Melrose Industries Share Discussion Threads

[essentialinvestor] 20/4/2022 14:16

rogue, MRO read across from SNR today. Got a tad lucky buying a few Senior yesterday.

As mentioned above not convinced we have seen the lows here, but let's see.

[roguetraderuk] 20/4/2022 14:13

EI, mro started to look a bit better as have a few other industrials last few days. possibly due to positioning, mkt having got overall quite bearish. even so the americans v quick to sell on the open and third time in the last six or seven trading sessions.

[essentialinvestor] 20/4/2022 14:13

Well the MRO longer term record is exceptional, with past performance being no
guarantee of future success proviso!.

A little unfortunate with the GKN, first covid hits, then chip shortages in automotive, now Russia sends commodity prices soaring and increases economic slowdown
risks.

A lot of bad news looks priced in to me, whether we have seen the low less sure on.

[netcurtains] 20/4/2022 14:06

EI: I'm not a day trader so I'm ok with volatility. I like value and good prospects.
ITs not always easy to spot firms that have good value and good future growth.
So, touchwood, this is one of those shares.
But its only a small position so no major harm done if I have guessed incorrectly.

[essentialinvestor] 20/4/2022 13:42

Just be mindful of the volatility here, MRO can move 10% in either direction
in double quick time. If you can live with that, then you should do nicely.

[netcurtains] 20/4/2022 13:38

Thanks for the info EI.
I've done the inverse of you - taken a small position here in Melrose and a larger position in Senior. Its probably a silly reason - being old I liked the name "Senior".
Ha ha

[essentialinvestor] 01/4/2022 15:26

rogue, just 3,400 shares so far. Made a not of your post yesterday, appreciated.

[roguetraderuk] 01/4/2022 14:23

ecm doing a nice pullback might see 1000 which would be interesting hopefully nobody gets any ideas about buying the dip here right now. 10 quid would be more constructive/sustainable for a bounce poss.

[roguetraderuk] 01/4/2022 14:18

at low end of days range doesnt look constructive to me. spx sold off so could bounce 1st of month but ft100 has held up v well today and never participated in yest downside so im wary there.

[essentialinvestor] 01/4/2022 13:58

Bought back a small amount under £1.25.

[essentialinvestor] 31/3/2022 10:55

rogue mentioned £1.21/22 yesterday on the SHA board as possible
buy areas on Melrose.

[essentialinvestor] 31/3/2022 10:43

1just, an 8% plus move in a day, as we just saw, is more likely to garner comments. There were multiple posts on the big downs days in early March, from memory.

[roguetraderuk] 31/3/2022 10:30

1justine, i wouldnt say so. staying in the mkt long term is what makes you the money. but everyone is susceptible to trying to reduce losses or compound gains when they can. doing it too often doesnt work in the long run. you try to pick your spots. besides i run a v lrg cash element to my portfolio at over 50%, so i try to generate some alpha that way.

[1justine] 31/3/2022 10:03

Interesting Psychology here. When the MRO price goes up, people pile in with comments and analysis. When the price goes down - silence. Cognitive dissonance or what?

[essentialinvestor] 29/3/2022 17:05

rogue, also out of BOY, that was under 1.300 shares.

Selling some in the hope of buying back lower will not keep working indefinitely,
so aware of that risk.

[roguetraderuk] 29/3/2022 16:51

EI, yes that or a part of rr. that overlaps. share price is an issue but not so much if deal smaller as they have cash on hand. not sure senior would be easy catch as other have tried and failed.

[essentialinvestor] 29/3/2022 16:45

GKN's defence contracts appear to be a problem area which Melrose are still
extricating the business from. I don't think that is a focus market.

Senior would be a nice size, if they wanted more sector exposure.
CEO has mentioned US HQ'd companies a more likely acquisition target,
obvs that can change.


As they are highly likely to issue shares to pay for a % of any acquisition,
MRO arguably need a significantly stronger share price first.

[roguetraderuk] 29/3/2022 16:43

EI, i sold my trade too, didnt like the us reversal which seems like it might gain legs as yield curve proper (2s and 10s) about to invert. we got a marginal invert in summer 2020 but that gdp drawdown was managed by printing. i think any recession will be technical as they will be cutting. but its something new for them to price in and that 4590 on the spx is a huge pivot. you gotta go at least 100 points higher or it wont go at all.

[roguetraderuk] 29/3/2022 16:40

yes darrin you are right gkn was bigger. and there are some areas where they work together on the engines and defence. its not beyond the realms of possibility. the thing about rr. after covid that there was the assumption they will need 1-2bn in a rights. not sure mro is able to do the bid (would need some cash element) and raise enough to provide the enlarge group with the balance sheet it needs. needs plenty of work on the numbers.

[essentialinvestor] 29/3/2022 16:17

Sold the remainder of my shares bought yesterday before the close,
hopefully can add those back again under £1.30 pence.

IF we get positive news on Russia/Ukraine talks then MRO trades comfortably Above £1.40
would expect.

[darrin1471] 29/3/2022 16:09

RR. Pay per air mile or any other service model would have been equally hard hit by covid as less flying = less servicing. These once in a lifetime events happen quite often in aviation. Financial crash, volcanoes, engine flaw and covid.
RR has a decade of visible service revenue on existing built engines which will return as flights resume. Having defense and industrial divisions helps RR survive the stormy waters. Good for the employees if not shareholders.
From memory there were activist investors calling for a shake up 4-5 years ago when RR had Trent 1000 design issues. They saw more value even when the share price was £10+(pre dilution)
As the government has a golden share there would be few buyers for RR. Backers may be willing to bankroll a MRO purchase if they see MRO management being able to realise the value in RR. Post brexit the government may be open to a big UK industrial conglomerate like GE or Siemens.
Again I am not sure, but from memory GKN was a much bigger fish than MRO when they launched a hostile takeover.
Holding both MRO and RR, I am inclined to move more from MRO to RR.

[jackdaw4243] 29/3/2022 14:55

With RR the sum of the bits will exceed the current valuation and pay as you use the engine has been a disastrous business model with Corvid and air travel.

[essentialinvestor] 29/3/2022 12:17

Nice, continues to outperform on risk on days.

[roguetraderuk] 28/3/2022 20:05

fully agree but they do have some common ground on the rolls engines and also defence side so its poss they might be interested in an arm or two. anything they can pick up in terms of defence to bulk up gkn (or merge with a gkn arm to then spin off later) i can see good things for. as i said before it has been assumed rolls needs 1-2bn still so it might be a deal that works for both sides. pure speculation on my part of course. i know nothing and whenever i think i know something i tell myself i actually dont!

[essentialinvestor] 28/3/2022 19:50

Would need to pay a minimum of £12-14 bn to get hold of RR, with debt on top,
Melrose not in that league, particularly with the MRO share price near current levels.