Share Price Tumbling

[wacko74]

Around 60p down in just the last 2-3 weeks, anyone got any explanation for it?

The SP seemed to recover following OFCOMS little exercise in self promotion back in mid-July, there hasn't been any other bad news or negative broker ratings lately and we're now post divi for the year, there doesn't seem to be any obvious reason for it?

[RobertT]

Over the last 2 years(nearly) the RM share price has proved to be very volatile, but the low point since privatisation has been about £3.90 per share, so it’s still quite a lot higher than that.
It has lost about 10% of its value in the last month compared to around 5-6% for the FTSE index. I don’t think there is any specific explanation other than, it’s what shares do.

[wacko74]

Yeah I realise RMG has been a bit of roller coaster, but for the last 6 months it's been heading steadily upwards and seemed to be well established at +500p, this sudden downturn just seems a bit inexplicable, not that I'm particularly worried as I'm holding for the long term, just curious more than anything.

[TrueBlueTerrier]

It looks like the market thinks there is trouble coming from ofcom.

Royal Mail in hot water with Ofcom http://www.investorschronicle.co.uk/201 ... pr-01-8104" onclick="window.open(this.href);return false;

Shares in Royal Mail Group (RMG) fell 3 per cent after Ofcom warned it had breached competition laws and prevented rivals from expanding. The postal watchdog claimed the prices the former state-owned company charges rivals for bulk mail delivery services had been unlawful, spurring speculation that it could be fined up to a tenth of global revenues.

A "disappointed" Royal Mail hit back, saying its pricing changes were fully compliant with competition law. A final decision is expected next year.
IC VIEW:

This development could be potentially devastating for Royal Mail, which remains hamstrung by its statutory obligation to provide universal postal coverage across the UK. But at 487p, shares trade on a reasonable 15 times forecast earnings and come with an attractive 4.3 per cent dividend yield. Hold

Last IC view: Hold, 500p, 16 Jun 2015

[Spedley]

I'd guess because the quite healthy dividend has been paid now so best move your money elsewhere. If you can judge and time it right and buy before the dividend payment is announced then you get the dividend and the price increase from people wanting the dividend.

[Judgee]

The financial markets tend to drop during the summer anyway and pick up after September.

The Financial situation world wide is also an influencing factor and things are not looking rosy any where else. Just look at the Chinese markets they have dropped over 25% in the last few weeks.

[TrueBlueTerrier]

3 Stocks Trading Far Too Cheaply: Banco Santander SA, Royal Mail PLC And Taylor Wimpey plc http://www.fool.co.uk/investing/2015/08 ... impey-plc/" onclick="window.open(this.href);return false;

Royal Mail

Like Santander, Britain’s largest courier Royal Mail (LSE: RMG) hasn’t had the rub of the green in recent weeks, with heavy weakness since mid-July taking a huge bite out of 2015’s gains — the stock is now up just 7% from January. But thanks to the exit of City Link last year, and Whistl closing its letters division more recently, Royal Mail now has a clear run on the UK market, while its GLS operations overseas are also paying off handsomely.

Although the London firm faces an Ofcom competition probe into its role in the market, Royal Mail is unlikely to face draconian action that could threaten its ability to effectively service Britain’s households, in my opinion. The result of huge restructuring is expected to push earnings 22% lower in the year ending March 2016, although this still leaves the business dealing on an attractive P/E ratio of 12.7 times. And a 7% rebound next year cuts this reading to just 12.5 times.

And given the firm’s bubbly long-term growth picture, the City expects Royal Mail to deliver a chunky 21.7p per share dividend in the current period, resulting in a gigantic 4.5% yield. And this reading moves to 4.7% for 2017 thanks to predictions of a 22.6p reward.