Last tweeted this name back in October where above 550 the stock looked expensive. 2CentView sold it’s entire (small position) at 585.
With stock down 30% from it’s high, an article in today’s FT, according to Credit Suisse, the current consensus forecasts are 15% too high.
2CentView FV = 425
with 15% adjustment to consensus earnings, FV=390
So average is around 408 – so stock fairly priced here around 400.
2CentView strategy for low growth high dividend yield names, is to look for at least 15% upside to FV with carry of above 3% – so trade on $RMG is:
Buy around 350 (issue price was 330). Take profit target = 400, 5% carry. Stop 315.
Just because Royal mail is now a PLC it does not mean unions cannot try to prevent the company making the staff cuts if required to grow the business – but the the business does have potential if Parcel Farce can be fixed.