Member Info for DC2007

True, averaging down does that assuming the SP rises enough. Consider what happens if it goes the other way, then even more is lost. And putting more into this one investment increases your risk concentration overall.

Shaunymac, appreciate the shock of the drop, it's not nice. The SP of the company will rarely equal changes the fundamentals of a the company. They will often correlate, but the proportionate change in one can have varied effects on the other.

The change in advice issued by Royal Mail is material to them as a group; it's viscerally large too. This leads to panic in the markets and a sudden drop. When that settles a bit, a more rational question is: how have management missed this/got it so wrong? Immediately following that question can come doubts about the management's ability or their strategy. Even for a big company, £130-mil change in costs is big. It didn't help to do this in one go, late in the afternoon.

The market is forward looking and the drop in SP says it now has doubt over the previous expectations of RMG's earnings - the market is pricing in a reduction in expectations based on the latest news. If earnings reduce, then dividends cannot be sustained. All of this adds up to a lower price investors are willing to pay for the stock.

I don't know RMG in great depth, but from research a while back, they do have decent foundations and approach monopoly status for some things they do. I was put off investing by their pension obligations, union disruption and decline in letter volumes. Some of these have now been addressed and their parcel business has promise.

If you have all of your assets concentrated in this one stock then that is risky no matter what. Consider (or take advice) on how this risk can be mitigated and managed. RMG do not seem like they are in an existential crisis now and the recent devaluation need not be permanent. What you might do depends on your time horizon and any requirement you have for the cash.

All the best with your concentrated portfolio - I hope you can give sufficient time that it may work out well.

Oh so lucrative for anyone that has learned the ways of this volatile animal. Can't see the bargain prices of little more than two weeks ago anytime soon. Missed the boat. Well done to those sailing.

Anyone buying Easy at the minute? Very modest price for potential growth, but nervous about the effect of Brexit on the SP.

Edit function on LSE would be sublime.

Atb

Sitting tight could be right TMT. I'm curious: why do you see putting more in as a good idea? Atb

Does the very low ratio here concern anyone? Or do people see it as a bargain?

BG100, I agree with these predictions for the SP and future prospects. Well put.

A few below think a dividend is inevitable but I don't see it. At best it'll be nominal, but they might pass entirely. Passing would be sensible as they need to preserve cash and then use it smartly. This means the SP will take another battering when then results are released unless there plenty of outstanding news.

I understand wishful thinking for owners, but SPs of 30-40p by the end of the year are fantasy. Only after the post-Christmas update might it be possible to say what the tone for the SP will be in 2019.

Atb

A year is not long for an investment. You're average may be about 55p, It doesn't seem impossible that Petra will appreciate again to those levels and more. If you're uneasy with holding, probably best to refrain from adding/averaging down. Atb

Thanks for the analysis Pokerchips. Atb

What's your time horizon for your investment here TheMoneyTeam?

Since no significant closing has happened, fair to reason that they are expecting this to still go lower. Does anyone see any flaw in this reasoning?

Yes it's got that sinking look to it again. I've stopped being surprised by it a long time ago.

Thanks for the summary shakhtar. Atb

No Pokerchips, the average (mean), is not necessarily the same as the midpoint (median) - it depends on how evenly a sample is distributed.

Hi shakhtar, is the note from Citi available in full anywhere? Atb with your open position.

Please with SB's comments and tone here. First time I've had the sense that he 'gets it', and good to hear him directly address the doom-mongering in the press. Some actual evidence of glints of optimism at last.

Yes QueenElvis, someone stated the obvious on FXPO - as if I expect to influence the market, hilarious!

Opens again sharply lower on the back of the gift card story; short percentage up 60bps too; Chairman keeps saying everything is sound - it's like the leaders of the Titanic. So wish I'd disembarked at the last port. Excruciating to still be on board.

IC's article is lukewarm at best in the main text, it's only the summary that has upbeat notes. The tone has a touch of denial about it too given their buy advice at 95p(-61%) and 71p(-47%).

IC say the Williamson parcel is about to be released but give no source. Although its value is modest, resolution would be good for sentiment and likely boost the SP sharply.

Overall, I think the IC have it wrong to retaining their buy advice; holders will probably interpret that as 'add.' Curious to know BeingTheBanker, is £5k a serious position for you or more fun speculation?