also have confidence that Rolls-Royce’s restructuring procedure will put it on the road to recovery. Whilst it may still be a bit of a bumpy ride for the Rolls-Royce share price, I will be buying this stock as a recovery play. The post The Rolls-Royce share price could be on the road to recovery appeared first on The Motley Fool UK. Our #1 North American Stock For The ‘New-Age Space Race’ Billionaires like Jeff Bezos, Bill Gates, Elon Musk, and Mark Zuckerberg are already betting big money on the ‘new-age space race’, and for one very good reason… …because this is an industry that according to Morgan Stanley could be worth $1 TRILLION by 2040. But the problem is most of their investments are in private companies — meaning they’re largely off-limits for everyday investors. Fortunately, our team of analysts have identified one little-known company that’s at the cutting-edge of the space industry, and is currently trading at what looks like a VERY reasonable valuation… …for now. That’s why I want to urge you to check out our premium research on this top North American space stock ASAP. Simply click here to see find out how you can grab your copy today More reading I’d avoid the Rolls-Royce share price and buy this FTSE 100 stock instead Can the Rolls-Royce share price hold out until the end of 2021? 5 reasons to buy Rolls-Royce shares – and why I’m not Are these 2 FTSE 100 travel stocks a bargain? Would I buy Rolls-Royce shares at 8-month lows? John Town has no position in the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
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