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Can Royal Mail PLC outperform the FTSE 100 in 2019?

19 Dec 2018, 17:45

https://investomania.co.uk/2018/12/can-royal-mail-plc-outperform-the-ftse-100-in-2019/

Can Royal Mail PLC outperform the FTSE 100 in 2019?

Does Royal Mail PLC (LON:RMG) (RMG.L) offer investment appeal versus the FTSE 100?

December 18, 2018 Robert Stephens Royal Mail (LON:RMG)

The investment potential for Royal Mail PLC (LON:RMG) (RMG.L) may seem to be relatively limited at the moment. It has experienced a tough period, with a profit warning causing investor sentiment to come under significant pressure.

In my opinion, the stock may remain relatively unpopular in the near term. Investors seem to be cautious about its prospects due to a lack of sales and profit growth. Its cost avoidance and efficiency strategy does not appear to be delivering as per expectations, and this is set to contribute to a fall in EPS in the current year.

Under its new CEO, Royal Mail is due to put in place a revised strategy in the new year. This could lead to improving investor sentiment if it appears as though it has the potential to improve the financial prospects of the business over the medium term.

In my view, the company could offer stronger growth potential than many investors currently believe. Its parcels division in the UK has been growing volumes for a number of quarters, and this trend could continue if demand for online shopping moves higher over the medium term.

Likewise, Royal Mail’s international opportunities seem to be impressive. It is due to invest more heavily in this area, with there being the potential for further acquisitions in future in my opinion. This would make sense to me, since volume growth of around 10% was recorded in its most recent quarter.

Since the stock has a dividend yield of over 5%, I feel that it could offer good value for money at the moment compared to the wider FTSE 100. Sure, there may be uncertainty ahead after what has been a tough period for the business. But if its new CEO is able to put in place a sound strategy, I believe there could be scope for improving stock price performance over future years.

Can Royal Mail PLC outperform the FTSE 100 in 2019?

19 Dec 2018, 18:36

I think this could be right after all black is buying loads of shares he wouldn't do that if he didnt think things are going to improve

Can Royal Mail PLC outperform the FTSE 100 in 2019?

19 Dec 2018, 23:05

If the annualised dividends remain at 24p/share, the dividend yield is rather more generous than ‘over 5%’.
A buyer of the shares at today’s closing price of 280p will receive a stonking 8.57%, tax-free. Even if the dividends are only kept at that level, you’d get half your investment back in 6 years, plus potential growth in the share price (even if via a takeover bid)

Can Royal Mail PLC outperform the FTSE 100 in 2019?

20 Dec 2018, 17:03

I agree Wandle, I think the share is undersold at the moment and represents a good mid-long term investment. It feels on the shopfloor that it has been a really busy Xmas and parcels are through the roof. Positive Xmas figures along with inevitable renewed assault on cost-cutting, which
I believe there is scope for, and a settled political situation regarding Brexit all lead me too believe that RMG will perform well in 2019, and given its position now it could well be back in and outperforming the FTSE100.

Can Royal Mail PLC outperform the FTSE 100 in 2019?

23 Dec 2018, 12:33

mickeymacca wrote:I agree Wandle, I think the share is undersold at the moment and represents a good mid-long term investment. It feels on the shopfloor that it has been a really busy Xmas and parcels are through the roof. Positive Xmas figures along with inevitable renewed assault on cost-cutting, which
I believe there is scope for, and a settled political situation regarding Brexit all lead me too believe that RMG will perform well in 2019, and given its position now it could well be back in and outperforming the FTSE100.


COSTCUTTING. fair enough. Make you jobless, but never mind you will still have your shares.....

Can Royal Mail PLC outperform the FTSE 100 in 2019?

23 Dec 2018, 15:23

Navalron wrote:
mickeymacca wrote:I agree Wandle, I think the share is undersold at the moment and represents a good mid-long term investment. It feels on the shopfloor that it has been a really busy Xmas and parcels are through the roof. Positive Xmas figures along with inevitable renewed assault on cost-cutting, which
I believe there is scope for, and a settled political situation regarding Brexit all lead me too believe that RMG will perform well in 2019, and given its position now it could well be back in and outperforming the FTSE100.


COSTCUTTING. fair enough. Make you jobless, but never mind you will still have your shares.....


What interest have you got in this section? Is there not enough for you to stay angry about in the Blueshirts and The Union Room?

Can Royal Mail PLC outperform the FTSE 100 in 2019?

23 Dec 2018, 16:15

I can look at any section I like....so what if you don't agree with me...That's the point. Also I'm not angry, no no ho. It's Christmas. Merry Christmas to you and I hope you prove me wrong and I hope the shares rocket, I really do. Oh and have a good new year also. :thumbup

Can Royal Mail PLC outperform the FTSE 100 in 2019?

23 Dec 2018, 16:26

Fair play, I feel a bit mean now!

You too mate merry xmas and HNY

Can Royal Mail PLC outperform the FTSE 100 in 2019?

28 Dec 2018, 09:45

Some of RMs recent acquisitions have been written off as bad debt after it was found those companies were failing or not solvent. Being frugal is one thing but eventually RM have to realise that we cannot rely just on cost cutting to make profits and further the business. This is a finite resource and eventually we have to go the other way and expand the business. We are in the lead still but the others are chasing our tails and if they devise better business plans they will overtake us eventually.
I think we have to find a way to lower our prices somewhat but it is difficult. Currently companies like Hermes pay their staff under the minimum wage and about half of what posties receive. I'm not advocating a pay decrease especially as a lot of work completed by posties is currently effectively done unpaid.
Probably the way to go is to bite the bullet, lower the dividend , and invest that money in the business. An obvious example would be a preemptive decision to invest in larger vans to enlarge capacity. I currently use a worn out Peugeot Bipper which I like even with it's many faults but it isn't large enough to cope with any more business. We could think about releasing a time limited use cheaper stamp at Xmas and actually START advertising our business and look for more contracts. As it is we appear to be standing around hoping that something will happen.

Can Royal Mail PLC outperform the FTSE 100 in 2019?

28 Dec 2018, 13:51

Celgar wrote:Some of RMs recent acquisitions have been written off as bad debt after it was found those companies were failing or not solvent. Being frugal is one thing but eventually RM have to realise that we cannot rely just on cost cutting to make profits and further the business. This is a finite resource and eventually we have to go the other way and expand the business. We are in the lead still but the others are chasing our tails and if they devise better business plans they will overtake us eventually.
I think we have to find a way to lower our prices somewhat but it is difficult. Currently companies like Hermes pay their staff under the minimum wage and about half of what posties receive. I'm not advocating a pay decrease especially as a lot of work completed by posties is currently effectively done unpaid.
Probably the way to go is to bite the bullet, lower the dividend , and invest that money in the business. An obvious example would be a preemptive decision to invest in larger vans to enlarge capacity. I currently use a worn out Peugeot Bipper which I like even with it's many faults but it isn't large enough to cope with any more business. We could think about releasing a time limited use cheaper stamp at Xmas and actually START advertising our business and look for more contracts. As it is we appear to be standing around hoping that something will happen.


I agree fully with the above

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