Rolls-Royce (OTCMKTS:RYCEY) is revving its engines and getting ready to take to the sky on Wednesday. Up more than 20%, RYCEY stock has had a volatile day. But what exactly has the over-the-counter shares of the defense and aerospace company flying so high? Dive in below.
To start, London-based Rolls-Royce has had a rough year. Shares are down almost 80% year to date thanks to a number of novel coronavirus catalysts. Because the company has a wide range of connections to commercial and regional airlines, the pandemic has not been kind to RYCEY stock. However, things could be changing today.
Rolls-Royce looks ready to take off, although shares are since down from an intraday high of $2.23. As you eye the upside move, here are 10 things to know:
- Rolls-Royce calls London its home, and the company primarily trades on the London Stock Exchange under the symbol RR.
- However, investors can access over-the-counter shares via RYCEY stock.
- The company has four different business divisions that focus on things like commercial jet engines, maintenance and repair services for regional airlines, and all sorts of specialized military engines and aircraft parts.
- Importantly, the company sold off branding rights to Rolls-Royce vehicles several decades ago.
- One of its more well-known products is the Trent 1000 engine.
- Investors should note that both Boeing (NYSE:BA) and Airbus (OTCMKTS:EADSY) use this engine in some of their aircraft.
- This means Rolls-Royce has faced cyclical pandemic struggles. With Boeing and Airbus receiving less demand for planes, Rolls-Royce has faced less demand for engines.
- Today has also brought a few company news items.
- Rolls-Royce announced today that it is acquiring Servowatch Systems, a maker of marine automation solutions for navies, yachts and commercial vessels.
- It also announced a new strategic partnership with Infosys (NYSE:INFY).
Why RYCEY Stock Is Climbing Today
So why exactly is RYCEY stock up more than 20% today? Although the acquisition of Servowatch Systems will give Rolls-Royce more access to the ship automation market, that news is likely not the whole story.
Instead, investors may see Rolls-Royce as an immediate beneficiary of a big coronavirus victory. Earlier this morning, the United Kingdom announced it had granted the vaccine from Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) emergency approval. This means that starting next week, vaccinations will roll out. Just as with the vaccine argument in the United States, this should mean the United Kingdom will be on its way to safely reopening and battling the pandemic.
Where does Rolls-Royce come in? Well, as the United Kingdom starts mass vaccination, the U.S. and the European Union should be close behind with emergency authorizations. This should help boost demand for business and recreational travel, boosting demand for aircraft and engines. If life returns to a pre-pandemic normal, RYCEY stock will benefit.
There is also one other catalyst at play today. On Monday, Virgin Galactic (NYSE:SPCE) won a NASA contract to provide regular access flights to the agency. Virgin Galactic too is hoping to see its business rebound, with rescheduled test flights beginning again next week. Rolls-Royce, a supplier of Virgin Galactic, is once again a beneficiary.
Keep the story here on your radar, and seek out other beneficiaries of emergency vaccine approvals.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.