The Royal Mail share price is up 100% in the past year. Here’s what I’m doing now

first_img I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Simply click below to discover how you can take advantage of this. Enter Your Email Address jonathansmith1 has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Jonathan Smith | Monday, 25th January, 2021 | More on: RMG Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Image source: Getty Images center_img I remember buying Royal Mail (LSE:RM) shares in the initial subscription period back in 2013. It wasn’t a long-term play for me back then, and after the Royal Mail share price rallied to 600p after only a few months, I sold out. Since then, I’ve always had one eye on the share price. It fell after that early rally but managed to bounce back to 631p in May 2018 before a steady decline set in.In that time, I’ve increasingly doubted that Royal Mail can be a successful business in the private sector. It’s a service, almost a public good, that was once provided by the government. In a similar way to national defence and healthcare, private sector companies can struggle to be financially viable in this area.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…But in recent months, the Royal Mail share price has gone from bottoming out around 130p in March and headed higher ever since. With a share price of almost 420p at Monday’s opening, it’s doubled in value over the past year. If I’d bought at the March low, I’d have gained around 220%. Would I buy today though?Reasons for the Royal Mail share price gainsTo better understand these moves, I need to look at the mid-term drivers first. Last summer, the company announced that it was starting a large restructure of the business. The letters market was still falling, but the more lucrative parcels sector was something Royal Mail wanted to shift towards. With the impact of the pandemic, the need to survive meant this restructure was brought forward. As part of the shift, it announced over 2,000 job cuts. That’s expected to be completed by March and to save £130m, with other spending cuts and a continued move towards automation meaning lower costs going forward. The share price was negatively affected in the short term, which is natural. Now that we’re several months down the line, the share price is feeling the benefits from the change of direction.For the half year through to the end of September, revenues were up 4.9%, driven by parcels growth of 33.2%. Despite recording a loss, the outlook for the full year is better, with a revision higher on revenue projections. If realised, the business would break-even, it said. This boosted the share price.Other recent positives include a settlement with workers in December for a 3.7% pay rise. Added to this was the announcement of Simon Thompson just a couple of weeks ago as the new CEO.Where do we go from here?All of the above factors are driving the share price higher in the short term, with good momentum. In fact, I think the outlook is positive for the future, so would consider buying the stock. It seems the management team is finally waking up to the concept that as a publicly listed company, it needs to be more focused on the finances. The shift in strategy (sped up by Covid-19) seems to reflect this wake-up call.Of course, it’s a risky company, one that’s currently loss-making. High volatility can easily see large short-term corrections lower. Such investments aren’t suitable for everyone and if I buy, it’ll be for the long-term, ignoring near-term fluctuations. The Royal Mail share price is up 100% in the past year. Here’s what I’m doing now Our 6 ‘Best Buys Now’ Shares I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. “This Stock Could Be Like Buying Amazon in 1997” See all posts by Jonathan Smithlast_img

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