Dingdongler

I've wanted to buy shares in RR for ages, missed the real fall after Lehmans and as I've waited for another real dip they've just gone up and up.

Anyway, down about 10% since yesterday so an opportunity could be opening up.

Any thoughts?

Petem95

Probably a good long term buy as air travel in countries like China and India has a lot of potential to expand, but in the short term their reputation has taken a hit and if the Qantas failure was due to a design flaw and they have to recall all the Trent 900 engines it'll cost them a fortune and knock shares down further.

David Lock

Well if the engines do need a major fix which means 79 + 1 new one for Quaintass then that's going to knock a hole in the petty cash and I don't suppose they want to think about the 200 planes on order.

I suppose you could buy now and watch them fall by 50%. I think it's called doing a BP

dl

GlesgaKiss

I took a quick look at them yesterday after spotting them in the toplist of fallers and I was thinking the same, but they don't appear to have been paying a dividend since 2008 despite currently having a PE ratio of 5. Good value if the profits continue, but not a fan of otherwise healthy companies not paying dividends. Also, I'm a little hesitant because of how well they've been doing up until now (although obviously they are down a little over the last few days). Would prefer to buy something that's been ignored for ages and has had pretty boring price action, or something with a significant discount from its previous price.

Each to their own though, I'll no doubt miss the boat here. Another example was thinking about buying soft commodites/agriculture ETFs a while ago!

However, if people start cacking themselves like what happened at BP I think it would be a good buy at the right price!

Leslie

Could be bad news if the engine failure turns out to be a basic design failure. Very expensive to put right!

Les

GlesgaKiss

Markets open over there and qantas is down again. Seemingly there have been faults identified with 3 more Rolls Royce engines. Also something about another failure? No doubt the stock will be down more tomorrow.

Petem95

Yep, been doing a bit of research myself over the weekend (thought about diving into Rolls shares while they're down), but seems RR are also being sued by Phratt & Whitley over an apparently copy of their design, and it sounds like they may have a case, so again will put negative pressure on the shares.

I've decided to hold off buying any for the moment.

GlesgaKiss

Not good then. These situations probably aren't worth getting involved with unless the stock seems so cheap the risk can be justified. Will need to do some looking into it myself tomorrow I think... Just glanced at some of the fundamentals the other day. PE of 5 considering the price has doubled since the worst of the effects of the credit crunch seems cheap, but haven't looked back at past earnings or read reports to get an idea of how stable those sort of earnings might be. When I looked, it seemed they hadn't been paying dividends since 2008? So are the last earnings a fluke? Surely if they were that healthy they wouldn't have stopped dividends.

Dingdongler

Yes I came across the Whitley issue over the weekend as well, but that's been going on for some time and it didn't seem to affect RR shares before.

I'm hoping this could open another BP type opportunity for me. We need a period of uncertainty to drive the shares down. Even if RR are at fault markets always seem to over react so a buying opportunity will arise, as always it will be about timing.

I'll be watching closely.

alloy

Bought a wedge of these this morning, also hearing directors buying stock around these levels today. Some bullish notes out on the stock. Great company and most importantly BRITISH

Dingdongler

Thanks Alloy, they've had a little bounce back from the initial 3% fall this morning. Would really appreciate your input into this thread (as well as others inc Alan) in terms of updating us with info including any chartist/momentum analyses.

Dingdongler

Down another 2% today.

Any thoughts?

Petem95

I'm surprised how well these have held up in light of the issues with the A380 engines to be honest. I did spend a bit of time at the weekend looking into Rolls on the basis that I might dive in, but didn't in the end.

Other than Trent900 engine issues, Rolls are currently being sued by Phratt & Whitley regarding an aspect of the design of these engines and it sounds like this has potential to do them some damage;

http://www.telegraph.co.uk/finance/n...80-engine.html

Long term though, it's a big established firm and demand for air travel in China/India is only going to go one way....