UK stock report - Rolls-Royce Holdings

UK

Rolls-Royce falls for a second consecutive day, a two-day fall of 0.4% October 20, 2017 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 fallen GBX1.0 (0.1%) for a second consecutive day on Friday. This brought its two-day fall to GBX4.0 (0.4%), compared with the FTSE 100 Index which fell 19.6 points (0.3%) in the two days for a relative price change of -0.2%. The cumulative volume in the 2 days was at about its average 2-day volume of 5.9 million shares. The stock last traded at GBX926.0.

ROLLS-ROYCE ISSUED 7 NEW PATENTS IN THE WEEK OF OCTOBER 17, 2017

Rolls-Royce (RR.) has been issued 7 new patents by the USPTO and EPO.

UPCOMING EVENT: DIVIDEND

The company announced a dividend of GBX4.60 per share; ex-dividend date is Thursday, October 26; the payable date is Friday, January 05.

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, Aggregate Volumes, Prices and Turnover Period

SECTION 4 RANKING

Global, Independent Ratings

SECTION 5 FINANCIALS

Financials Summary, 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

Acquisition, Corporate Wire

SECTION 1 ROLLS-ROYCE BEARISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 1.3%, divided by average yield of dividend yielding stocks in the FTSE 100 Index of 3.5% is 36.4%. 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% [5.7%].

+ Dividend yield of 1.3% [2.8%].

1.3 Technicals:

Overbought/Bearish/Resistance Signals:

+ The Stochastic indicator of 85.3 has broken through the overbought line of 80; this indicates the price is close to its 14-day high and is likely to revert to a downtrend.

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%

SECTION 2 ROLLS-ROYCE BULLISH SIGNALS

2.1 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.7. Compared with the rest of the market the stock is undervalued.

+ The company is cash rich with Cash to Market Capitalisation at 16.3%.

2.2 Technicals:

+ The price increased 1.5% in the last week and lifted 2.8% in the last month.

+ In the last three months the stock has hit a new 52-week high once.

+ The present value of GBP1,000 (PV1000) invested one year ago in Rolls-Royce is GBP1,237, comprising a capital gain of GBP219 and dividend reinvested of GBP18.

PV10001-week1-month1-year
RR.L1,0151,0281,237
FTSE 100 Index9991,0201,071

+ The present value of GBP1,000 (PV1000) invested five years ago in Rolls-Royce is GBP1,318, including a capital gain of GBP183 and dividend reinvested of GBP135.

+ 5 years Multiplier in GBP = 1.318x

+ Compound Annual Growth Rate (CAGR) in GBP = 5.7%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in Rolls-Royce is $US1,079, including a capital loss of $US32 and dividend reinvested of $US110.

+ 5 years ago GBP 1 equalled USD 1.61

+ 5 years Multiplier in USD = 1.079x

+ Compound Annual Growth Rate (CAGR) in USD = 1.5%

Oct 20, 2017: GBP 1 equals USD 1.32

2.3 High Performance Indicators:

DescriptionValueRank In Market
Today's TurnoverGBP78.2 million (US$103.1 million)In Top 3%
Price/MAP501.03In Top Quartile
Volatility %1.2In Top Quartile
Cash to MCap %16.3In Top Quartile

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Volatility:

+ Rolls-Royce is at a discount of 6.9% to its 12-month high of GBX994.50 on August 01. It is also at a premium of 47.1% to the 12-month low of GBX629.54 on January 05.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in RR. would have produced a return of 23.5%.

RR.Close (GBX)Dividends (GBX)Capital Gain / (Loss) %% YieldAnnual Return %
Oct 2092611.721.91.523.5
1 Yr ago759.4220.9717.93.321.2
2 Yrs ago643.9232.37(17.5)4.1(13.4)
3 Yrs ago780.631(22.2)3.1(19.2)
4 Yrs ago1,003.9319.528.32.530.8

Close 5 years ago GBX782.71

3.3 Beta:

+ Beta: the Beta of Rolls-Royce stock is 0.5. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.

3.4 Aggregate Volumes, Prices and Turnover Period:

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

+ London: RR.L 8,447,621 [VI of 1.4] volume 99.93% of aggregate. Price: GBX926.0.

+ OTC Pink: RYCEF.PINKSHEETS 5,860 [VI of 0.3] volume 0.07% of aggregate. Price: $US12.10. Using the current exchange rate of USD1 equals 75.93GBX, The shares are at a 0.8% discount to the close price on London.

+ Aggregate volume: there were 8.5 million shares of Rolls-Royce worth GBP78.3 million traded today. The aggregate volume was 1.4 times average trading of 5.9 million shares.

The turnover rate in the 12 months to date was 67.7% (or a turnover period of 1 year 5 months). This average length of ownership of the stock at 74.0 times the average holding period of 7 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 47,824 stocks] and Rank in the Europe Region [out of 8,439 stocks]

DescriptionValueGlobal RankIn Eur Region
MCap (US$)22.5B667175
Total Assets (US$)33.7B1,157279
Revenue (US$)19.7B718185
Net Profit (US$)(5.3B)42,2337,008
Net Profit Margin %(27.0)33,3615,638
Yield %1.315,2382,813
PV$1000 (1Year) US$*1,32511,3982,528
US$* Change (1Year) %31.511,4342,547

* 1 year ago GBP 1 = USD 1.23

Oct 20, 2017: GBP 1 equals USD 1.32

4.2 Independent Ratings

Rolls-Royce Holdings PLC was ranked 193 in the Industry Week list of the world's largest 1000 manufacturers by Revenues in 2015; a deterioration over a year from rank 172 in 2014.

It is the 203rd largest by revenue in the FT Global 500.

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

It is placed 534/1287 in BSS News Bites' ranking of United Kingdom performers in the past year, a percentile ranking of 59.

SECTION 5 ROLLS-ROYCE FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)19.918.318.6
Pretax (USD)(6.2B)212.9M89.1M
Net (USD)(5.4B)111.8M91.8M
EPS (GBP)(2.2)0.040.04

Net profit slumped from US$111.8 million in 2015 to a loss of US$5.4 billion in 2016. Earnings Per Share (EPS) fell from 4.0 GBX to -GBP2.20.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (GBX)
20 Oct 201711.7
20 Oct 201620.97
20 Oct 201532.37
20 Oct 201431
20 Oct 201319.5

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
Business SectorIndustrial Goods
Industry GroupAerospace & Defense
IndustryAerospace & Defense
Economic SectorIndustrials

6.3 Top Management

The chairman is Ian Davis, the chief executive officer is Warren East and the chief financial officer is David Smith.

6.4 Issued Capital

Based on 1,840,579,426 issued shares the market capitalisation is GBP17 billion (US$22.5 billion).

SECTION 7 REPORTED BUYING AND SELLING

Insider Buying

October 10: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Eric Schulz bought 16 shares worth GBP146 ($US193) on October 09. The purchase price was GBP9.13. The shares hit a six-day low on the day.

October 10: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Simon Kirby bought 17 shares worth GBP155 ($US205) on October 09. The purchase price was GBP9.13. The shares hit a six-day low on the day.

October 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Kevin Smith bought 289 shares worth GBP2,646 ($US3,456) on October 09. The purchase price was GBP9.15.

October 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Frank Chapman bought 433 shares worth GBP3,964 ($US5,178) on October 09. The purchase price was GBP9.15.

October 09: Rolls-Royce director buys

Rolls-Royce (L:RR.) director Lee Hsien Yang bought 108 shares worth GBP989 ($US1,292) on October 09. The purchase price was GBP9.15.

SECTION 8 ROLLS-ROYCE PATENTS

Issued October 17, 2017

Fixture apparatus [9,789,542]

Fixture Apparatus and methods of manufacturing fixture apparatus. Fixture apparatus comprising: a first body to at least partially support an object, the first body including a structure having variable stiffness along at least a first axis of the first body.

Marine cathodic protection system [9,790,601]

A marine cathodic protection system configured to protect a metal structure exposed to seawater from corrosion. The system includes a first anode provided on or adjacent the protected metal structure at a first position. The first anode is exposed to seawater, is electrically insulated from the protected metal structure, and is formed of a metal having a greater negative potential than the protected metal. The system further includes a second anode provided on or adjacent the protected metal structure at a second position. The second anode is electrically connected to the first anode. The first position is preferably substantially submerged in said seawater such that the protected metal and the first anode cooperate to define a seawater battery configured to apply an electrical current to the second anode, the second anode thus being an impressed current anode.

Rotor blade manufacture [9,790,798]

A method is provided of processing one or more blades of a row of blades which forms part of a rotor for a gas turbine engine. The method includes: providing a rotor disc having a slot for mounting one or more blades; applying tape at one or both sides of the slot such that when the blades are loaded in the slot the tape reduces a range of tilt angles which can be adopted by the blades; loading the blades in the slot; and performing a processing operation on the loaded blades.

Method of forming an inflated aerofoil [9,790,800]

There is proposed a method of forming an inflated aerofoil (1), the method comprising the steps of: forming a layered, planar pre-form (30); providing at least one stress-relieving opening (44, 45, 46, 47) through the pre-form; hot creep forming and inflating the pre-form (30) to form an intermediate aerofoil; and subsequently removing material from the intermediate aerofoil, including at least a region containing the or each stress-relieving opening (44, 45, 46, 47), to form a finished aerofoil.

Fuel manifold and fuel injector arrangement for a combustion chamber [9,790,862]

Each fuel injector has a main nozzle and pilot nozzle. A main fuel manifold to supply fuel to the main nozzle of each fuel injector and pilot fuel manifold to supply fuel to the pilot nozzle of each fuel injector. The main fuel manifold includes plurality of flexible main fuel pipes. Also, plurality of cross-piece connectors including a stem and four arms. The stem of each connector mounted on one fuel injector. The first and third arms extend in opposite directions from the stem and second and fourth arms extend in opposite directions from the stem. Each fuel pipe interconnects the first arm of one connector with a third arm of an adjacent connector and each connector so the first and third arms are at an angle relative perpendicular to the axis of the annular combustion chamber casing so the main fuel manifold extends around the combustion chamber casing sinusoidally.

Rotary friction welding [9,791,075]

A method providing a first tubular workpiece having a first weld surface at an end thereof, and a second tubular workpiece having a second weld surface at an end thereof; aligning the workpieces on a common axis with the weld surfaces facing each other, rotating one workpiece about the axis relative to the other workpiece, and engaging the first and second weld surfaces such that the rotation raises the temperature at the weld surfaces to create a weld interface; and ceasing the rotation and allowing the weld interface to cool to weld the workpieces together at the interface. The first weld surface is an apex region of an annular projection at the end of the first workpiece, on a longitudinal section through the aligned workpieces the annular projection having a profile in which radially inner and outer side surfaces of the annular projection taper towards the apex region.

Rotating blade analysis [9,791,311]

Methods are provided for: (i) measuring the position of the blade stagger angle axis for one or more blades of a row of blades attached to a rotor, (ii) measuring the blade tip stagger angle for one or more such blades, and (iii) measuring the blade tip axial displacement for one or more such blades. The methods use forward and rearward blade tip timing datasets for successive rotations of the blades from two axially spaced blade tip timing probes. The forward probe is forward of the rearward probe along the axial direction of the rotor. The blade tip timing datasets allow the times of arrival of the blades at the respective probes to be measured. The methods also use a once per revolution dataset for the successive rotations of the blades. The once per revolution dataset allows the angular velocity of the blades to be measured.

To view more details on these Patents, click here

SECTION 9 STOCK BUZZ

9.1 Acquisition

September 26: Rolls-Royce acquires Technology for the electrically-assisted Charging of MTU engines

FRIEDRICHSHAFEN - Rolls-Royce has acquired from G+L innotec the exclusive rights of use for a new technology for the electrically-assisted charging of off-highway combustion engines in the power range above 450 kW. The new invention from the development and engineering services provider based in Laupheim in southern Germany is protected by patents and has thus not been available on the market to date. Rolls-Royce plans to offer engines of its MTU brand with this technology as of 2021. "Electrically-assisted charging is a milestone on the way to the hybridising of the engine. Using this technology, it will be possible for us to develop agile, low-consumption engines," said Dr. Johannes Kech, Director of Development Turbocharging & Fluid Systems at MTU. MTU and G+L innotec will complete the next stages of development on the basis of a close partnership.

Source: Company Website

9.2 Corporate Wire

To view Recent Company Headlines, click here

September 29: Rolls-Royce: Total Voting Rights

In accordance with DTR 5.6.1 of the FCA's Disclosure Guidance and Transparency Rules (DTR), the Company is required to notify the market of its total number of voting rights and capital as at the end of each calendar month. The issued share capital of the Company is comprised of the following:- 1,840,585,963 ordinary shares of 20p each with voting rights.

September 21: ROLLS-ROYCE to supply 500 MTU engines for vehicles to be used by the polish armed forces

FRIEDRICHSHAFEN, GERMANY - Rolls-Royce is to supply a total of 500 MTU Series 106 engines to Polish vehicle manufacturer Jelcz. The type 6R 106 TD21 engines will be used to power four-wheel-drive Jelcz 442.32 all-terrain trucks for use by the Polish Armed Forces. The first of these engines are due to ship during 2017.

September 21: Rolls-Royce and Inmarsat sign ship energy management agreement

Rolls-Royce and Inmarsat have signed a Letter of Intent (LOI) to have the option to make the company's Energy Management system available via Inmarsat Maritime's Fleet Xpress high-speed broadband service.

With data collected from a multitude of ship control systems and equipment sensors, Energy Management 2.0 reduces energy consumption and supports environmental compliance as well as allowing for the benchmarking of efficiency against historical performance.

September 20: Rolls-Royce reaches services contract with US Air Force for C-130J Fleet

Rolls-Royce has reached agreement with the US Air Force to continue to provide support for the propulsion systems for its fleet of C-130J aircraft, through a five-year MissionCare(Registered) contract.

The performance-based logistics contract covers Rolls-Royce AE 2100D3 engines, plus propellers and nacelles on USAF C-130J aircraft operating around the world.

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

Rolls-Royce Holdings Plc

Source: www.BuySellSignals.com