Rolls-royce Share Discussion Threads

[buywell3] 21/5/2020 07:44

WB has invested too much in banks and other financials IMO

Will be interesting to see when he unloads his cash pile though

IMO maybe not this year

[svenice7] 20/5/2020 23:47

Also in FT today;Charles Armitage, an aerospace analyst at Citi, believes that while the downturn will be painful for Rolls-Royce the company may even be better placed than its competitors in the large-engine segment, given that it has a younger fleet and claims more than 50 per cent of the market.Airlines are already retiring scores of older aircraft to meet reduced demand. That installed base of newer engines will claim a disproportionate share of any wide-body recovery, he suggests. "The wide-body market will be lousy but it will be a little less lousy for Rolls-Royce than for others," he said. 

[svenice7] 20/5/2020 23:46

In FT today:"the group said it had access to facilities providing £6.7bn in liquidity."The difference is they are now heavily diversified, have much more liquidity and a much bigger installed base [of engines]. They should be able to trade through,"

[pallys] 20/5/2020 22:26

BBC:

"This morning's job losses are hardly unexpected - airlines have cut their flying hours by 90% or more, and Airbus and Boeing have slashed their production numbers for the next few years - but they are still a heavy blow to one of the UK's few world-class manufacturing companies.

While the details of where the cuts will fall have not been finalised, it is likely that two-thirds will go in the UK.

The company has already used the government's furlough scheme to help pay the wages of about 4,000 staff, but Warren East, Rolls-Royce's chief executive, said companies could not expect the government to continue such a scheme for several years.

There was also a clear hint this morning that some factories may close - the company said it would review its future manufacturing footprint.

Some questions remain for Roll-Royce. Investors are scratching their head about when the company's revenues - much of which rely on aircraft to be flying for money to flow - will return.

The company has not yet tapped its shareholders for more money - some expect that may eventually come."

[careful] 20/5/2020 20:46

Rolls Royce will survive.
Looking forward its highly efficient clean geared fan engine will be ready for about 2025.

This is a huge potential market, and the Airbus A320 and Boeing 737 size of aircraft may need to provide redesigned aircraft concepts post covid.

Wider bodies, more space, better air conditioning, and the new RR. state of the art engine will be likely to win orders.

And do not forget the other divisions of RR. including defence.
RR. will be around for a long time yet.

[slaccs] 20/5/2020 19:54

Porsche1945 - Things didn't go to plan at AML then so you thought you have a go at that other British icon, Rolls Royce. I think it's time you gave up this festering anger you have for all things British and hung up your jack boots.

[jackdaw4243] 20/5/2020 19:16

RR a basket case for a takeover,
Simple
shred the managers, shred the grads, shred the subs, shred the canteens , shred the overtime, shred the subcontractors and shred the gravy train of suppliers.

[svenice7] 20/5/2020 16:36

Good day today.Clearly been oversold.£3 next week.

[careful] 20/5/2020 14:50

Not sure if a long term RR. supplier is any better placed that the rest of us to predict if and when things will get back to normal.

There will always be a need for efficient new aero engines.
Maybe there will be collaborative projects and mergers.

A £5bn valuation on RR. is very low.

[patientcapital] 20/5/2020 14:45

The boss of a supplier to RR for eighty years was interviewed on R4 earlier. He expects it to take four to five years to see civil aviation business return to pre pandemic levels. Many jobs simply are not there anymore. His profits are expected to be circa 70% down.

In my view this is just the start. Markets track earnings, broadly speaking, and this market is doing no such thing.

[bdbiometric] 20/5/2020 14:29

https://www.derbytelegraph.co.uk/news/derby-news/rolls-royce-announces-plans-cut-4147926

[svenice7] 20/5/2020 12:09

Yes but the rich will carry on buying while the shares are low.

[minerve 2] 20/5/2020 12:08

careful

That to me suggests he hasn't lost it.

He will wait. Covid epidemic may or may not be past its peak but peak fallout hasn't happened yet.

Government support will soon run out and the end of government sponsored furlough may see a tide of redundancies.

[svenice7] 20/5/2020 12:07

He could quite easily be buying boeing and rolls royce.

[svenice7] 20/5/2020 12:07

Buffet owns all the credit agencies. Of course he will downgrade all airlines to triple CCC junk status, but he will be buying , why do u think he is so rich.

[careful] 20/5/2020 11:59

I watched extracts of Berkshire Hathaway's annual meeting recently.
Buffett admitted that they had underperformed the S&P recently and that it was difficult to outperform when the company is so huge.

The Fed has shut him out of the great deals he managed to make during the 2008 crisis.

Goldman Sachs took a huge investment from him during the financial crisis with a high coupon converted to shares in the future at a bombed out price.

This time the Fed provided enough cash for everyone, so Warren takes a big hit on his airline investment and parks some of his £137bn cash (15%) in near zero interest US treasuries.

He cannot see any value in the market.

[minerve 2] 20/5/2020 11:45

"Warren Buffett has lost his touch in recent years."

I don't think so.

He now just has factors working against him like massive amounts of capital that need a home and a over-priced market courtesy of QE and central banks.

You look at the really good companies, their PEs have hardly shifted, in fact many have increased their PEs post Covid.

The market will eventually correct, the PEs will come down, and many will lose money or have very poor investments over a very long period of time.

Buffett will not be one of them ( he has paid the price of stagnation already) - assuming he is still around.

[minerve 2] 20/5/2020 11:41

We can't copy Buffett because he has resources we just cannot match or copy. Contacts in Wall Street, face-to-face meetings with directors, zero cost float from insurance monies, never to be repeated growth in the US economy...I could go on.

Nevertheless there are lots of things you can learn from Buffett and others similar to him that will make you a better investor. You don't need to copy.

Common sense here would mean you don't invest until the picture of Covid fallout is clearer. But many will 'invest' and in fact they really are not investing at all because the outcomes are wide and uncertain. In reality, they are speculators, plenty of people go bust speculating - there is no common sense in that.

[careful] 20/5/2020 11:38

Warren Buffett has lost his touch in recent years.
Topped up here today.

The problem with the furlow scheme where HMG pays the wage bill, is that it will cause problems when it ends.
Most companies will manage quite well with a drastically reduced workforce.

The best managers will take this once in a lifetime opportunity to cut our inefficiency and waste and eliminate unproductive workers.
Many will not be invited back.

Warren East will make RR. lean and mean, a process he had already started.

[goblin99] 20/5/2020 11:34

He ditched Tesco and they went up significantly after he did. Be your own investor and avoid 'copying' other people. The only thing needed is common sense - simple.

[jonny_wright] 20/5/2020 11:17

Warren buffet ditched airlines as soon as he could, hardly a vote of confidence

[minerve 2] 20/5/2020 10:34

General contrarian investing is not what Buffett does.

I'm sorry to say this but Buffett would not touch RR anyway, even during good times.

[svenice7] 20/5/2020 10:19

Good point careful.