Stock Market

Now over 540p, has the price of a Rolls-Royce become absurd?

Image source: Rolls-Royce plc

There was once a share price called Rolls-Royce (LSE:RR.),
His performance made the shareholders happy.
It never stopped rising,
To the surprise of others,
But now it is the top choice of many investors.

Despite a forward price-to-earnings (P/E) ratio of 29.
And twice as much as fine wine.
People are still buying,
And continue to defy,
Critics say it will go down.

It took a while – and after a long time of thinking –
I regret not adding the stock to my collection.
So a few weeks ago,
I use some of my dough,
It became the victim of my love.

As the proud owner of my shiny new shares,
I am happy with the current situation.
Because I gained a few pounds.
And I love the way that sounds.
But it's not enough to be one of those Rolls-Royce millionaires.

The group is organized in all three categories,
What is seen by its board of directors
It will continue to expand,
Generating more cash on hand,
Because of some rational decisions.

But wise old investors look long-term,
When you check you have to confirm
To take a stake,
Or a piece of cake,
In a 140 year old company.

It might take a while, I know
Before some of the benefits become apparent,
Small modular reactors,
That would be one of the factors,
In helping the stock price to grow.

As with any investment there may be problems
That makes me want to reach for the tissues.
A recession can bite
And customers can get scared,
It gives the share price blues.

Or if one of the company's engines is available
Creating a unique and relevant sound.
Love Cathay Pacific,
What you thought was bad,
When one of its planes has to turn.

Others like to buy stocks for dividends
And the return in 2024 should be fixed.
But with a yield of 1%,
To be used immediately,
So income investors are less likely to tell their friends.

But in my opinion Rolls-Royce is a quality engineer,
That produces year after year
Many wise things,
Especially winged machines,
That continues to be pioneering.

Analysts expect earnings per share of 25.6p over three years.
And if they are right you will feel a lot of joy
Because 86% increases,
You deserve an award
As it is much better than any of its peers.

Are these 'experts' right and this prediction is affected,
Most of the benefits are slow.
Stocks then look cheap,
And it can start jumping fast,
I'll be sneaking in my profit, I admit!

As my time comes to an end,
I have to finish my prose.
But I hope I did well
And in the future I won't have to write
That Rolls-Royce was one of the worst stocks I've ever picked.

(With apologies to the late Edward Lear and limerick writers everywhere)


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