Stockchase Opinions

Craig Millar Rolls-Royce Holdings PLC RYCEY - OTC BUY Jun 03, 2014

Majority of their business is aircraft engine manufacturing, so it benefits from the aerospace cycle. In aerospace, there are 25,000 long-range aircraft globally today. One 3rd needs to be replaced because of fuel inefficiencies, airport noise restrictions, etc. Also there are recovering economies in the US and Europe that will benefit them. Emerging markets have growth in the middle class too. This company would be a direct beneficiary of all those reasons.

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BUY
Primarily driven by defense contracting, not by the car. It will be a beneficiary of 5 Eyes defense spending. Likes the company. Inexpensive at these levels. He'd consider it for the longer term.
DON'T BUY
Now an aerospace and defense company, BMW owns the actual car brand. A restructuring play on jet engines. Defense and power divisions are stable. Revenue will grow once airlines start buying more aggressively. Not expensive, but choose another industrial.