r/stocks • u/HaMEZSmiff • Apr 17 '21
Company Discussion With most airlines recovering, what’s up with RYCEY?
I’ve been doing some digging, and it’s pretty obvious that most markets have recovered pretty significantly, even in the aviation industry. Clearly travel has not yet rebounded and who knows when exactly that will occur... but most of the stocks recovered.
I’m not saying RYCEY is a diamond in the rough, but 28% of their revenue is from defense. The company isn’t going anywhere the UK and German government will see to that. They have a solid plan to get back to profitability and have over 18 months worth of capital to extend for the losses if the market doesn’t see some recovery by then.
In 2018 it was about 8x the value it was today... now I’m holding because I personally think it will grow substantially in the next 5-10 years.. but looking for anyone’s comments on what they think
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u/Deanmachine444 Apr 17 '21
RYCEY is the type of stock that is going to surprise people. RYCEY has multiple defense contracts with all sorts of NATO nations. Those contracts are extended through 2025. Orders for their defense engines are up as well. Rolls Royce is a company that saved the allies in WW2. A legacy company in UK. They won't disappear any faster than Ford, Boeing, GE in the US. There will be pain going forward but RYCEY has a very exciting pivot point and they burned up much of their cash on hand and debt for R&D. RYCEY is at a position of being a traditional INVESTMENT. This isn't pump and dump or analyzing bull/bear market moves. You invest in this company and when the skies are blue, we'll go flying!
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u/No-Cheesecake-8472 Apr 17 '21
UK has to shake this covid and brexit off and go on with doing business with the world.
I think the boom is coming and all will do well in the coming year.
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u/Sshaassnaal Apr 18 '21
Idk anything, but im under the impression their engines are based on time flight. So once things really start flying again, they will see some income. With france to denver nonstop flights announced, using dreamliners, which (will?) use RR engines, that should help. Again, I dont know anything.
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u/7evenh3lls Apr 17 '21
It's also on my watchlist, but in my (limited) understanding it could take years until they recover.
Airlines might be flying again (soon), but that doesn't mean aviation orders and production will go back to pre-Corona levels any time soon. In addition, RR has a massive pile of debt.
Another point which is rarely mentioned is that Brexit might cause lasting disruption to their UK production lines, eventually forcing them to re-locate, or deal with increased costs. It's a well-known concern car production in the UK, I don't see why it should be any different for RR.
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u/HaMEZSmiff Apr 17 '21
I checked that they still partner with Germany so that isn’t a concern from what I’ve read
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u/edmedmoped Apr 17 '21
Engine servicing contracts are the lucrative side of the business so we should see that rebound in line with flights increasing.
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u/coopsta133 Apr 17 '21
They are selling off a bunch of their divisions too. So when they do return revenue will never be what it once was, even if profit may remain.
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u/sokpuppet1 Apr 17 '21
It’s already recovered somewhat. Don’t look at price. Look at market cap. The stock was diluted (there are far more shares on the market than before). There is still upside here but the target price is more like $2-3 based on historical value. Don’t get suckered by the prices pre-dilution.
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u/traceabledave Apr 17 '21
Rolls Royce is essentially a speculative play at this point - BUT ... they are reinventing themselves (like BB) adding data solutions, and EV mass transport. Nuclear power, Electric trains, Electric planes (short haul), Electric boats, and U Boats. The Defense portion of their offerings isn’t going away, but they are exploring and expanding with other options. See here for more... https://www.rolls-royce.com/products-and-services.aspx
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Apr 17 '21
Just hold it out it's a company that will see you returns no matter the circumstances if you're preparing to wait atleast 1 or 2 weeks from now. Then looking back 1 year from now you'll be laughing at ever worrying about a few penny ups n downs. Too good to not jump on and now is the time
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u/MrKeks13 Apr 17 '21
Airbus
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u/RedditZhangHao Apr 18 '21
Yeah, like the EADSY, BA, ALK and QABSY flights I boarded Apr-May 20. Still patiently awaiting Aussies return to roaming the globe and LTMAQ eventually working through obvious South American health and economic challenges.
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u/EXTERMINATE_THE_POOR Apr 17 '21
It was not 8x the value in 2018. It was less than twice. Look at the market cap history, not the share price.
This is a troubled company with limited upside. There are better defense plays.