There is always so much to write about on a Thursday, especially when two of my top twenty holdings are reporting. I have held DS Smith (SMDS) shares for a while now, referring to it as a ‘strange name but a great company’.
Early last month I observed a bunch of ‘medium-term efficiency shifts centred on ultimate zero emissions’, but also ‘demand for tech-led solutions’ and ‘net zero pathway announced’ by 2050 which are all excitable news over the next few years for Rolls-Royce (RR.). That’s why I was excited back then for a 140p plus share price against the then 108p level...and this morning we are there.That is not too shabby for a stock that is now up 170% since its money-raising a year ago.
Back in March I asked the question ‘do you feel lucky...Rolls-Royce (RR.)?’ as ‘for a lack of profits/cash flow even this year, this one remains a long term stick the shares in the bottom of your drawer play’. I admitted then that I remained a holder on the basis of its airline engine, defence and even ‘being a player for low-carbon civil aerospace solutions’ over the next decade or two. But, reflected by the massive share price fall since early 2020, it has a lot of debt and correlation with the COVID-19 impacted world. So whilst Rolls-Royce shares are a few pence down from their previous level and March (and only a few pence up year-to-date), there is a little bit of positive progress in today’s first half numbers.
Let’s face it 2020 was not an easy year for Rolls-Royce (RR.), meaning a big fall in its share price and it hitting the markets for £4 billion of funds (split between an equity and a bond rating). Back in August HERE, I admitted my late 2019 call was wrong (‘But if you are a long-suffering Rolls-Royce shareholder, the key conclusion is that activists - along with the rest of us - can and do get it wrong’), but what do I think now?
