For many, the most popular crypto currency is the only thing growing. But far from the deflation it is causing and the bubble surrounding it, Bitcoin is only popular because people make noise about it (they have to, is the only way a Ponzi scheme works).
Most of the people are forgetting one big essential company we have all heard of. Either the cars or the jet engines, we all know Rolls Royce.
The company Rolls Royce nowadays is only owner of the plane engines, as they sold their car brand some years ago to BMW Group. And as we all know, during 2020 the airplane industry will fall to record lows because of lock downs and restrictions.
The business model Rolls Royce have is something similar to a leasing, the companies (Airbus, Boeing, Embraer,...) don't directly buy the engines, but they mount them as requested from the customer that will be the one paying for each hour of use. There are three main players in this business: Rolls Royce, General Electric and Pratt and Whitney (last week engine failure on a 777 United Airlines plane was from this last manufacturer). The three players basically do the same business, with the same way of charging each customer… but Rolls Royce has been developing technology like no other during the past years.
Rolls Royce has focused on the environmental problem caused by the planes (that by the way is not registered, as the emissions are normally done between countries or over international waters) developing electric engines, biofuel engines and hydrogen engines. Most recently they have started working on hypersonic engines with companies such as Boom and Virgin Galactic, meaning that their technology is going to make Rolls Royce the most technological company in the UK (quite impressive for a company 100 years old).
When we focus on their stock we realize that their price is very close to the bottom, meaning that they are not even following the news of the reopening of the tourism, as other Airlines stocks are doing, meaning this is without a doubt the best possible stock in the market right now.
On one side, the reopening of tourism worldwide, meaning more hours of planes flying and therefore more money incoming. On the other, the development of the technology that will start paying from the moment more countries invest in “green planes”, a concept coming as sure as the day follows the night.
Opposite to other stocks, this is not a day trading stock but a years long investment. In the short term we can for sure see something between 2£ and 4£, but in the long term (one decade from now) we will for sure see 18£-20£, meaning a 2.000% with very very low risk.
Of course, some downside is always there. Rolls Royce is present in almost every A380 and 747 (two planes going into retirement), mean that the business will have to focus in the 777 and A350 for the long range planes, while fighting to win more market quote between the A320 and 737 for the short distance routes (a market crowded with GE motors).
We have started to see a positive trend two weeks ago with some good support over 1£ meaning it could be a wise idea to put in money to take advantage of the good numbers coming during the Q3 and Q4 this year.
While the Bitcoin may, according to the wildest predictions, hit 500k (meaning a 30 trillion asset without any ruling, backing or meaning…) giving a 1.000% return; Rolls Royce will very probably give 1.500% return being an understandable company and probably with a yearly dividend that make the stock even more attractive.
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