RE: Forget Rolls-Royce shares. I’ve just bought this growth stock27 Nov 2020 12:43
"Rolls-Royce shares: would Warren Buffett buy?
The reason I don’t see much investment appeal in Rolls-Royce is that I view it as a ‘low-quality’ stock.
Just look at the company’s financials. In three out of the last five years, it has generated big losses. Analysts expect the group to generate another substantial loss this year.
Rolls-Royce also has a pile of debt on its balance sheet. In the group’s half-year results, it reported net debt of £1.7bn. The group has raised money to bolster its balance sheet recently. However, it’s still not financially strong.
Then there’s the dividend. This was cut substantially a few years back. Since then, the payout hasn’t been increased.
Putting all this together, Rolls-Royce is the kind of stock billionaire investor Warren Buffett would run a mile from. Sure, Rolls-Royce’s share price could keep rising in the short term. However, the lack of quality attributes suggest to me that RR is unlikely to be a good investment in the long run."