There is a real negativity behind Royal Mail shares. To fall out of the FTSE 100 is a bad blow, but what I cannot understand is the sentiment that has caused the shares to fall to a value that allowed it to happen.
In my opinion the company is worth ~ £5 per share in equity, of which a large percentage is tangible assets. The pension pot seems to be in a healthy state, which is more can be said than for a lot of other FTSE companies. Revenue is growing, given not at a start-up rate, but nevertheless growing. It is a very dominant player within its sphere, and could use its muscle to expand into other countries. It pays a good dividend etc.
The fact that is was a government run institution has its downfalls, but as time progresses the competitive nature of a company will remove any of the inefficiencies left over, thus reducing costs and increasing profits.
To me this is a safe defensive stock but recent price falls contradict this and I can't see a reason for the initial poor sentiment
The content of the messages posted represents the opinions of the author, and does not represent the opinions of Interactive Investor Trading Limited or its affiliates and has not been approved or issued by Interactive Investor Trading Limited.
You should be aware that the other participants of the above discussion group are strangers to you and may make statements which may be misleading, deceptive or wrong.
Please remember that the value of investments or income from them may go down as well as up and that the past performance of an investment is not a guide to its performance in the future.
The discussion boards on this site are intended to be an information sharing forum and is not intended to address your particular requirements.
Whilst information provided on them can help with your investment research you need to consider carefully whether you should make (or refraining from making) investment or other decisions based on what you see without doing further research on investments you are interested in.
Participating in this forum cannot be a substitute for obtaining advice from an appropriate expert independent adviser who takes into account your circumstances and specific investment needs in selected investments that are appropriate for you.