I think the market crash has thrown up a FTSE 100 bargain!

first_img Image source: Getty Images. Jabran Khan | Friday, 17th April, 2020 | More on: RR See all posts by Jabran Khan Simply click below to discover how you can take advantage of this. “This Stock Could Be Like Buying Amazon in 1997” Everybody loves a bargain, I know I do. A bargain in the form of a blue chip stock is no different in my eyes. This is exactly what I feel Rolls-Royce (LSE:RR) represents right now due to the FTSE 100 market crash.The COVID-19 pandemic has seen the FTSE 100 lose approximately 25% of its value. Rolls-Royce itself saw near 60% wiped off its share price value. 5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…The announcement of full year results at the end of February saw RR’s share price trading at close to 620p per share. Fast forward to the first Friday in April and a low of 250p per share was RR’s position. This drop off is where I feel the opportunity lies. These shares look mighty cheap to me. RR is the world’s second-largest maker of aircraft engines. In 2018, RR was named in the top 20 defence contractors in the world.  Full year resultsAt the end of February, RR announced full year results with some interesting takeaways. The first piece of information that struck me was the 25% increase in underlying core profit, to £810m. A healthy improvement in net cash position to £1.4bn is always good to hear, in case operations cease and you need cash reserves. But how often does that happen, you say? It pleased me to read there was a reduction in debt level, of £1.1bn. Debt generally makes me uneasy. However, a company managing its debt does make me feel better. COVID-19Last week, CEO Warren East announced a trading update relating to the Covid-19 pandemic and its impact. It revealed that RR is joining the Ventilator Challenge UK consortium. There was also mention of salary cuts for executives during this time.RR announced its decision to draw down fully on a £2.5bn revolving credit facility (RCF). Along with an additional RCF of £1.5bn and existing cash, RR’s liquidity stands at an almighty £6.7bn. The final dividend payment of 7.1p per share has been scrapped, saving a further £137m. Its 2020 forecasted financial guidance has also been scrapped. Year to date, there has been a 25% reduction in flying hours for its engines as planes are grounded worldwide. This reduction was approximately 50% in March overall. Next stepsI anticipate orders for new engines will be affected over the coming months and perhaps even a year or two. Rolls-Royce’s saving grace is that it is only one of two major suppliers of jet engines for wide body aircraft. For that reason, I do not imagine that RR will encounter any fatal problems. It also helps that the company possesses lucrative and trusted relationships with Boeing and Airbus. It is worth noting that the lockdowns and aircraft groundings will not last forever. There has already been easing of restrictions in some European and Asian countries. The world will fly again!Rolls-Royce is critical to the world’s airline industry, in my opinion. Further short-term pain is expected. But do not be surprised to see these cheap shares soaring high in the months and years to come. I think the market crash has thrown up a FTSE 100 bargain! Jabran Khan has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares Enter Your Email Addresslast_img read more