Will the Royal Mail PLC share price ever recover after 57% fall in one year?

Post by **postareale** » 30 Mar 2019, 13:53

https://investomania.co.uk/2019/03/will ... -one-year/

Will the Royal Mail PLC share price ever recover after 57% fall in one year?
Can Royal Mail PLC’s (LON:RMG) (RMG.L) share price deliver a turnaround?

March 29, 2019 Robert Stephens
Royal Mail (LON:RMG)

Things keep getting tougher for the Royal Mail PLC (LON:RMG) (RMG.L) share price. While the FTSE 100 and FTSE 250 have made gains since the start of the year, it has continued to fall. It is now down by 57% over the last year, with it having shown little sign of mounting a successful recovery.

Difficult outlook

Of course, the profit warning released by the company last year caused investor sentiment to weaken in my opinion. It showed that the strategy of avoiding costs and improving efficiency was not working out as planned, and that as a result its financial performance would be below expectations.

While disappointing, the company also faces continued difficulties in its UK letters division. There is a gradual decline in demand for letter delivery according to my research, and this could mean that Royal Mail faces a continued headwind in this part of the business over the medium term. This could act as a continued drag on its financial performance, and may mean that investor sentiment remains weak for a period of time.

Investor sentiment may also be negatively impacted by the prospect of a general election. Labour is apparently keen on the idea of nationalising a variety of industries. Royal Mail could be included in this, and the potential for this to take place may cause investors to demand a margin of safety over the medium term.

Turnaround prospects

The international and UK parcels divisions of the business have continued to perform relatively well in my view. Parcels are gaining in popularity as the rise of ecommerce continues. I think this trend could continue over the long run, with improved technology and a desire among consumers for greater convenience likely to lead to a greater usage of mobile devices to order a variety of goods and services.

Royal Mail’s international growth has been encouraging in recent quarters to my mind. The company has been able to build its international business so that it is a significant contributor to its overall financial performance. Continued investment in this area could strengthen the company’s long-term growth prospects to my mind, and may help to diversify it away from the UK at what remains a challenging period from a political standpoint.

Investment prospects

In my opinion, the Royal Mail share price could experience continued challenges in the short run. Its downward trend may persist for a little while, since investor sentiment is very downbeat at the moment.

At the same time, though, I’m optimistic about its potential to generate improving financial performance in the long run. The growth potential of its international business and its UK parcels division could be strong, and may help to offset the decline in UK letters. Therefore, while risky in my eyes, it could offer turnaround potential over an extended time period.

zombiepostman · Post by **zombiepostman** » 30 Mar 2019, 19:18

what a bunch of crock any company making £500 million in this day and age is not on its uppers and why would rico back buy so many shares if he didn't think he was not going to make a killing.this company is totally corrupt to the core and the postman is the one that gets crapped on from a great height.

Post by **aiden01** » 30 Mar 2019, 20:29

zombiepostman wrote:what a bunch of crock any company making £500 million in this day and age is not on its uppers and why would rico back buy so many shares if he didn't think he was not going to make a killing.this company is totally corrupt to the core and the postman is the one that gets crapped on from a great height.

Don't forget though you can also buy shares aswell if you think rico is going to make a fortune then so can you.

Post by **rambo1** » 30 Mar 2019, 21:01

aiden01 wrote:
zombiepostman wrote:what a bunch of crock any company making £500 million in this day and age is not on its uppers and why would rico back buy so many shares if he didn't think he was not going to make a killing.this company is totally corrupt to the core and the postman is the one that gets crapped on from a great height.
Don't forget though you can also buy shares aswell if you think rico is going to make a fortune then so can you.

He's probably the sort that bash workplace coaches but doesn't apply to become one himself too.

Post by **wacko74** » 31 Mar 2019, 06:34

I'm even boring myself with repeatedly saying this now, but the big decline in the SP is all to with institutional shorters and nothing to do with company fundamentals.

There are currently various dubious trades occurring with RMG... Shorters colluding and working in unison with each other to drive the price down and keep it down, for instance buying each other out of their short positions with out of hours, under the counter trading, keeping the SP low even when buys are outnumbering sells.

Once these hyenas have eventually had their fill they ultimately all have to close their short positions and will then probably do just the opposite and ramp the price up.

NWpostie · Post by **NWpostie** » 31 Mar 2019, 09:31

Long term shares perform well.
This is an artificially manufactured dip so speculators can buy low and sell high.
Its timing when to buy the lowest before others jump in and pushing the prices higher.

Celgar · Post by **Celgar** » 09 Apr 2019, 12:17

Apparently I read somewhere that AA & RM share were the most shorted shares in the UK so that probably is still the case. Nevertheless I do seriously regret buying RM shares at 360p in the scheme before last offered to Postie's by the RM. This company should be doing really well with the increase in internet shopping but there are just too many issues weighted against us. From Amazon & Hermes ability to pay staff below the minimum wage to things like DSA and total ineptitude of directors & upper management our future still looks fairly bleak.

Post by **Navalron** » 09 Apr 2019, 16:44

Celgar wrote:Apparently I read somewhere that AA & RM share were the most shorted shares in the UK so that probably is still the case. Nevertheless I do seriously regret buying RM shares at 360p in the scheme before last offered to Postie's by the RM. This company should be doing really well with the increase in internet shopping but there are just too many issues weighted against us. From Amazon & Hermes ability to pay staff below the minimum wage to things like DSA and total ineptitude of directors & upper management our future still looks fairly bleak.

Yes I agree with you celgar. What chance have you got when grannies, mums, my mate are delivering parcels for yodel at 90p per parcel. Most of them are breaking the law by not having business insurance. Parcel force cannot compete with that level of slave wage. It's not even a wage it's just that people need to feed their kids and will do just about anything. Sad country.