RR/ LN
Rolls-Royce Holdings PLC
Industrial/Transportation
12/16/2013
Presented
| Date | 12/12/2013 |
| Price | £11.90 |
| Market Cap | $33.30B |
| Ent Value | $33.09B |
| P/E Ratio | 26216.22x |
| Book Value | £3.39 |
| Div Yield | N/A |
| Shares O/S | 1,880.28M |
| Ave Daily Vol | 3,760,000 |
| Short Int | N/A |
Current
| Price | £5.41 |
| Market Cap | $70.64B |
| Rolls-Royce Holdings plc, together with its subsidiaries, provides integrated power solutions for customers in civil and defence aerospace, marine, and energy markets worldwide. It operates in five segments, Civil Aerospace, Defence Aerospace, Marine, Energy, and Engine Holding. The Civil Aerospace segment develops, manufactures, markets, and sells commercial aero engines, including large aircraft, small aircraft, and helicopter engines for various sectors of the airliner and corporate jet market; and provides aftermarket services consisting of a suite of managing and maintaining services for its engines. The Defence Aerospace segment engages in the development, manufacture, marketing, and sale of military aero engines for combat jets, helicopters, transporters, trainers, tactical aircraft, unmanned aerial vehicles, and distributed generation systems, as well as offers aftermarket services. The Marine segment is involved in the development, manufacture, marketing, and sale of marine-power propulsion systems and aftermarket services. Its produces include automation and control, bearings and seals, deck machinery solutions, electrical power systems, engines, propulsors, reduction gears, ship design and systems, syncrolift shiplifts and transfer systems, and stabilisation and manoeuvring systems. This segment also integrates technologically complex systems for offshore oil and gas, merchant and naval surface, and submarine vessels. The Energy segment manufactures and sells power systems for the offshore oil and gas industry and electrical power generation, and aftermarket services. Its products include gas engines, gas turbine engines, gas compression, diesel engines, fuel cells, and automation and control systems. The Engine Holding segment offers diesel engines and aftermarket services. Rolls-Royce Holdings plc was founded in 1971 and is headquartered in London, the United Kingdom. |
Highlights
The presenter regards shares of Rolls Royce as a relatively crowded long, with the bull case maintaining that the company could grow its top line at about 8% annually through the end of the decade. The common perception tends to be that the company is well-situated by way of its exposure to favorable trends in the aerospace sector, but with more than 50% of EBIT originating in relatively low margin or low growth businesses, the presenter believes the stock is undeserving of the multiple awarded to it. Perhaps most importantly, he believes the market has a flawed understanding of the company’s high-margin aerospace segment, which he sees as meaningfully leveraged to a business that is being retired.
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