Markets.com Logo
euEnglish
LoginSign Up

Melrose Share Price Forecast: What The Future Holds

Dec 28, 2023
6 min read
Table of Contents
  • 1. What Does Melrose Industries Do?
  • 2. Is Melrose Industries Publicly Traded?
  • 3. Who are the Shareholders of Melrose Industries?
  • 4. Melrose Share Price Over the Year
  • 5. Insights for Shareholders and Investors Ahead
  • 6. In Summary

A bright light at the center surrounded by green trading charts and ascending arrows

 

Melrose Industries PLC is a UK-based investment company specializing in acquiring underperforming manufacturing businesses, improving their operations and financial performance, and selling them for a profit. 

In this article, we’ll look at the company’s business model, the current Melrose share price, the stock’s performance so far in 2023, and what investors should know about the company’s plans, risks, and growth potential in the future.

 

What Does Melrose Industries Do?

Melrose focuses on company acquisition, improving them, and selling them off later for a higher valuation. The company has expertise across various industrial sectors like automotive, construction, aerospace, and general manufacturing. Melrose invests in operational improvements, new equipment, increased efficiency, and enhanced competitiveness to boost the profitability of its acquired subsidiaries.

Melrose’s current main businesses after acquiring GKN PLC - a global engineering and manufacturing company, are as follows:

GKN automotive - Manufactures driveline technologies for the automotive and motor vehicle industry, including all-wheel drive systems and electric powertrains.

GKN powder metallurgy: Produces powdered metal components used across the automotive and industrial sectors.

Acquiring industrial businesses offering turnaround potential, Melrose aims to increase their financial value before selling them at a profit. This model then provides strong returns for Melrose shareholders through share price growth and dividends funded by the sale proceeds.

 

 

Is Melrose Industries Publicly Traded?

Melrose Industries PLC trades on the London Stock Exchange (LSE) under the MRO ticker.

The company has been publicly listed since 2003 when Melrose held its IPO (Initial Public Offering) on the LSE to raise funds for future acquisitions. The IPO offered shares to institutional and retail investors. As a publicly listed firm, Melrose must publish regular financial statements, disclose major company news and acquisitions to shareholders, and hold Annual General Meetings open to all shareholders.

 

Who are the Shareholders of Melrose Industries?

 

A gathering of business professionals conducting a meeting in an open space

 

According to the latest substantial shareholder filings, several major investment funds hold significant stakes in Melrose Industries as of 2023, led by:

Capital Research & Management Co. (World Investors): Currently the largest shareholder in Melrose with an 8.93% ownership stake equaling over 119 million shares. As one of the world’s largest investment managers running American Funds, Capital Group is a widely followed institutional investor.

Capital International Ltd.: A subsidiary investment manager of Capital Group also holds 8.68% of Melrose stock, representing over 116 million shares currently. 

Norges Bank Investment Management: The investment unit of Norway’s central bank monitors Melrose as one of the largest European equity investors. Norges holds 4.47% or nearly 60 million shares.

The Vanguard Group: A leading passive fund manager, Vanguard has accumulated a stake of just over 3.4%, highlighting Melrose as a stock commonly featured in UK benchmark tracker funds.

In addition to these four largest investors, fund managers like BlackRock, T. Rowe Price, and Permian Investment Partners maintain mid-tier ownership stakes between 1.9% and 2.8% each. Permian is an active UK investment firm founded by former executives from dealers Cazenove and JPMorgan.

With multiple respected fund managers among the most prominent investors, nearly 30% of Melrose stock is held by large institutional shareholders focused on shareholder returns through dividends and valuation growth.

 

Melrose Share Price Over the Year

 

A person touching a tablet with a panoramic digital screen in the background revealing a live trading chart

 

The company share price has generally been on an upward trajectory over the past year, with some fluctuations. Specifically, the Melrose share price rose steadily from 298.98p in December 2022 to 370.11p in March 2023. This represents a 23.7% price increase over the first three months.

In April 2023, there was a stock split, after which the Melrose share price opened at 409.00p. From there, the Melrose share price peaked at 568.00p in December 2023. This represents a steep 38.9% rise from the post-split price over the next eight months.

However, there were some pullbacks along the way. After hitting a high of 506.20p in June 2023, the Melrose share price dipped to 469.20p in September 2023. This 14.3% drop has marked a temporary correction before resuming its upward climb.

Overall, an investor who purchased Melrose shares a year ago and held until now would look at total returns of over 90% even when accounting for the fluctuations. The company has strong price momentum, likely driven by positive business performance and investor sentiment. However, some periods of volatility and pullbacks are to be expected.

You might also like to read: How to sell shares online - A Tutorial for beginners

 

Insights for Shareholders and Investors Ahead

These factors and risks must be considered when evaluating the Melrose share price shortly. 

  • The company plans to optimize its GKN subsidiaries over the following years and the potential value that could be realized from eventual disposals. Successfully spinning off GKN business units later at higher valuations is critical to Melrose’s model.
  • However, weakened demand forecasts in the automotive market due to the global economic uncertainty could weigh on GKN Automotive’s revenues. If macroeconomic conditions decline, melrose may have to contend with a bumpier road than initially expected when acquiring GKN in 2018.
  • Rising inflation and interest rates also threaten operating margins, though Melrose’s exposure to fastener and powder metallurgy businesses could prove more resilient than other industrial names.
  • Geopolitical risks from the tragic Russia-Ukraine conflict continue to fuel uncertainty in European markets in the near term.

So shareholders should closely monitor management’s guidance on achieving strong operational margins from Melrose’s reinvigorated subsidiaries amidst this challenging backdrop.

 

In Summary

Melrose Industries has had a strong run over the past year. The company’s business model of acquiring undervalued manufacturing businesses, improving their operations, and selling them at a profit has recently generated impressive shareholder returns.

However, investors should be aware that economic headwinds persist, including risks from inflation, rising interest rates, and geopolitical tensions. These could challenge maintaining solid margins and growth at Melrose’s subsidiaries. While management aims to optimize its acquired businesses, traders should continue evaluating the latest financial results, market conditions, and management guidance when considering the current Melrose share price and potential investment upside or risks.

Don’t rely solely on positive momentum over the past year. Evaluate Melrose’s fundamentals and strategy to market benchmarks to make more informed decisions. 

Ready to trade with Markets.com? Creating an account is easy!

“When considering “CFD” for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss. Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.”


Risk Warning: this article represents only the author’s views and is for reference only. It does not constitute investment advice or financial guidance, nor does it represent the stance of the Markets.com platform.When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice. Trading cryptocurrency CFDs and spread bets is restricted for all UK retail clients. 

Arianne Bonacua
Written by
Arianne Bonacua
SHARE

Markets

  • Palladium - Cash

    chartpng

    --

    -1.17%
  • EUR/USD

    chartpng

    --

    -0.12%
  • Cotton

    chartpng

    --

    -0.74%
  • AUD/USD

    chartpng

    --

    -0.49%
  • Santander

    chartpng

    --

    0.16%
  • Apple.svg

    Apple

    chartpng

    --

    -0.02%
  • easyJet

    chartpng

    --

    -0.54%
  • VIXX

    chartpng

    --

    -0.28%
  • Silver

    chartpng

    --

    -2.40%
Tags DirectoryView all
Table of Contents
  • 1. What Does Melrose Industries Do?
  • 2. Is Melrose Industries Publicly Traded?
  • 3. Who are the Shareholders of Melrose Industries?
  • 4. Melrose Share Price Over the Year
  • 5. Insights for Shareholders and Investors Ahead
  • 6. In Summary

Related Articles

LKQ Stock Hits 52-week Low: What’s Happening with LKQ Corp?

LKQ Corporation (NASDAQ: LKQ) has recently hit a 52-week low, raising concerns among investors and market analysts.

Ghko B|2 days ago

Intel Stock (INTC) Slides 7%: How to Trade Intel Stock CFDs?

Intel Stock (INTC) Slides 7%: Intel Corporation (INTC) has long been a cornerstone of the technology sector, known for its innovations in semiconductor manufacturing.

Ghko B|2 days ago

Deckers Stock Surges Today: How to Trade DECK Stock CFDs?

Deckers Stock Surges Today: Deckers Outdoor Corporation (DECK) has recently experienced a significant surge in its stock price, drawing attention from investors and traders alike.

Ghko B|2 days ago
Markets.com Logo
google playapp storeweb tradertradingView

Contact Us

support@markets.com+12845680155

Markets

  • Forex
  • Shares
  • Commodities
  • Indices
  • Crypto
  • ETFs
  • Bonds

Trading

  • Trading Tools
  • Platform
  • Web Platform
  • App
  • TradingView
  • MT4
  • MT5
  • CFD Trading
  • CFD Asset List
  • Trading Info
  • Trading Conditions
  • Trading Hours
  • Trading Calculators
  • Economic Calendar

Learn

  • News
  • Trading Basics
  • Glossary
  • Webinars
  • Traders' Clinic
  • Education Centre

About

  • Why markets.com
  • Global Offering
  • Our Group
  • Careers
  • FAQs
  • Legal Pack
  • Safety Online
  • Complaints
  • Contact Support
  • Help Centre
  • Sitemap
  • Cookie Disclosure
  • Awards and Media

Promo

  • Gold Festival
  • Crypto Trading
  • marketsClub
  • Welcome Bonus
  • Loyal Bonus
  • Referral Bonus

Partnership

  • Affiliation
  • IB

Follow us on

  • Facebook
  • Instagram
  • Twitter
  • Youtube
  • Linkedin
  • Threads
  • Tiktok

Listed on

  • 2023 Best Trading Platform Middle East - International Business Magazine
  • 2023 Best Trading Conditions Broker - Forexing.com
  • 2023 Most Trusted Forex Broker - Forexing.com
  • 2023 Most Transparent Broker - AllForexBonus.com
  • 2024 Best Broker for Beginners, United Kingdom - Global Brands Magazine
  • 2024 Best MT4 & MT5 Trading Platform Europe - Brands Review Magazine
  • 2024 Top Research and Education Resources Asia - Global Business and Finance Magazine
  • 2024 Leading CFD Broker Africa - Brands Review Magazine
  • 2024 Best Broker For Beginners LATAM - Global Business and Finance Magazine
  • 2024 Best Mobile Trading App MENA - Brands Review Magazine
  • 2024 Best Outstanding Value Brokerage MENA - Global Business and Finance Magazine
  • 2024 Best Broker for Customer Service MENA - Global Business and Finance Magazine
LegalLegal PackCookie DisclosureSafety Online

Payment
Methods

mastercardvisanetellerskrillwire transferzotapay
The markets.com/za/ site is operated by Markets South Africa (Pty) Ltd which is a regulated by the FSCA under license no. 46860 and licensed to operate as an Over The Counter Derivatives Provider (ODP) in terms of the Financial Markets Act no.19 of 2012. Markets South Africa (Pty) Ltd is located at BOUNDARY PLACE 18 RIVONIA ROAD, ILLOVO SANDTON, JOHANNESBURG, GAUTENG, 2196, South Africa. 

High Risk Investment Warning: Trading Foreign Exchange (Forex) and Contracts For Difference (CFDs) is highly speculative, carries a high level of risk and is not appropriate for every investor. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Please read the full  Risk Disclosure Statement which gives you a more detailed explanation of the risks involved.

For privacy and data protection related complaints please contact us at privacy@markets.com. Please read our PRIVACY POLICY STATEMENT for more information on handling of personal data.

Markets.com operates through the following subsidiaries:

Safecap Investments Limited, which is regulated by the Cyprus Securities and Exchange Commission (“CySEC”) under license no. 092/08. Safecap is incorporated in the Republic of Cyprus under company number ΗΕ186196.

Markets International Limited is registered  in the Saint Vincent and The Grenadines (“SVG”) under the revised Laws of Saint Vincent and The Grenadines 2009, with registration number  27030 BC 2023.

Close
Close

set cookie

set cookie

We use cookies to do things like offer live chat support and show you content we think you’ll be interested in. If you’re happy with the use of cookies by markets.com, click accept.