If I'd invested ?10k in Rolls-Royce shares in an ISA six months ago …

Rolls-Royce (LSE: RR) shares have given investors a bumpy ride for years, crashing from 436p in January 2014 to just 98p at the start of 2023. That’s a staggering drop of 77.5%. The FTSE 100‘s aircraft engine maker’s troubles began in February 2014 when years of steady growth came to an abrupt end with a shock profit warning.

Four more warnings followed over the next 18 months.

One disaster after another

Rolls-Royce’s reputation was besmirched by revelations that executives had paid massive bribes to win export contracts, with the shady practice continuing right up to 2013. It was forced to hand over GBP671m to avoid prosecution by anti-corruption investigators in the UK, US and Brazil. Adding to its misery, its defence division was hit by government spending cuts, while its Trent 1000 engines, which go in Airbus 330 aircraft, suffered a string of technical problems.

Then Covid struck. The company generates most of its revenues from its aircraft engine maintenance contracts, which are based on miles flown. When airline fleets were grounded by pandemic restrictions, revenues plummeted.

I finally bought Rolls-Royce on 1 November last year, on the principle that things could only get better. And so they did, a lot faster than I expected. My holding is up 77.5%.

The stock closed yesterday at 145.42p. Somebody who bought Rolls-Royce exactly six months ago would be sitting on a 116% gain, turning GBP10,000 into a thumping GBP21,600. That’s purely from share price growth as there’s no dividend at the moment.

It would be all tax-free if they had invested inside their ISA allowance. Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only.

It is not intended to be, neither does it constitute, any form of tax advice. Readers are responsible for carrying out their own due diligence and for obtaining professional advice before making any investment decisions. Rolls-Royce shares have weathered recent FTSE 100 turbulence pretty well, rising 8.45% over the last month.

So would I buy more today?

More turbulence ahead

In January, new CEO Tufan Erginbilgic shocked investors and staff by labelling his charge a “burning platform”, adding that “this is our last chance”. JP Morgan had previously warned he might take this approach, but assumed it would damage the share price. Instead, Erginbilgic’s rough words gave it a boost.

Now we wait to see if he can match them with action. Today, analysts are a lot more bullish about Rolls-Royce shares. Citi recently lifted its price target to 255p, saying it could see “a clear route to much better cash flow”.

This included more than GBP1bn from non-systemic elements dropping out. S&P said the company’s debt might win back its investment grade rating over the next 12-18 months.  Much still depends on Erginbilgic’s turnaround plan.

A global recession is a concern, as this would probably hit flying hours and revenues. Another worry is that net company debt is still high, at £7.21bn, although that’s down from £10.49bn at the end of 2021. I’m not banking my gains.

Typically, I buy shares with a minimum 10-year view. I’m holding on for the happy day when the dividend resumes. After the recent surge, I won’t push my luck by increasing my stake today.

It’s flown high in a short space of time.

No, I’m hunting through the FTSE 100 for other ISA bargains.

And there are plenty around.

ee-home-broadband listed on couponmatrix.ukelvie listed on couponmatrix.ukgocompare listed on couponmatrix.ukink-factory listed on couponmatrix.ukmicrosoft-store listed on couponmatrix.ukspinnaker-tower listed on couponmatrix.uk
ee-home-broadband listed on couponmatrix.ukGet connected for less with EE Home Broadband. Discover flexible plans, unbeatable coverage and top notch customer service—it's all part of the EE package! Our EE Home Broadband deals make it easy to save on this award-winning network. Sign up to unlock loads of great perks, like free antivirus software, mobile upgrades and more!
elvie listed on couponmatrix.ukElvie takes women’s health seriously—but it’s far from boring. Applying cutting-edge technology to breastfeeding and pelvic floor exercises, Elvie’s smart products bring women’s health products into the 21st century. Whether you want to banish mishaps with the app-powered Elvie Trainer or make breastfeeding more convenient with the Elvie Pump, we’ll help you save on whatever you need with our Elvie discount codes at Groupon. Keep checking back for the best codes, Elvie Pump sales and offers available now.
gocompare listed on couponmatrix.ukCompare all of your insurance needs in one place with Go.Compare. It’s free to use and completely independent, making it super easy to find the right policy at the right price. Compare car and home insurance, energy tariffs, life insurance and more—and make the most of our Go.Compare offers to save even more on the products you’re searching! Go.Compare saves you time and money, giving you more to spend on the fun things.
ink-factory listed on couponmatrix.ukWelcome to Ink Factory, the destination for all your printing needs! We offer a wide range of Ink Factory discount codes for everything from business cards to flyers and more. Whether you're looking to save on your next big project or just need a few extra prints, we've got you covered. Simply browse our selection of Ink Factory discount codes and apply them at checkout to start saving today! Thanks for choosing Ink Factory. At Groupon, we work hard to find the best Ink Factory discount codes and deals so you can save big on your next purchase. We search high and low for the latest and greatest offers from Ink Factory, so you don't have to waste your time looking around. Using discount codes from Ink Factory is easy! Just browse our selection of codes and apply them at checkout. Once applied, your discount will be applied to your total purchase price. That's it! Thanks for choosing Groupon to save on your next Ink Factory purchase. Check out our selection of Ink Factory voucher codes and save big on your next purchase! One of the top-performing products is the Ink Factory Business Cards, using high quality paper and ink to create beautiful business cards perfect for any business or individual, that are sure to make a lasting impression. Plus, with our Ink Factory voucher codes, you can save even more on your purchase! Thanks for choosing Groupon!
microsoft-store listed on couponmatrix.ukMicrosoft is a software and hardware giant, famed for its Windows operating system and range of Xbox gaming consoles. It also produces mobile devices, such as the Windows Surface, a hybrid tablet and laptop device, and the Microsoft Lumia range of mobile phones. Look out for a Microsoft promo code to use on the Microsoft Surface Range, the Xbox One range, Microsoft Office and Microsoft Windows, allowing you to get the latest technology and software at the best possible prices.
spinnaker-tower listed on couponmatrix.ukEmirates Spinnaker Tower offers sky dining, panoramic views and a fun day out for the whole family - if you’re visiting Portsmouth then you’d better make time for this experience! With a Spinnaker Tower discount from you can reduce the price of your entry and get your wow factor without breaking the bank, so get online and book your tickets today. The Tower gives you sights like no other viewpoint in Britain!