Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Imo the SP rise today is Brexit related .As already stated,a lot of U.K. companies up today probably due to No deal being politically very difficult now. Certainty and confidence back into UK companies will come when the shambles of the hoc gets their act together ( maybe a long wait). My own opinion is that the withdrawal agreement will get through next time and then sanity will be restored. But who knows with this lot. Expect substantial rise if shorts have to close out in a hurry.
With the political crisis ongoing and likely to get worse ,why should the shorting reduce ? They are in no hurry UNTIL we get newsflow and the politics settle down. Shorters will move on when the time comes and then the SP will rerate - as happened around Christmas when they reduced and the SP started to recover. Unfortunately for most shareholders in U.K. companies the current situation is shorters dream - an extension of article 50 will prolong our agony - we need certainty and a forward plan. RMG is a solid company at the mercy of unpredictable events. Patience required.
It is true that the dividend at current rate is only just covered which is why I believe it will be positive to cut it by a third or so but they do have £600 mill in the bank which is basically the same amount as debt. The forecasts are exactly that - just forecasts ,which is why there must be efficiency savings as overall turnover has increased but operating costs have not decreased. This and other measures is what the market will look for and what Rico needs to deliver. As I repeat again, packets and online are an increasing market that needs to be exploited to the full.
I’m all in now -12500 shares - happy to hold and collect dividends for as long as it takes before my sell price. Shorts are in control now , but that won’t last for ever. The SP is partly Brexit driven for many reasons but mainly uncertainty. If we get a complete political crisis which I think is very likely from our incompetent politicians then yes the shorters will probably increase their positions - but I’m holding for minimum a year possibly longer if need be. One valuable lesson learned- never trust a politician ever. Won’t bother voting again.
Interesting programme on c4 last night - Robin Odey of Odey asset management ( an ardent brexiteer) explained that he’s shorted UK companies on the back of Brexit which I assume by their short holdings include RMG - he says it’s not personal but just to make money - the same with other wealthy people including Jacob Rees Mogg and George Osbourne - once again the wealthy know how to exploit joe public - I’m not condemning or praising them, just an observation and to be fair to JRM it wasn’t from U.K. stocks. Imo this will come good after the shorts start closing after positive news flow - that will come after May imo and maybe a bit after today - let’s see.
Brits are pretty resilient - they will still buy online whatever happens as that is the future,not all good unfortunately for bricks and mortar retailers who are having to adapt but people including myself find it easy and cheap to do so. All my adult kids buy this way and rarely go to the shops anymore. RMG I believe will find ways to get a bigger share of the online delivery market. Brexit is a temporary (we hope) blip that desperately needs sorting one way or another.
Agree with that assuming it’s decided one way or another - but IMO the big turning point will come in May when we and the markets know a lot more about RMG future. I usually invest in unloved large companies that have been hammered but are in generally good shape ( made a couple of errors on aim) and this is one !
Also good to know RMG have 600mill cash in bank with a debt to equity ratio of 0.16 %- and a 2billion pension surplus - All very positive numbers but shorters play the news game and are very good at exploiting it. I will make my last top up at 250 if it goes there and then it’s hold for me with a nice divi payment in July.
The way I look at it is if you had a savings account attached to a fund most people wouldn’t review it until maybe it’s annual anniversary - it would be the same here if I didn’t look for a year - I would be very surprised if the SP is not substantially higher in a years time once Brexit/results day/ 5 year outlook and dividend certainty are all out the way. Markets despise uncertainty so once these issues are sorted even if there is a dividend cut ( which I believe is positive)
then the funds come back in ( especially global ones which are Brexit nervous) - shorts will buy back and a more realistic price will resume. Apart from Brexit issue ,all the other issues are normal for shorters to jump on - until they are not relevant anymore ......................
One of my early investments was Morrison’s- they had gone down a bit so I used most of my sipp money and bought them without really understanding shorting or what I was doing. I watched with horror as they were driven down ( somewhat by heavy shorting) and stood by week after week with huge regret and then sold the lot at a huge loss very near the bottom. Then,as you do, watched over the weeks/months as they soared upwards way above my initial buy in. Lesson learned - shorters do this until they run out of steam and savvy investors pick them up. Ask yourself - are Royal Mail going bust - no - are they heavily debted - no - are they making a loss - no - are they trading at a high PE - no - are they paying a rubbish dividend - no ( even if its cut in half) - so the moral is - patience ,patience ,patience - you’ll only make a loss if you sell ( give) your shares to the shorters/ institutions that want them at a bargain price so they make money out of you.
As previous posts I totally disagree with you Derek. Having worked in a nationalised company( British Gas) for many years before privatisation it was very very inefficient and ran at a huge loss before being privatised. Imo only the railways should be renationalised as that makes sense. Royal Mail has huge potential albeit at the expense of manpower and union decline but I’m afraid that’s the way it is these days. Automation will make many jobs redundant as has been the case over the last couple of decades. I’m not a big fan of any political party as they are all self centred liars promising things that are unsuitable or just don’t happen. RMG as I.ve previously stated are in a growing market - they just have to adopt changes to realise the potential.
Hopefully our pathetic shambles “members of parliament “ can finally take away the indecision that markets hate next week. If they grow up and find a way through the mess then I suspect many U.K. companies SPs along with RMG will benefit - but who knows with that lot ............
My own view is that all the negatives are already priced in and the market ( hampered by the shorts) has not yet taken its long term view. RMG is in a growing market (online ordering) and this part will grow as long as Rico can see a way to further exploit it and deliver high tech efficiency to make the company better at what it already does. I am probably in the minority but I think letter volumes will increase in coming years , mainly on the basis that the cycle of cards/ marketing etc will return to fashion - you’ve only got to look at how busy places like card factory are ( go see for yourself) - same as why kindle is on the decline and real books returning with a vengeance. Rico imo is the man for the job ,been there and done it - nows the time to buy ( and I am) imo as there is much more that can be done. I’m looking 1-3 years in front - not the present.
Wow that’s pessimistic at 150.
Updated EOY completion as follows ;
Redceo - 425 - Oakleaf
stYd. - 370 - Oakleaf
POD. - 444 - Oakleaf
Fruitster - 390 - beat
DerekR - 300 - CP sport
Pastyc - 202 - ( assumed Oakleaf)
Falkland investor - 150 - ( assumed Oakleaf)
Anyone else - guess the SP at close 31/12/19 and donate £10 to the winners ( nearest to actual SP) chosen charity via just giving page that will be set on competition close. If you do not state your chosen charity I will assume it’s Oakleaf enterprise ( mental health) unless you correct me. Thankyou for everyone so far.
Need a blue day today please Mr Market.
pastyc - please can you confirm your charity choice - btw hope you’re wrong with your prediction otherwise my sipp will be holed big time. I’m not concerned with the SP short term - it could go lower or it could go higher - very rare to get in at the bottom or sell at the top ,but medium/long term I’m looking to RMG becoming more efficient and opening up other revenue streams - it’s all possible and hopefully we should know more come market day. I.ve been in many shares ,PNN,LLOY,EZJ etc etc that have been hit then bounced back, sometimes justifiably sometimes for no reason at all - but my research leads me to believe RMG is undervalued and will rerate at some point - but who knows for sure,certainly not me.
Entries so far as follows ;
Redceo - 425 Oakleaf
stYd - 370. Oakleaf
POD - 444 Oakleaf
DerekR - 300 - CP sport
Fruitster - 390 - beat
Will keep tabs on it and update as and when.
I also bought some more on preset 272.00 - long way to go ..............
Indeed it’s a matter of time - this share is deffo a medium/ long hold for me. Let the shorters have their “fun” ,collect the dividend and wait for a realistic SP. I think it might be an idea to set up a a “predict the end of year SP” as they have done on LLOY. Basically anyone who is interested can guess the end of year SP to nearest penny for a pledge of £10 to their chosen charity and the nearest wins with all the participants giving £10 to the winning charity via just giving. If anyone else is interest I will start the ball rolling with 444.00 at 31/12/2019 to Oakleaf ( mental health) Anyone else ?
I think that IF Mays deal gets through we may see a lot more investment back into RMG and other U.K. companies - could be time for the shorters to close out if that happens - just a thought ,but why didn’t M&S use Royal Mail for deliveries instead of Ocado - sure there must be some way of making it work ?
Let’s first of all state that the independent is anything but that - it’s biased for remain - if you look at whatuktninks.org which covers many different polls you’ll find that actually things are pretty much the same as June 16 - divided !
I’m in despair of posts like these - she’s been a bit “stupid” - No ,she wasn’t stupid - she supported and still supports a terrorist group that killed children in Manchester, people in London,Paris,Brussels etc etc. What is the matter with people like you that would welcome people back into our country that hate you. Would you invite someone like that into your home to live with you ? We want people in this country who support us and like living here. She’s not welcome here .