“Sell your Royal Mail shares”, says long/short fund manager

[TrueBlueTerrier]

http://www.trustnet.com/News/502346/sel ... d-manager/" onclick="window.open(this.href);return false;

Investors should sell their Royal Mail shares, according to Mark Boucher, manager of the Smith & Williamson Enterprise fund, who says he has taken up a short position in the stock in the past few weeks.

ALT_TAG Royal Mail was launched last year into the public market and surfed a wave of strong investor demand.

The shares were widely said to be undervalued at the point of the IPO and are up 70 per cent since then, but Boucher says this strong run will end.

“The one new issue we are short of is Royal Mail,” he said. “I think it’s this factor where when the company comes to market there’s a large roadshow, people have a lot of expectation of management because the brokers are involved and talking to people about it at the time.”

“They have an interest in getting a deal done so only positive news gets into the market.”

“With Royal Mail it was set at a price where it would be successful, but at some time people were over-excited and ignored the things that could go wrong.”

Data from FE Analytics shows the stock has made 17.26 per cent since the frantic first day of trading, but has started to lose money in recent weeks.

Boucher says that the stock is still at risk of industrial action in the future, while it is facing structural issues within its industry.

The decline in the volume of letters sent will hurt the stock in the longer run, he suggests, as will the growth of spam email which has taken over from junk mail advertising.

For this reason the manager says the stock is one of the few new short positions in the £46m Smith & Williamson Enterprise fund.

His view contrasts with that of Miton’s George Godber who told FE Trustnet last month that he thought the stock was still undervalued.

[Judgee]

Guess he doesn't realise how much we love parcels and how much RM are making on the ever expanding parcels market!

[taxi4leighton]

this is the classic case,when these advisors tell investors to SELL SELL SELL
wait as the price of shares slump
then buy millions at rock bottom price

[NWpostie]

this is the classic case,when these advisors tell investors to SELL SELL SELL
wait as the price of shares slump
then buy millions at rock bottom price

Not the first time, the Bear and Bull market, I would imagine the demand will go up when the Dividend gets paid out.

[freelunch]

Typical investment manager, utter pillock.
He's shorting RM, a relatively stable cash-generative utility-type performance company with guaranteed dividends.
Meanwhile money-burning bio-technology companies and cash-black-hole internet start-ups are getting pummelled.
Clueless idiot fund manager missed the boat, big time.
And they get paid for this drivel!

[aposter]

Typical investment manager, utter pillock.
He's shorting RM, a relatively stable cash-generative utility-type performance company with guaranteed dividends.
Meanwhile money-burning bio-technology companies and cash-black-hole internet start-ups are getting pummelled.
Clueless idiot fund manager missed the boat, big time.
And they get paid for this drivel!

Hardly, he will be making a fortune, shares are dropping quicker then a tarts knickers when the fairs in town.

[pants123]

the rich have made their greedy millions off royal mail......

the posties sell their shares in 3 years and get £20 quid for all 725 shares..........

says it all..

shove your condescending shares up your a r s e..

royal mail employees where never meant to get anything out of these shares, just the same as colleague shares....

worth s h i t..

[TheBushBaby]

I think that the share price will dip below £3:30 by December. But hey look on the bright side, the cheaper the price the cheaper it is for a future Government to re-nationlise. Get your raffle tickets here !!

[newtimes]

If the share price keeps falling the will senior management be forced out?

[TrueBlueTerrier]

If the share price keeps falling the will senior management be forced out?

Unlikely. They warned that this would happen as soon as the regulator started its current investiigation. They'll blame unfair competition and RM being handcuffed by the "Headroom Access" regime.

[wacko74]

I'd still love someone to explain to me just why the regulator has any say at all in how we conduct our business with regards to DSA, this is a commercial arrangement between private companies and our DSA ''partners'' are perfectly free to process, distribute and deliver their own mail if they don't like the service or price we offer them.

This has nothing at all to do with protecting the public service, which is what the regulator is supposed to be there to do (although it actually seems to do precious little of that)