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Author bushwhacker     View Profile     Add to favourites     Ignore
Date posted 2017-09-11 08:50
Subject Negativity 
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Dear All,
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
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