ValueAct Sees Value In Rolls-Royce Despite Mismanagement

Rolls-Royce is in the midst of an investment period, and near-term financial performance will continue to deteriorate as the company transitions to a formidable base of recurring revenue from long-term maintenance contracts. That’s according to ValueAct Capital’s second quarter letter to investors, as reviewed by ValueWalk. Jeff Ubben’s ValueAct Capital took a 5.5% stake in Rolls-Royce during the second quarter of this year. The fund went on to double its stake during November after the troubled aerospace engineer issued its fifth profit warning in 20 months. ValueAct’s 10% stake means the fund is now Rolls-Royce’s largest shareholder, and it’s believed that ValueAct has demanded a…