DOWN DOWN DOWN,

[11aaa222]

Very very worrying I have a lot of my money / wealth tied up in these shares. I was one of the ones that initially brought in £10k at flotation and also have my free sip shares as well as the saye shares which I am subscribing to, as well as purchasing some more on the open market.

I do not know a great deal about my share holdings and Royal Mail as a plc and I was initially advised to "go for it" and buy them by my IFA and hence I have accumulated a total of over 5000 shares in the company. In particular the reason I have invested is due to the half decent dividend yield as compared to a bank savings account.

I am not particularly wealthy or rich (I am a postman after all) and the vast majority of my life savings are tied up in this stock, and I am now getting very worried due to what seems a now inevitable daily drop in the share price daily. Every day I have watched my holdings decline in value over the past couple of weeks, what does not help is that the ftse 100 is at record highs, it is now making me think that something us seriously wrong with the company? I have serious concerns I am watching my wealth corroding away very slowly and it is eating away at me. At their peak they were worth over £30k and now barely much more than £22k I have lost nearly 10k in the space of a couple of months. The dividend is almost meaningless if my capital position is being driven down.

Is it a good investment? When is moya greene likely to realise and liquidate any excess capital from the substantial property holdings Royal Mail have got? have not heard anything on nine elms paddington lately.?

Also the book value / NAV is worth almost exatly the market cap surely this can't be right and doesn't make sense? have the books been cooked are the any skeletons in the closet?

It is asset backed by such prime land and property so why is the fall not stopping? and when are we going to see an upturn ? soon I hope before I drop as it is really worrying me

Should I bail out and sell and swallow the loss (although still in profit overall it doesn't feel like it)?

thoughts please someone help me and give me some insight and guidance as I am not sleeping well at night at the moment. I am hoping there are knolegable people out there to answer some of these deep questions I have

[shepherdess]

HSBC gave shares of Royal Mail a price target of 513 indicating a potential increase of 15.07% from Royal Mail’s current price of 445.8.
Shares go up and down this time every year they go down the last two years at this time the price was lower, and the efficiency savings royal mail are making must be saving them a fortune .But if you are worried sell you have still made £3500 on your initial £10000 plus any dividend payments no way would you have made anything like that in a savings account
.,.

[wacko74]

I think as long as the divi levels remain where they currently are you should sit tight.

The recent falls imo are down to the strike action at Post Office Counters ltd (nothing at all to do with RMG but try telling the 'experts' in the stock market) and also the pension consultation and potential strike action from that. Also isn't their still the ongoing Ofcom inquiry hanging over us?

I do admit it's rather a frustrating share, it takes an age to crawl up to a reasonable level (i.e 500+) then every time it does it only takes the slightest bit of gloomy news or a negative rating from some minor broker to knock it back down all too easily.
I've seen other businesses deliver what should be very bad news i.e. profits warnings, yet it it has little to no effect on their SP... but for some reason the RMG SP seems to over react very badly to any vaguely negative news or rumours.

I still can't help thinking that there are certain elements within the stock market that are bitter at not being involved in the IPO and they now have their own agenda and are determined to try and constantly talk down the RMG SP.

[slinder123]

sell now before the pension strikes

[RobertT]

In my view the two main reasons for the share price declining are that RMs financial results have been steadily getting worse, plus the City know the pension issue will either mean higher costs than RM want to pay or loss of income due to strikes. Both of which will probably mean another drop in revenues/profits. So I suspect many investors are selling before any sh!t hits the fan.

Although I have to say I find it quite surprising you decided to put all your eggs in one basket. In my opinion if your IFA was worth his salt, he wouldn’t have advised you to do that!

On the plus side, while although the value of your shares has gone down you will be receiving over £1,100 in dividends each year and when or if the share price picks up, you may well be sitting pretty.

Ultimately that’s the gamble you take with any equity based investment.

[datasaint]

I don't think the Christmas results will go down particularly well on the stock market.

[11aaa222]

Although I have to say I find it quite surprising you decided to put all your eggs in one basket. In my opinion if your IFA was worth his salt, he wouldn’t have advised you to do that!

.

RobertT, just to reiterate I have not put all my eggs in one basket, I said the vast majority of my life savings are tied to this, the IFA advised me to buy in initially at the float as we as employees had priority for the shares and there was huge demand on the market. This advise only involved the purchase of around 3000 shares so I have nowhere near put all my eggs in one basket from the advice given on this, the rest of my shares approx 1500 are made up of the sip free shares and the saye option shares. And I purchased several hundred on open market due to cash isa rate dropping to under 1% at bank so not paying me anything like the income from the shares I have obtained.

Like I say I am still in profit so this is not a worry but of course when you have lost nearly 10k in valuation terms alone it is a bit worrying.

Although 1p up at this time I think if it gets up to £5.00 again I will bail out of all my shares and sell them all apart of course from sip and saye holdings

[RobertT]

Thanks for clearing that up.

Personally I know what it’s like to ‘lose’ around £15k from my equity investments back in the last crash in 2008 and it’s not a nice feeling, although I’ve long since regained those loses and am now well up on them. However a similar percentage crash now would see a much bigger drop in money terms.

I too bought some shares via the EPO at the time of privatisation and am saving some money via SAYE, but whether I actually use that money to buy more shares come October? will obviously depend on the price at the time. Plus I have the 913 free ones.

I see my fairly small holding as a long term thing and have no immediate plans to sell and am happy to take the dividends for the time being. From a purely investment point of view I think RM is still a good long term bet and as I’m not too heavily invested in them, I’m not too worried about the current share price. But having seen the price at over £6 shortly after privatisation and now around the £4.50 mark I can understand how you must feel to see your investment fall.

[CLINTEASTWOOD]

Hi
Share price can go up or down as you know.My personal opinion is that if pension problem gest sorted then the share price will rocket.Its all a gamble and that means only use the amount of money that you can afford to lose.As the saying goes the only things that are certain in this life are death and taxes.

[markj113]

If your IFA advised you to go nearly all in on one share offering you need a new IFA.

Diversification to minimise risk.

[koolishy67]

Hold don't even think to sell if your view is next 5 years royal mail share easily touch £6 AFTER 2020 don't forget 6 days delivery cap Goin go end at 2020 I am holding 3000 share may going to buy more if fall 3.50 to 4. First rules to.follow ones invest in.shares is don't.look price everyday.good luck

[cloherty1976]

If your IFA advised you to go nearly all in on one share offering you need a new IFA.

Diversification to minimise risk.

Good point but remember the shares did go north of £6 Which you could have sold and made a healthy profit. I think you have to always set a price to sell at and then reassess.. The dividend is great and hopefully this will keep on coming.

[Judgee]

Relax the drop is down to the winter dividend pay out. Many PI's drop out for a month or two at this time of year. Should see a slow but steady rise from February onwards as many dip in for the bigger summer dividends.

Just my thoughts and of course major events could influence the price but I very much doubt you will lose your shirt. My advice sit tight and as opportunities arise top slice often!

[jetblack]

First rules to.follow ones invest in.shares is don't.look price everyday.good luck

+1

The IPO of RM was probably the best share purchases you will ever make. I'm with your IFA on that. Of course, the free shares are even better.
Its all good.
The only problem here is that you are looking at any drops in the share price as you "losing" £X thousands.

Were these a long term purchase - I flipped my purchased RM shares at around £5.30 IIRC - cos if they were then you need to put them to one side and forget about them.

If you are really really dependant on the value of them over time (and you have too much invested in RM (cos presumably, on top of everything else, you work for them as well) and you are worried, and you know that you will worry, how about employing a strategy whereby you reduce a percentage of your holdings over time ?
I dunno, set a sell order at a particular % gain price for x amount of shares that would leave you up after dealing fees.

Of course, so long as they are above around £3.30 (again, IIRC) then you will always be up.

[westham000]

The letter side of the business is falling by 4% a year, that is a 20% drop in 5 years ! I think Royal Mail employ about 150000 people on rigid fixed term contracts IE a 20 year Postie will get 6 weeks holiday, most, not all will get 6 months full sick pay , plus 6 months half pay. I think new posties don't get paid for the first 3 days. Then you have uniform costs etc, pension cost, which they are trying to cut. CDV vans which the business has to supply and pay for etc . Now, most of our competitors , not all are self employed, and had none of these fixed cost. The universal service which we have to provide a delivery to every address in the country is guaranteed until 2021. I can see it ending within 6 years from now. They will use the declining mail volumes as an excuse to end it. Think of the cost savings. Mail delivery 3 days a week, we will primary be a parcel company. Students, house wife's or pensioners can be employed to deliver D TO D and mail over those 3 days on a self employed basis . Most important mail such as bank statements, utility bills are sent by email now, hence the decline in mail volumes. Any mail that needs a signature could be sent with parcels. Now the 64000 dollar question! Will the business still need to employ 150000 people? Personally, I can see a 40% cut in jobs, and a share price of a least £6.50 , if, and it is a big if, if we can maintain our leading market position .