RE: Rolls Has Been Here Before25 Sep 2020 01:18
WAM, I’ve been following the IAG board, and your 75p prediction has me nervous due to your record of correctly calling SPs on there. I’ve enough invested here and at a price that would make 75p very painful for me, so now considering selling
Before I do, I hope you or maybe even other regulars on this board could help me with a couple points
The reason I bought here is it’s not simply civil aerospace, its only 50% of revenue which is only 50% down and imoroiving. Why does the market see no value in the nuclear/defence/power systems business? They make some of the most complex equipment on earth. Most countries let alone companies could not replicate this. Such as their nuclear PWR, miniaturized reactors and US military engine tech.
Civil aerospace seems to now be priced in such a way to make it worthless. Does the market see no scope for demand improvement? The Trent engines issues have been largely resolved with fleets grounded, and there is innovation with Ultrafan technology. All this within an economic moat which involves only general electric as competition.
If the company cannot go bust as the UK government wouldn’t allow it, surely there must be a price before 75p in which somebody would step in, that would price it at a mcap of just over a billion.
Forgive me for these questions before I sell, as the market clearly believes me to be wrong. I presume the answer is to do with ongoing R&D costs and debt, but I struggle to see how all negatives can be priced in without any positives. And after all there is a Vaccine just round the corner.
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