What “Last Great Value Stock” Is Karim Rahemtulla Pitching?

A stock teaser presentation from Karim Rahemtulla has been doing the rounds lately, and it’s all about a “$2 stock” he’s referring to as “The Last Great Value Stock.”

According to Rahemtulla, this company is “like Tesla on steroids,” and he thinks it “has a real chance to go to $50 in the years ahead.”

What company is he teasing?

That’s what I wanted to know. So I dug through the clues he shared in the presentation, and in this post, I’ll show you exactly what company he’s talking about.

I’ll also walk you through what Rahemtulla is predicting, show you why he’s bullish on the company, and give you an overview of the service he’s pitching, Trade of the Day Plus.

What Is the “Last Great Value Stock?”

Karim Rahemtulla began the “Last Great Value Stock” presentation by stating that the stock market has been “more expensive than before the dot-com collapse” and pointed out how many tech stocks have now come “plummeting back to earth.”

According to Rahemtulla, this has left many investors wondering where the “big gains” will come from next. And he claims to have the answer to this question.

“The question many investors are wondering is pretty simple…

With overvalued stocks collapsing, what stock can I actually buy that still has a chance to go up?

Where are the BIG gains going to come from next?

Well, today I have an answer.

A $2 stock I’m calling The Last Great Value Stock.”

So, what’s he predicting?

In short, Rahemtulla talked about how, in 2020, when the pandemic began, we hit an “inflection point” where money started flowing into “virtual stocks.”

In other words, tech stocks like Netflix, Zoom, and Peloton.

But now, he believes we’ve hit a new inflection point where money is flowing out of virtual stocks and “back into the stocks that operate in the physical world.”

“In short, money is flowing out of those virtual-based pandemic stocks… and back into the stocks that operate in the physical world.”

And according to Rahemtulla, there is “one key to finding the best stocks,” a “reversal” where the company goes from a loss to positive income within a short time.

Which he says is what’s happening with the “$2 stock” he’s teasing.

“And that’s happening now with the $2 stock I’m telling you about.

Income, including equity sales, just swung from a $4.3 billion loss back to $3.5 billion in the black.”

What “$2 stock” is Karim Rahemtulla teasing?

Rahemtulla didn’t share the name of the company in the presentation, but he did share a lot of detailed clues about it, so identifying it wasn’t difficult.

For instance, he said it’s an “engineering powerhouse” that “builds, supplies, and services world-class engines and power systems” that make the global economy run.

He also said it’s “as recognizable as Disney or Tesla.”

And the following clue shows that its market cap must be less than $15 billion:

“Right now, this company has a sales backlog of nearly $75 BILLION.

That’s more than five times the company’s current value.”

Those clues, along with a few other tidbits he shared, would almost have been enough to figure this one out. But then Rahemtulla shared an entire list of specific clues about the company that made it relatively easy to figure out.

Here’s an example of a few of the main ones:

“The company is working on a nearly $5 billion-per-year project to build nuclear reactors for the United Kingdom.

It makes jet engines for the Airbus A330, 340, 350 and 380… plus the Boeing 777 and 787 Dreamliner.

It has a $2.6 billion deal to supply 650 F130 jet engines to the United States Air Force.”

What could it be?

Based on Rahemtulla’s clues, I believe the company he’s teasing is Rolls-Royce Holdings PLC, a British multinational aerospace and defense company.

How exactly does this company match?

Well, for starters, it matches the above three clues I just shared:

• Rolls-Royce is working on a multibillion-pound plan to develop small nuclear reactors in the UK, and it’s financed by both private investors and the UK government.
• It makes jet engines for the Airbus and Boeing models Rahemtulla mentioned.
• Rolls-Royce North America was awarded a contract worth up to $2.6 billion to supply F130 engines to the US Air Force.

The company also matches other clues Rahemtulla shared in the presentation, such as the clues about the stock price, market cap, and projects it’s working on.

That said, not every clue he shared matched perfectly.

For example, regarding the clue about the company going from a multi-billion-dollar loss in 2020 to “$3.5 billion in the black,” it’s unclear how he worked this out.

My research suggests the company did go from a loss in 2020 to a profit in 2021, but I wasn’t able to verify the amount he cited.

What about Rahemtulla’s “sales backlog of nearly $75 BILLION” clue?

The April 2022 Rolls-Royce investor presentation shows the company’s order backlog, after converting pounds to USD, is (roughly) in the ballpark of what he mentioned.

Long story short, I can’t be 100% certain it’s Rolls-Royce, but this company matches Rahemtulla’s clues such that it’s highly unlikely it’d be any other company.

So I believe this is “The Last Great Value Stock” he’s teasing.

Why is Rahemtulla bullish?

Karim Rahemtulla discussed numerous reasons why he’s bullish on the “Last Great Value Stock.” But when you boil it all down, his prediction mostly relates to earnings and how the company could grow its earnings through different projects it’s working on.

“What’s really exciting about this company is that while it is bringing in billions through its engineering and manufacturing businesses…

It is also developing futuristic technologies that give it massive growth potential.

The company is a leader in new machine learning and artificial intelligence technologies that make the entire global economy run more efficiently.

This company is like Tesla on steroids!

And it’s even used its new technologies to create a Netflix-like subscription model that will bring in recurring revenue month after month.”

In particular, he mentioned several things that the company is working on, which have led him to believe it’s a potentially worthwhile investment.

Here’s an overview of each…

“Netflix-like subscription model”

According to Karim Rahemtulla, the company he’s bullish on (which I think is Rolls-Royce) has “turned aircraft maintenance into a subscription service” that generates monthly revenue.

And he suggests that this is thanks to a new product the company created with Microsoft that uses machine learning and artificial intelligence.

“What it realized was… if it were to service the engines in addition to manufacturing them, it could end up becoming a huge profit center. Like a service department at a car dealer.

The money would just keep coming in.

So it worked with Microsoft to create a new product that would allow it to use machine learning and artificial intelligence to perfect maintenance and engine efficiency.”

[…]

“By using this new technology, the company has turned aircraft maintenance into a subscription service that pays monthly revenue.”

During the presentation, Rahemtulla shared a bunch of “back of the napkin” workings that led him to conclude that this could result in billions of dollars in recurring revenue for the company based on servicing other companies’ aircraft engines.

What “product” did the company create? From what I can gather, Rahemtulla is talking about a collaboration between Microsoft and Rolls-Royce that involved putting IoT into aircraft engines to enhance efficiency and reduce maintenance costs.

And as for the “subscription service” side of things, it seems he’s referring to the company’s “Power by the hour” service, where its aerospace customers are charged a fixed dollar amount per flying hour for engine maintenance.

Personally, I think this is a very cool concept.

And not just from a profit perspective. But because, from what I understand, Rolls-Royce gets paid for the time the planes it works on are in the air. So the company is incentivized to do its best work, which creates a kind of “win-win” situation.

“Mini-nuclear power plants”

The next main thing Rahemtulla pointed out in the presentation about why he’s bullish relates to how the company’s building miniature nuclear power plants in the UK.

“Enter our company’s brand-new technology… the mini-nuclear power plant.

They’re one-tenth the size of a traditional reactor.

But they can power 1 million homes.”

[…]

“The company has signed a deal with the United Kingdom through 2050.

It is set to build these mini-nuclear power plants all over England.

The deal is expected to generate around $5 billion per year and create 40,000 jobs.”

As mentioned earlier, Rolls-Royce is working on a project to roll out “mini-nuclear power plants” in the United Kingdom. And according to the Guardian article I linked to earlier, the project is funded by private investors and the UK government.

What’s the big deal?

For one thing, it’s a step in the right direction for energy independence and lower carbon emissions. And it could also potentially create 10,000s of jobs and billions in economic benefit over the coming decades.

And as far as Rahemtulla’s clue about the project powering a million homes… the initial reactors are expected to have 470MW of generation capacity, which is enough to power over a million homes in the UK.

“Electric planes and EVTOLs”

Last but not least, Karim Rahemtulla talked about how the “Last Great Value Stock” has created the Electric Vertical Take-Off and Landing (EVTOL) aircraft, a large passenger drone that is capable of flying people around cities.

According to Rahemtulla, these are “set to be certified in 2024” and “could replace helicopters all over the world.”

“Well, this company has created the EVTOL, which stands for the Electric Vertical Take-Off and Landing aircraft.

In short, this is a giant passenger drone that can fly people around cities like a helicopter.

These drones can travel at 200 mph.

They are set to be certified in 2024.

And they could replace helicopters all over the world.

Airbus estimates that this could be a $70 BILLION business!”

These presentations tend to overhype things a bit, so it might pay to take some of what Rahemtulla said with a pinch of salt, but what he said seems to check out overall.

And if you want to know more, there’s a page on the Rolls-Royce website about air taxi and eVTOL development that explains what the company is working on in detail.

What “announcement” is “coming on May 12?”

One thing that had me curious throughout the presentation was Karim Rahemtulla’s statement that a “major catalyst” in the form of an announcement is coming on May 12, which he believes could make his pick “one of the most sought-after stocks in the world.”

“There is a major catalyst… an announcement coming on May 12… that I believe is going to make this one of the most sought-after stocks in the world.”

What’s he talking about?

Well, towards the end of the presentation, Rahemtulla explained that he was talking about the company’s Annual General Meeting on May 12:

“It’s the company’s Annual General Meeting on May 12.

On that day, the CEO traditionally breaks down all the positive developments for the company.

I’m predicting that everything I’ve talked about will become widely known by the general public… resulting in the company’s stock having a very big day.”

What’s that? In the context of a public company, an Annual General Meeting (AGM) is a yearly gathering of a company’s interested shareholders, where it presents information about its performance and strategy, etc.

And according to the presentation, Rahemtulla is predicting this meeting could result in the company’s stock “having a very big day.”

The reality is, however, that nobody knows for sure how significant any AGM will be for any company. It could be bullish, bearish, or make very little difference. So there’s no guarantee anything significant will happen on May 12.

How Do You Invest in “The Last Great Value Stock?”

During the presentation, Karim Rahemtulla said that his stock pick doesn’t trade on the Nasdaq or NYSE, so you may be wondering how to invest in it.

“The company also trades in an unusual way.

You won’t find it on the Nasdaq or New York Stock Exchange. (And it’s not a penny stock on the pink sheets, either.)”

So, where is it listed?

Well, as you know, I believe his pick is Rolls-Royce Holdings PLC. And this stock is listed on the London Stock Exchange (LSE) under the ticker symbol RR.

As a quick side note, the stock price for the above ticker is shown in GBX on the company website or GBp on Yahoo! Finance. This may be a bit confusing if you’re not familiar with this currency, but both represent the same thing: the penny sterling.

And it’s pretty easy to convert into USD using sites like XE.com if you want to get an idea of the price in USD terms. Which, at the time of writing, is under $2 (as Rahemtulla suggests).

The company is also listed on the OTC market under the ticker RYCEY.

And no conversion is needed because it’s priced in USD on the OTC market. However, there are other things to consider if you go this route, so I suggest doing your own research.

Also, just to be clear, I am not making any recommendations about what you should or shouldn’t invest in. I’m sharing this because it’s related to what Karim Rahemtulla discussed in the presentation, and I know many who read this will want to know what the ticker is.

But either way, it’s totally up to you what you decide to do.

That said, if you want to research the stock further, there are some helpful articles online that discuss whether or not Rolls-Royce is a potentially good investment.

You could also check out Karim Rahemtulla’s research report, titled “The Last Great Value Stock,” where he goes into detail on (what I believe is) Rolls-Royce PLC.

In the report, he shares his research, instructions on how he suggests buying, and all the information related to his recommendation.

The only “catch” is that to access this report, you need to join Trade of the Day Plus, and this service costs $249 for a one-year subscription.

So not everyone is going to want to do that. But in case you are interested in giving the service a go, let’s take a look at what it’s about and how it works.

What Is Trade of the Day Plus?

Trade of the Day Plus is a stock advisory service run by Momentum Traders Alliance and headed up by Bryan Bottarelli and Karim Rahemtulla.

At the core of the service are daily emails that break down what’s happening in the market and weekly trade recommendations. The latter is where Rahemtulla shares his top pick for the week, along with his research and information on following his recommendation.

You also get updates on Rahemtulla’s recommendations, the research report I mentioned earlier, a bunch of other reports, and some training videos.

Is it worth it?

I recommend checking out my complete Trade of the Day Plus review for the whole story. But the gist of it is that the service could be worth a look if you want a faster-paced stock advisory and one that comes with option trade ideas (which this service does).

On the flip side, at $249 per year, the service is more expensive than most entry-level stock picking services I’ve come across. And not everyone wants a new stock pick every week.

So it ultimately depends on your goals and preferences.

Either way, the company website states that the service comes with a 365-day refund policy, so you can request a refund if you’re not happy with it.

And if you’re not sure if it’s worth giving a try, you could always check out “Trade of the Day,” a free email newsletter Momentum Traders Alliance puts out.

Who Is Karim Rahemtulla?

Karim Rahemtulla is the “Head Fundamental Tactician” at Momentum Traders Alliance. And aside from contributing to Trade of the Day Plus, he runs the Insider Matrix service and contributes to the company’s flagship service, The War Room.

According to his Momentum Traders Alliance profile, Rahemtulla began trading at boarding school in England before becoming the CFO of a trading firm in the late 1980s.

All told, the site says he has 30 years of experience as an options trader, has run several trading and stock picking services over the years, and authored a book called “Where in the World Should I Invest?”

How have his stock picks worked out?

It’s difficult to answer that without seeing a full list of his trades going back multiple decades, but Karim Rahemtulla claims to have a solid win rate since co-founding Monument Traders Alliance in 2019. In particular, he says he’s 4X’ed the market on average.

“Remember, since I co-founded Monument Traders Alliance in 2019… in our VIP trading research service, I’ve made 204 recommendations.

181 of them turned into winners, for an 88.7% win rate.

And my average trade has produced 4X the gains of the market.”

If true, that’s pretty impressive. But there’s still no guarantee you’ll make money following Karim Rahemtulla’s stock picks or trade ideas. No matter how successful someone is (or has been), there are always risks involved when speculating in the market.

Bottom Line

The “Last Great Value Stock” presentation centered around a “$2 stock” that Karim Rahemtulla predicts could “hit $50 in the future” or possibly more.

He didn’t reveal the name of his pick in the presentation, but based on the clues he shared, the “Last Great Value Stock” he’s referring to is Rolls-Royce Holdings.

There’s no doubt about it; Rolls-Royce is a great company.

And the stock is trading at historically low levels, so it could be a “great value stock,” especially considering all the cool stuff the company is working on.

However, only time will tell if Karim Rahemtulla’s prediction plays out because there are many factors to consider and, as with any investment, there are risks involved.

Anyway, that’s it from me. I hope you found this post helpful, and if you have any comments you’d like to add, feel free to chime in below. Thanks for reading.