UK stock report - Rolls-Royce Holdings

UK

UPDATE: Rolls-Royce underperforms 84% of the market, announces dividend April 20, 2018 16:30 BST

NEWS BITES - EUROPE

Rolls-Royce Holdings PLC (L:RR.), the 2nd largest Aerospace & defense company by market cap in the United Kingdom, has decreased GBX10.60 (1.2%) from its last trading session of April 19 to close at GBX866.20. Compared with the FTSE 100 Index which rose 39.2 points (0.5%) in the day, the relative price change was -1.7%. The fall was exacerbated by firm volume of 1.1 times the average daily volume of 5.2 million shares. In the United Kingdom market of 1,337 stocks and 107 units traded today, the stock has a 4-day relative price strength of 16 indicating it has underperformed 84% of the market. A price fall combined with a low relative strength is a bearish signal.

ROLLS-ROYCE ISSUED 8 NEW PATENTS IN THE WEEK OF APRIL 17, 2018

Rolls-Royce (RR.) has been issued 8 new patents by the USPTO and EPO.

UPCOMING EVENT: DIVIDEND

The company announced a dividend of GBX7.10 per share; ex-dividend date is Thursday, April 26; the payable date is Monday, July 02.

THE PAST TWO YEARS

Rolls-Royce gains 28% in 2 years

Rolls-Royce Holdings PLC (L:RR.), has gained GBX190.40 (or 28.2%) in the past two years to close at GBX866.20. Compared with the FTSE 100 Index which has risen 15.0% over the same period, this is a relative price increase of 13.1%.

Highlights in today's Report:

SECTION 1 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Technicals, Low Performance Indicators

SECTION 2 BULLISH SIGNALS

Fundamentals, Technicals, High Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Volatility, Moving Annual Return, Beta & Alpha, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Top Management, Issued Capital

SECTION 7 REPORTED BUYING AND SELLING

SECTION 8 PATENTS

SECTION 9 STOCK BUZZ

SECTION 1 ROLLS-ROYCE BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 1.4%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 2.7% is 50.2%. This suggests the stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 172.8 which compares unfavourably with the Joseph Piotroski benchmark of 5.

1.2 Overvaluation [compared with sector average]:

+ Return on Capital Employed 0.9% [8.1%].

+ Dividend yield of 1.4% [3.4%].

1.3 Technicals:

Downtrend: The stock dropped 1.2% on high volatility today.

+ The price decreased 0.1% in the last week and sank 4.1% in the last month.

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 871.91 minus the 26-day EMA of 872.13 is negative 0.22 suggesting a bearish signal. Both EMA prices are falling, another bearish signal.

+ The present value of GBP1,000 (PV1000) invested five years ago in Rolls-Royce is GBP945, including a capital loss of GBP148 and dividend reinvested of GBP93.

+ 5 years Multiplier in GBP = 0.945x

+ Compound Annual Growth Rate (CAGR) in GBP = -1.1%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Rolls-Royce is $US870, including a capital loss of $US216 and dividend reinvested of $US86.

+ 5 years ago GBP 1 equalled USD 1.53

+ 5 years Multiplier in USD = 0.87x

+ Compound Annual Growth Rate (CAGR) in USD = -2.8%

Apr 20, 2018: GBP 1 equals USD 1.41

1.4 Low Performance Indicators:

DescriptionValueRank In Market
Total Debt to Equity4.9In Bottom 1%
EBITDA Margin %0.9In Bottom 1%
Return on Capital Employed [ROCE] %0.9In Bottom 2%
Price Change %-1.2In Bottom Quartile

SECTION 2 ROLLS-ROYCE BULLISH SIGNALS

2.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.6. Compared with the rest of the market the stock is undervalued.

+ The company is cash rich with Cash to Market Capitalisation at 17.4%.

2.2 Technicals:

+ The present value of GBP1,000 (PV1000) invested one year ago in Rolls-Royce is GBP1,106, comprising a capital gain of GBP91 and dividend reinvested of GBP15.

PV10001-week1-month1-year
RR.L9999591,106
FTSE 100 Index1,0141,0441,035

2.3 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverGBP51.4 million (US$72.4 million)In Top 3%
Cash to MCap %17.4In Top Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Rolls-Royce is at a discount of 12.5% to its 12-month high of GBX989.63 on August 01, 2017. It is also at a premium of 9.8% to the 12-month low of GBX788.74 on April 21, 2017.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 2 of the last 5 years. An investment a year ago in RR. would have produced a return of 10.5%.

RR.Close (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Apr 20866.211.79.11.510.5
1 Yr ago794.1711.717.51.719.2
2 Yrs ago675.823.37(26.9)2.5(24.3)
3 Yrs ago923.922.4(4.2)2.3(1.9)
4 Yrs ago964.2220.5(5.2)2(3.1)

Close 5 years ago GBX1,016.74

3.3 Beta & Alpha:

+ Beta: the Beta of Rolls-Royce stock is 1.3. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

+ Alpha: the Alpha of the stock is 8.0. The actual return of 6.05% exceeded the expected return of -1.9%, reflecting outperformance.

3.4 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ London: RR.L 5,937,295 [VI of 1.1] volume 99.9% of aggregate. Price: GBX866.20.

+ OTC Pink: RYCEF.PINKSHEETS 3,486 [VI of 0.2] volume 0.06% of aggregate. Price: $US12.32. Using the current exchange rate of USD1 equals 71.0262GBX, The shares are at a 1.0% premium to the close price on London.

+ Aggregate volume: there were 5.9 million shares of Rolls-Royce worth GBP51.5 million traded today. The aggregate volume was 1.1 times average trading of 5.2 million shares.

The turnover rate in the 12 months to date was 66.1% (or a turnover period of 1 year 6 months). This average length of ownership of the stock at 50.3 times the average holding period of 11 days for stocks in the FTSE 100 Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4 RANKING

4.1 Global Rank [out of 47,666 stocks] and Rank in the Europe Region [out of 8,559 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)22.4B659167
Total Assets (US$)35.8B1,150275
Revenue (US$)21B692185
Net Profit (US$)(5.7B)42,1966,988
Net Profit Margin %(27.0)33,6155,598
Yield %1.315,4302,905
US$* Change (1Year) %31.110,1582,244

Apr 20, 2018: GBP 1 equals USD 1.41

4.2 Independent Ratings

+ FT 500:

Rolls-Royce Holdings PLC is the 203rd largest by revenue in the FT Global 500.

+ Industryweek 1000:

It is a new entrant in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2016, ranked 192.

+ Forbes 2000:

It is the 418th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 592/1372 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 57.

+ Vanguard Total World Stock ETF 7517:

The stock was one of 7517 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 35,296 shares in the period Nov 30, 2017 to Jan 31, 2018 worth $US30,545,243 at an estimated Volume Weighted Average Price (VWAP) of $US865.4024. As at Jan 31, 2018, the Vanguard Total World Stock ETF held 488,866 shares worth $US5,993,996 or 0.04% by value of the ETF's portfolio [Ranked 510 out of 7517 by value and 32 out of 314 for United Kingdom].

SECTION 5 ROLLS-ROYCE FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)21.119.319.7
Pretax (USD)(6.5B)225.5M94.4M
Net (USD)(5.7B)118.4M97.2M
EPS (GBP)(2.2)0.040.04

Net profit slumped from US$118.4 million in 2015 to a loss of US$5.7 billion in 2016. Earnings Per Share (EPS) fell from 4.0 GBX to -GBP2.20.

5.2 Annual Report for the year ended December 31, 2016 (year-on-year comparisons with previous corresponding period)-

Favourable Changes:

+ Sales revenue up 9% from GBP13.7b ($US20.4b) to GBP15.0b ($US18.5b).

+ Total non-current assets to Total Assets up from 45.7% to 49.7%.

+ Fixed Assets to Total Assets up from 15.6% to 16.1%.

Unfavourable Changes:

+ EBIT Margin down from 11.8% to 0.9%.

+ EBIT to total assets down from 7.2% to 0.5%.

+ Interest expenses to Sales up from 10.6% to 31.9%.

+ Administration expenses to Sales up from 7.8% to 14.8%.

+ Interest revenue to Sales down from 0.8% to 0.6%.

+ Total liabilities to Total assets up 19.2% from 0.8 to 0.9.

+ Current ratio down 8.8% from 1.5 to 1.4.

+ Working capital to total assets down from 17.7% to 13.0%.

+ Retained earnings to total assets down from 20.0% to 1.7%.

+ Total current assets to Total Assets down from 54.3% to 50.3%.

+ Total Liabilities to Operating Cash Flow of 16.8 compares unfavourably with the Joseph Piotroski benchmark of <4. This ratio has deteriorated by 6.1% from the previous year's ratio of 15.8.

Note:

+ Total revenue to total assets steady at 0.6.

+ Current Debtors to Total Assets up from 27.2% to 27.4%.

+ Intangibles to Total Assets down from 27.5% to 25.9%.

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue (GBX)
20 Apr 201811.7
20 Apr 201711.7
20 Apr 201623.37
20 Apr 201522.4
20 Apr 201420.5

SECTION 6 ROLLS-ROYCE PROFILE

6.1 Activities

Rolls-Royce Group plc is an integrated power systems company, operating in civil and defense aerospace, marine and energy markets. The Company serves customers in over 120 countries. Its gas turbine products are shipped to customers worldwide, by land, sea and air. It is a global provider of defense aero-engine products and services, with 18,000 engines in service for 160 customers in 103 countries. Its marine business has more than 2,000 customers and equipment installed on over 30,000 vessels worldwide, including those of 70 navies. The Company's energy business is a supplier of power systems for onshore and offshore oil and gas applications. The Company operates in four segments: Civil aerospace, Defense aerospace, Marine and Energy. During the year ended December 31, 2009, the Company acquired 58% interest in Tidal Generation Limited, 49% interest in Europea Microfusioni Aerospaziali S.p.A. and 33% interest in ODIM ASA.

6.2 Industry & Sector

Classification LevelName of Sector
Industry GroupAerospace & Defense
IndustryAerospace & Defense
Economic SectorIndustrials
Business SectorIndustrial Goods

6.3 Top Management

The chairman is Ian Davis, the chief executive officer is Warren East and the chief financial officer is Stephen Daintith.

6.4 Issued Capital

Based on 1,840,595,584 issued shares the market capitalisation is GBP15.9 billion (US$22.4 billion).

SECTION 7 REPORTED BUYING AND SELLING

Insider Buying

April 11: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Simon Kirby bought 17 shares worth GBP150 ($US212) on April 09. The purchase price was GBP8.85. The shares hit a 20-day high on the day.

April 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Frank Chapman bought 448 shares worth GBP3,956 ($US5,568) on April 09. The purchase price was GBP8.83. The shares hit a 20-day high on the day.

April 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Ruth Cairnie bought 220 shares worth GBP1,943 ($US2,734) on April 09. The purchase price was GBP8.83. The shares hit a 20-day high on the day.

April 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Kevin Smith bought 299 shares worth GBP2,640 ($US3,716) on April 09. The purchase price was GBP8.83. The shares hit a 20-day high on the day.

April 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Lee Hsien Yang bought 111 shares worth GBP980 ($US1,380) on April 09. The purchase price was GBP8.83. The shares hit a 20-day high on the day.

SECTION 8 ROLLS-ROYCE PATENTS

Issued April 17, 2018

Repair of gas turbine engine components [9,943,933]

In some examples, a technique includes delivering, using a material delivery device, material adjacent to a repair surface of a component and delivering, using a gas delivery device, a gas adjacent to the repair surface. The technique also may include delivering, from an energy source, energy to the material adjacent the repair surface to fuse the material to the repair surface; and receiving, by a computing device, at least one parameter indicative of at least one of a temperature or a geometry of the component. The technique may further include, responsive to the at least one parameter indicative of the at least one of the temperature or the geometry of the component, controlling, by the computing device, at least one processing parameter to control the temperature of the component.

Method of through-thickness reinforcing a laminated material [9,944,023]

A method of providing through-thickness reinforcement of a laminated material which includes a matrix material including a step of creating a locally heated zone in the laminated material so as to locally soften the matrix material by focussing a set of at least two energy beams at a location where through-thickness reinforcement is required and a step of inserting a reinforcement element through the thickness of the laminated material at the location of the locally heated zone to through-thickness reinforce the laminated material.

Composite component [9,945,234]

A composite component having a body formed from a plurality of fiber reinforced non-metallic layers. The body includes a delamination region configured so as to permit delamination; and a deflector region configured so as to resist delamination. In the event of delamination, delamination is deflected to and continues to propagate in the delamination region.

Turbine shroud with biased blade track [9,945,243]

A turbine shroud for a gas turbine engine is adapted to extend around a bladed turbine wheel and prevent gasses from passing over the blades without interacting with the blades. The turbine shroud includes a carrier, a blade track, and a plurality of biasing members. The biasing members locate the blade track relative to the carrier.

Gas turbine engine anti-icing system [9,945,247]

An anti-icing system for an engine section stator of a gas turbine engine. The system includes an environmental control system pre-cooler heat exchange system and a conduit. The environmental control system pre-cooler heat exchange system is configured to exchange heat between air bled from a compressor of the engine and bypass duct air. The conduit is configured to exchange heat from the pre-cooler heat exchange system to a heat transfer medium. The conduit is also configured to transfer the heat from the heat transfer medium to the engine section stator.

Segmented turbine shroud with seals [9,945,256]

A turbine shroud for a gas turbine engine includes a plurality of shroud segments arranged around a central axis. Each shroud segment includes a carrier segment, a blade track segment, and a radial seal element that seals a radial interface between the carrier segment and the blade track segment. The turbine shroud further includes a plurality of circumferential seals that seal circumferential interfaces between the shroud segments.

Locking fastener [9,945,413]

The present disclosure provides a multiple use threaded fastener having a plurality of redundant locking features. The fastener includes a threaded hollow lock bolt having a tapered internal wall constructed to threadingly engage a threaded aperture in a housing. A threaded lock stud having a tapered external wall is constructed to fit at least partially within the hollow lock bolt and threadingly engage the threaded aperture of the housing and engage the tapered wall of the hollow lock bolt.

Determination of ultrasonic inspectability [9,945,716]

The ultrasonic inspectability of a supplied part out of which a final component is to be machined is determined by following a set of inspection rules for ultrasonic inspection of the supplied part. The rules determine which parts of the polygon cannot be inspected by a scan at a given ultrasound beam angle (typical beam angles are 0.degree., +20.degree. and -20.degree. relative to the perpendicular direction to the edge) along a given edge of the polygon.

To view more details on these Patents, click here

SECTION 9 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

April 21: Rolls-Royce: Notice of Capital Markets Event & 2018 HY Results

As announced at our 2017 Full Year results, Rolls-Royce Holdings plc will be holding a Capital Markets event in London on Friday 15 June 2018.

Rolls-Royce Holdings plc also confirms the date of its 2018 Half Year results as Thursday 2 August 2018.

April 19: Rolls-Royce to supply innovative autocrossing system and propellers to 13 new ferries

Rolls-Royce Marine has signed a deal to supply its innovative Autocrossing system to a total of 13 new environmentally friendly ferries for the Norwegian company Fjord1. The vessels are currently being built by three yards in Turkey and two yards in Norway. All contracts also include two azipull propellers for each vessel with accompanying propeller control system from Rolls-Royce.

With this contract, Rolls-Royce has sold autocrossing to a total of 18 new ferries to operate along the coast of Norway, of which 16 have been ordered by Fjord1 and two by another Norwegian ferry company, FosenNamsos Sjo.

Dagfinn Neteland, CEO of Fjord1 said: "Our passengers will be part of the most environmentally friendly and modern transportation concept ever seen in Norwegian fjords.

April 17: Rolls-Royce to supply innovative autocrossing system and propellers to 13 new ferries

Rolls-Royce Marine has signed a deal to supply its innovative Autocrossing system to a total of 13 new environmentally friendly ferries for the Norwegian company Fjord1. The vessels are currently being built by three yards in Turkey and two yards in Norway. All contracts also include two azipull propellers for each vessel with accompanying propeller control system from Rolls-Royce.

With this contract, Rolls-Royce has sold autocrossing to a total of 18 new ferries to operate along the coast of Norway, of which 16 have been ordered by Fjord1 and two by another Norwegian ferry company, FosenNamsos Sjo.

Dagfinn Neteland, CEO of Fjord1 said: "Our passengers will be part of the most environmentally friendly and modern transportation concept ever seen in Norwegian fjords.

April 13: Rolls-Royce: Trent 1000 Package C Update

At our 2017 Full Year results on 7 March 2018 we outlined our management of certain Trent 1000 engine in-service issues and the estimated costs relating to our implementation of the solutions to address those issues.

As part of our ongoing inspection and testing of those engines we have decided to carry out additional engine inspections to those previously planned.

April 12: Rolls-Royce invests in Reaction Engines

Rolls-Royce announces it is investing in Reaction Engines Limited, the UK-based aerospace technology company. The investment is part of a strategic fundraising by Reaction Engines which will support the further development of the SABRE(TradeMark) concept, which combines air breathing rocket and associated technologies.

Paul Stein, Chief Technology Officer, Rolls-Royce said: "We are delighted to become a strategic investor in Reaction Engines Limited, an innovative UK company that is helping push the boundaries of aviation technology."

"Rolls-Royce is increasingly pioneering new technologies through partnership and collaboration.

State/Province/Country: United Kingdom

Country of Incorporation: United Kingdom

Exchange: London Stock Exchange

ISIN: GB00B63H8491

L:RR.; LON:RR.; LN:RR.; RR.L

PermID: 5033562382

RIC: RR.L

Rolls-Royce Holdings Plc

Source: www.BuySellSignals.com