Image Source: Rolls-Royce PLC
During the week that ended on April 4, of all the actions of the United Kingdom, Rolls-Royce (LSE: RR.) The actions were the popular publication among the users of the Hargreaves Lansdown trade platform. Of the number of orders that were made to buy shares, 2.38% were for the British engineering-cum-technology group. The value of these operations was 3% of all the funds invested.
It is not known when these offers were placed. But I suspect that most of them were at the end of the week, when the shares suffered great losses, since investors fought to accept the implications of President Trump's tariffs.
I think many saw the decline in the price of shares as an opportunity to buy an action that continued to work strongly from the pandemic.
Rolls-Royce shares closed 659p. They were the last at this level in February. And despite recovering a little, while writing on April 9, the changing hands of the shares for 659.2p, remain comfortably below their maximum of 52 weeks reached on March 19.
On the other hand…
But it falls a little deeper and a slightly different story arises.
Among Hargreaves Lansdown customers, it was also the best selling stock, representing 3.17% of all sales orders and 4.8% of the total value of these transactions.
It could be that some shareholders have decided to retire after obtaining some substantial profits.
Alternatively, it could be that the action is the favorite of those who have actions only for a few weeks (or days) in the hope of obtaining a rapid gain. But this is not investing, it is speculating.
As Warren Buffett said in his 1989 letter to Berkshire HathawayShareholders: “Our favorite period of possession is forever. ” And 'his' company has not done too much to follow this approach, now it is worth more than $ 1trn!
In my opinion, those prepared to retain Rolls-Royce actions for several years could also be generously rewarded.
Growth prospects
In 2024, the group obtained an underlying operational gain of £ 2.5 billion. By 2028, he expects this to grow at £ 3.6 billion- £ 3.9bn. Using the midpoint of this range, it implies an increase of 50%.
If achieved, earnings per action (EPS) will be about 33p. At the moment, the shares quote approximately 33 times its EPS 2024. If this valuation of valuation was maintained over the next three years or so, the price of the action could theoretically reach £ 11 by 2028.
And this could happen if the group grows as expected. This is because most investors are looking for the future prospects of a company instead of what is achieved in the past.
But it is important not to get carried away.
Especially since President Trump may have thrown a key in process. If there is a global recession, it is unlikely that the earning figures mentioned above are precise. And the air trip is particularly sensitive to a global deceleration. Less flights mean lower motor flight hours and less income for Rolls-Royce.
However, investors seeking to acquire shares in a quality company with an excellent reputation, with 18% less than the one they traded three weeks ago, could consider buying the shares.
(Tagstotranslate) category. Growth-Shares