Last week, I bought some Rolls-Royce (LSE: RR.) shares for my ISA. I paid 1,459p per share, so I’m obviously very late to the party given that they were trading below 100p only a few years ago.

Why did I buy them now? Three reasons…

I wanted industrial exposure

One is that I’ve been looking to get more industrial exposure within my ISA. Currently, my portfolio’s very tech-heavy and I want to be a bit more diversified.

What I like about Rolls-Royce is that it has three different business segments – civil aviation engines, defence, and nuclear power. So it has a number of ways to generate growth. Having three different segments also lowers risk a bit. For example, if conditions are weak in the civil aviation space, the company could potentially still do well.

I’ll point out that in the long run, both the defence and nuclear divisions have a lot of growth potential. I’m particularly excited about its nuclear prospects – there’s a ton of potential here.

The share price has fallen

The next reason I bought is that the shares were trading about 8% below their highs. In early August, they were at 1,585p. Now obviously an 8% pullback isn’t huge. In the past though, buying the dip has paid off.

I’ll point out that I’ve come close to buying on previous dips. For example, when the share price fell to around 1,100p in April, I took a good look at the stock. Annoyingly, I didn’t buy then. So I didn’t want to miss this opportunity.

Strong results and rising price targets

Finally, results continue to be very strong. In late July, the company posted a 46% increase in underlying operating profit for the first half of the year. On the back of this performance, it raised its full-year 2026 guidance. For the year, it now expects underlying operating profit of £4.7bn-£4.9bn.

Note that since these results, a number of brokers have raised their price target for the stock. For example, Jefferies has gone to 2,000p (37% above my Buy price) while Berenberg has gone to 1,900p (+30%).

A falling share price in the face of strong results and rising broker price targets is a trading pattern I look for. In the past, I’ve had success with this set-up.

The stock’s still pricey

Now, it’s worth pointing out that the company’s valuation is still high. Looking at earnings forecasts for next year, the forward-looking price-to-earnings (P/E) ratio is about 30.

The stock may need some time to grow into this valuation. And it could see further weakness along the way – a drop to 1,200-1,300p wouldn’t surprise me.

I’m comfortable with short-term share price volatility though. For me, this is a long-term hold. I’ve started with a very small position. I plan to build it out slowly over time, buying on the dips.