Royal Mail anyone?

Tommygun66

Junior member
20 0
Unless I'm missing something I don't see anyone talking about the recent privatisation of Royal Mail in the UK. Anyway taking a position?

Will the big players sell off on Monday/Tuesday to make their 36% gains or hold on for the 6% dividend? Or attempt both? Interested what you think.
 

barjon

Legendary member
10,705 1,809
not sure what RM's weighting in ftse will be, but all those fundies have got to get hold of the right proportion if they haven't already done so.
 

Hate2Lose

Active member
155 3
RMG traded as high as 475p - 44% return for those who got in at 330p
I asked for the reports from Accendo Markets which was good and bought some which is in profit so far. Hope RMG will send me some profit by post:cool:
 

Tytus_Barnowl

Member
96 9
:LOL::LOL::LOL:Just watching it now. If ever anyone wants to know why many retail traders are confirmed as LOSERS then watch todays events on Iplayer.:LOL::LOL::LOL:
 
L

Liquid validity

0 0
http://www.theguardian.com/business/2013/oct/13/postal-workers-strike-ballot-pay-conditions
http://www.cwu.org/royal-mail-strike-ballot-vote-yes.html
http://www.thisisderbyshire.co.uk/U...tory-19882612-detail/story.html#axzz2hoUCnSVr

Strike ballot closes Oct 16, earliest strike date Oct 23
Could be a good short if strike announced tomorrow :LOL:

Hope everyone has done their online xmas shopping,
if not, I really wouldn't recommend ordering during a strike period.
All your stuff will end up at the bottom of the backlog pile,
this from last 2009 strike:
 

MayZerG

Active member
150 4
Royal Mail went up for sale months ago, no one bought it, that alone should give you warning signs. They are well behind technology wise to the likes of DHL, TNT, Fedex, UKMail. Not only that but they have to deliver post from them companies too! Increasing the work load.

This is a definite NO from me, the only benefit would have been to buy it and then sell within the first few days.
 
L

Liquid validity

0 0
Royal Mail went up for sale months ago, no one bought it, that alone should give you warning signs. They are well behind technology wise to the likes of DHL, TNT, Fedex, UKMail. Not only that but they have to deliver post from them companies too! Increasing the work load.

This is a definite NO from me, the only benefit would have been to buy it and then sell within the first few days.

Agree, short or not at all.
RMG have widespread competition, directly with TNT end to end delivery trials in London.
Growing parcels sector fiercely competitive.
Poor industrial relations, ludicrous regulation that allows competitors
to cherry pick best contracts, then get RM to deliver.
List is endless, asset stripping of prime London sites for re-development
might paper over the cracks for a while though :LOL:
 
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Jack o'Clubs

Experienced member
1,554 342
Agree, short or not at all.
RMG have widespread competition, directly with TNT end to end delivery trials in London.
Growing parcels sector fiercely competitive.
Poor industrial relations, ludicrous regulation that allows competitors
to cherry pick best contracts, then get RM to deliver.
List is endless, asset stripping of prime London sites for re-development
might paper over the cracks for a while though :LOL:

Everything has a price. All those risks can be factored into forecasts, plus some room for nasty surprises, and a valuation derived. Whether it's above or below the current market price I don't know as I haven't done the work, but if equity investing (as opposed to trading) was as simple as buying 'good' stories and selling 'bad' ones, we'd all be rich...
 
L

Liquid validity

0 0
Everything has a price. All those risks can be factored into forecasts, plus some room for nasty surprises, and a valuation derived. Whether it's above or below the current market price I don't know as I haven't done the work, but if equity investing (as opposed to trading) was as simple as buying 'good' stories and selling 'bad' ones, we'd all be rich...

True, my point was the current balance sheet does not always tell the whole story.
Another example would be Tesco, balance sheet analysis only gets you so far.
Without looking at the mechanics of the business and its competition,
you only get half the picture.

Example, Tesco in my view have overstretched themselves with store numbers.
They are currently trying to rationalise operating costs in a way which may
impact customer service more than culling excess stores.

Another example with RM - van fleet modernised and updated inline with the
whole modernisation program. What most analysts and even RM procurement
were not aware of at time of appraisal and acquisition of that new fleet was the
weakness of diesel particulate exhaust filters and short journeys combination.
In fact due to the RM modernisation process, more vans are needed for much shorter trips.
https://www.google.co.uk/#q=diesel+particulate+exhaust+filter+and+short+journeys
http://www.thisismoney.co.uk/money/...l-cars-Drivers-warned-diesel-filter-trap.html
http://www.honestjohn.co.uk/faq/diesel-particulate-filters/
All modern diesels are affected.
Diesel particulate filters frequently need replacing much earlier with short trips.
Typical consumer repair bill £1000-3000, although that will be lowered
with in house fleet maintenance (labour charge and bulk trade discount).
That extra fleet maintenance cost won't appear on the balance sheet for a while.
That may seem peanuts to a large company, but then margins are peanuts as well...

RM fleet size:
https://www.whatdotheyknow.com/requ...5/attach/html/4/Burchell DTUP 8SJLTT.pdf.html
http://www.drivingforbetterbusiness.com/casestudies/royalmail.aspx
Approx 28000 car derived vans, obviously the whole fleet is not brand new,
but at the very least half of that number is affected.

They have a new modern van fleet unfit for purpose, with breakdowns
and potential engine damage, but more importantly increased running costs
and shortened vehicle lifespan.

None of this information can be found on a balance sheet.
Thats just a few examples, all this is public domain if you know where and how to find it...
 
Last edited:

Jack o'Clubs

Experienced member
1,554 342
True, my point was the current balance sheet does not always tell the whole story.
Another example would be Tesco, balance sheet analysis only gets you so far.
Without looking at the mechanics of the business and its competition,
you only get half the picture.

Example, Tesco in my view have overstretched themselves with store numbers.
They are currently trying to rationalise operating costs in a way which may
impact customer service more than culling excess stores.

Another example with RM - van fleet modernised and updated inline with the
whole modernisation program. What most analysts and even RM procurement
were not aware of at time of appraisal and acquisition of that new fleet was the
weakness of diesel particulate exhaust filters and short journeys combination.
They have a new modern van fleet unfit for purpose, with breakdowns
and potential engine damage, but more importantly increased running costs
and shortened vehicle lifespan.

None of this information can be found on a balance sheet.
Thats just a few examples, all this is public domain if you know where and how to find it...

That wasn't really my point. You can put numbers on all the things you've mentioned, and good job if you've done some primary research. Equity analysts (the good ones at least) go sniffing round the businesses they look at all the time to get that kind of information edge by kicking the tyres. When you've put all this in your model you can come up with a valuation and then decide whether it's a buy or a sell. Otherwise how do you know the price isn't already (over)discounting the risks?
 
 
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