Rolls-Royce Holdings (LSE: RR) shares are among the most popular and heavily traded in London. Indeed, they always feature in each week’s top-five buys and sells by UK private investors.
However, Rolls-Royce stock has ridden an incredibly rough roller coaster in recent years. When the Covid-19 outbreak went global in early 2020, air travel ground to a halt worldwide. This caused the famed engineering firm’s shares to slump like a soggy soufflé.
Rolls-Royce shares’ rough ride
Rolls-Royce has built a world-class reputation as a global supplier of aircraft engines, power systems, and defence equipment. However, its storied history was no help during the pandemic panic of 2020/21.
Should you invest £1,000 in Rolls-Royce right now?
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To survive in this nasty new world, this FTSE 100 firm had to slash costs, lay off staff, and raise billions in extra borrowings. Unsurprisingly, its share price collapsed.
In October 2020, some investors feared that this 118-year-old business was close to collapse. Happily, effective Covid-19 vaccines arrived in November 2020, sending Rolls-Royce stock soaring skywards.
On Friday, Rolls-Royce shares closed at 151.15p, valuing the Footsie firm at almost £12.7bn. Here’s how they have performed over eight different timescales:
| One week | -0.6% |
| One month | +5.2% |
| Three months | +39.0% |
| Six months | +77.6% |
| One year | +84.9% |
| Two years | +48.5% |
| Three years | +46.8% |
| Five years | -46.9% |
Now for some good news
Over the past 12 months, the Rolls-Royce share price has swung between a low of 64.44p on 28 September 2022 to a high of 160p on 9 March.
However, my table shows that this stock has produced strongly positive returns over six periods, ranging from one month to three years. Indeed, the 85% surge in its share price over one year makes Rolls-Royce the best-performing share in the FTSE 100 in that period. Nice.
Alas, over five years, this stock has almost halved, losing almost 47% of its value. Damn that lousy pandemic!
Buying £1,000 of Rolls-Royce stock
To answer my title’s question: how much would I have today had I invested a round £1,000 into Rolls-Royce stock one year ago and another two years before that? My second table reveals the results:
| Stake | Return | Capital gain | Total | |
| One year | £1,000 | 84.9% | £849 | £1,849 |
| Three years | £1,000 | 46.8% | £468 | £1,468 |
Note that all of the returns in this article exclude dividends — which Rolls-Royce hasn’t paid since the 4.6p a share in cash on 3 January 2020.
There you have it. Had I invested a grand in this stock one year ago, I’d be £381 (+38.1%) better off than if I’d done the same two years earlier. So congratulations to those bold and brave investors who piled into Rolls-Royce stock in spring and summer 2022. Enjoy your well-earned gains.
Finally, I don’t own any Rolls-Royce stock at the moment, but I’m considering adding this share to my watchlist of shares to buy. I have plenty of dividend shares in my family portfolio, but not many recovery and growth stocks like RR.
Hence, I intend to take another look at this FTSE 100 share later in 2023, when I have more spare cash. Watch this space…
