The new name certainly seems more accurate for the underlying business. However, there’s also speculation that this decision was an attempt to move away from the Royal Mail brand, which has been riddled with controversy and has now confirmed scandals since its privatisation.

But why was Britain’s leading postal service privatised?

When was the Post Office privatised?

The privatisation of the Post Office actually began in 2011 when Parliament issued the Postal Services Act 2011. This essentially allowed the British government to begin selling its shares in the Post Office to public investors as well as begin the restructuring of the business.

Eventually, in 2013, the government sold 60% of its shares by floating them on the London Stock Exchange. The Royal Mail was now a publicly traded stock that investors both at home and in institutions could begin buying and selling on the open market.

The British government still held 30% ownership in the business until June 2015, when half of this was once again sold. However, this time, it went exclusively to institutional investors such as pension funds and mutual funds. Later in October, the government’s remaining shares were sold or gifted to employees, completing the privatisation process.

Why was the Post Office privatised?

The government’s decision to relinquish its stake in Royal Mail was made for a variety of economic, political, and ideological reasons. However, in general, there were four primary goals.

1. Raise Capital – By divesting Royal Mail, the government was able to raise a considerable sum of capital. It also shifted the burden of future investments onto private investors, allowing the national budget to be reallocated into public services and national debt reduction.
2. Attract Foreign Investment – The privatisation of a public entity served as a signal to foreign investors that the UK was committed to a market-based economic model attracting fresh capital into Britain’s economy.
3. Improve Efficiency – Prior to its privatisation, the Post Office was struggling with rising expenses driven by operating inefficiencies. Through private ownership, the firm would be forced to innovate, streamline operations, and improve the quality of service.
4. Create Competition – Prior to privatisation, the Post Office essentially operated as a legal monopoly. This lack of competition removed the need to innovate and improve the quality of service.

There were additional reasons behind the call to privatise the Post Office. The rapid rise of the e-commerce industry was a trend the UK government was eager to capitalise on. Through privatisation, the availability and quality of parcel delivery would encourage more online spending from consumers, resulting in higher economic GDP growth. It also solved a recurring challenge where the monopoly was being significantly restricted by European anti-trust regulations.

How has the Post Office share price performed since privatisation?

So, how did it all turn out? A few of the government’s goals were a success. Competition in the British postal market has flourished with new couriers for businesses and individuals to choose from. A total of £3.3bn was raised from the government’s divestment. And international investment in the UK increased.

However, as for the Post Office, the assumption that privatisation would lead to efficiency gains proved inaccurate. In fact, performance continued to decline, and this is clearly reflected in the stock chart.

Since October 2013, the Post Office share price, or rather the International Distribution Services share price, has delivered an all-time loss of 19.5%, with the stock price falling off a cliff by 75% between 2018 and 2020. For reference, the FTSE 100, over the same period, delivered a total return of +85%. However, it’s worth mentioning that the Post Office share price has begun to recover in the following years rising by almost 200% from its pandemic lows.

The efficiency gains failed to materialise. And the relationship between management and the employee unions became adversarial. This translated into postal strikes, hundreds of millions in lost revenues, lacklustre profits, and rising debt.

Even in more recent years, the firm continues to find itself riddled with problems. A regulatory investigation was launched in 2023 against the firm for failing to meet minimum performance targets. This included:

• Deliver 93% of first-class mail within one working day of collection.
• Deliver 98.5% of second-class mail within three working days of collection.
• Complete 99.9% of delivery routes.

The actual numbers achieved by the company stood at 73.7%, 90.7%, and 89.35%, respectively.

In the meantime, the revelation that more than 900 sub-postmasters were wrongly prosecuted as a result of a faulty IT system hasn’t exactly helped the group’s reputation. While the business is now under new management, significant legal repercussions may still be brought against it.

What are the disadvantages of privatisation?

When privatisation is executed correctly, there will be numerous advantages, as we’ve already discussed. However, it also comes paired with several disadvantages.

Under private ownership, the pursuit of profits and efficiency often translates into job losses. Employees can often be made redundant, resulting in large initial layoffs and further potential job cuts in the following years. The pursuit of lowering costs can also result in cutting corners, which in some instances can be harmful to society, employees, and members of the public.

A business review can also result in significant price increases to pass on costs of service enhancement to customers. It can also lead to certain regions of the country being given priority and better infrastructure. Private companies seldom invest in areas where profits can’t be efficiently made, resulting in reduced quality of service in rural areas compared to urban cities.

The post When And Why Was The Post Office Privatised? appeared first on The Motley Fool UK.

IDS is ‘in play’

On 17 April, International Distributions Services shares soared as news of a foreign takeover bid emerged. Though this offer was promptly rejected, this bidder could return by the middle of next week.

The would-be owner of this 508-year-old British institution is billionaire Daniel Křetínský and his EP Group. Křetínský — nicknamed the ‘Czech sphinx’ — has acquired a reputation for big, bold European acquisitions.

Priced at 320p a share, his initial proposal valued this FTSE 250 firm at £4.5bn — a near-50% premium to the previous day’s closing price. But after the directors rejected this bid, Křetínský has until 15 May to return with an improved offer.

The M&A playbook

What generally happens in the mergers and acquisitions FTSE 100 and FTSE 250 playbook is the putative bidder returns with a second, higher bid.

This may be accepted — or rejected, perhaps triggering a third round of talks. Also, on occasion, this auction process causes other interested buyers to throw their hats into the ring.

Clearly, for Křetínský to have any chance of winning over the directors and major shareholders of the firm, he’s going to have to return with a bid price north of 320p. But what if his second offer also falls flat?

What next?

If the two parties don’t reach a deal on an agreed valuation for this business, then the auction could fall apart, with both sides walking away. Under UK Takeover Panel rules, this would prevent Křetínský returning with a follow-up bid for six months.

Generally, when takeover bids fall apart, the target’s share price usually follows suit. Hence, the share price looks like a binary bet to me right now. If a deal can be made, then the shares could surge. But if no offer is accepted, then down goes the stock.

With a 27.5% holding, Křetínský is already International Distributions Services’ largest shareholder. Nevertheless, he can’t steamroll the board into accepting what it sees as an inferior bid. Hence, I suspect an offer closer to, say, £4 will be needed to seal any deal.

Schrödinger’s shares?

That said, this would be a 25% uplift from Křetínský’s initial bid of 320p a share. And if he were to walk away, the fall could be quite steep for this stock. But he may be very keen to acquire GLS, the company’s highly profitable European logistics business.

Meanwhile, talks between the two sides continue, with that all-important deadline looming midweek. Hence, the IDS share price seems to me to be in a position similar to Schrödinger’s cat. Right now, it could be worth both more and less than the current price, depending on next week’s outcome!

The post Why the IDS share price could leap next week! appeared first on The Motley Fool UK.

Currently, the UK’s elite FTSE 100 index stands just 0.2% below its 52-week high and a similar level under its all-time intra-day high of 8,047.06 points, hit on 16 February 2023. Meanwhile, the US S&P 500 index lies 5.4% below its record high of 5,264.85 points, reached on 28 March.

This share suddenly soared

Go back a week and more and the International Distributions Services share price was in decline. On Tuesday, 16 April, this widely held stock closed at 214.2p, 26.4% below its 52-week high of 291.2p recorded on 22 December.

Then last Wednesday, some great news arrived out of the blue, sending IDS shares soaring. The reason? An unexpected takeover approach for the company from a deep-pocketed, acquisitive Czech billionaire.

Daniel Křetínský and his EP Group made an indicative £4.5bn offer to buy the entire business, formerly known as Royal Mail. This valued the UK’s universal postal service provider at 320p a share — a near-50% premium to its closing price the previous day.

However, several of the group’s leading shareholders were quick to dismiss this offer as ‘opportunistic’ and ‘an absolute joke’. Some claim that GLS — the company’s European logistics arm — alone could be worth £4 a share.

As is typical in M&A (mergers and acquisitions) battles, the FTSE 250 company’s board was quick to reject this opening offer. Thus, the man known as the ‘Czech sphinx’ has until 15 May to make a formal offer for IDS or walk away.

With a 27.5% holding, Křetínský is already the largest stakeholder in IDS. But I suspect that it will take a lot more than 320p a share to win over long-suffering shareholders in this former state-owned monopoly.

We sold our IDS shares

I feel I must make two disclosures at this point. My wife and I owned IDS shares from June 2022 until December 2023, selling out for a small profit late last year. Also, Daniel Křetínský is a major shareholder in West Ham United, of which I am a fan.

According to various reports, Křetínský intends to return with a higher offer to win this battle. But even at the original 320p, the IDS share price has nearly 15% upside from the current 278.35p. Of course, should he walk away, then the shares could slump southwards again.

What next?

In Europe, GLS is a highly profitable outfit for IDS, but the Royal Mail’s postal service is heavily loss-making. Also, the UK arm was hit by sustained and painful strike action last year. Even so, the group has a leading market share of about a quarter of UK parcel deliveries.

Twenty years ago, Royal Mail delivered about 20bn letters a year, but this figure has crashed to a forecasted 7bn deliveries this year. Despite this volume collapse, Křetínský clearly sees value in the wider group.

If he were to return with a bid of 360p a share, then this would be a 29.3% premium to the IDS share price today. For now, I will sit back on the side-lines as an ex-shareholder and await any future fireworks!

The post How the IDS share price could leap 15%+ from here appeared first on The Motley Fool UK.

IDS: I didn’t sell

In June 2022, my wife and I bought shares in International Distributions Services (LSE: IDS), formerly Royal Mail. We paid 273.2p to buy into the provider of the UK’s universal postal service.

Alas, this trade soon went wrong, as the IDS share price kept falling, continuing its descent from 600p in mid-2021. On 14 October, it bottomed out at 173.65p, down almost £1 (or 36.4%) from our entry price.

Launched in 1516 by Henry VIII, the former Royal Mail was battered by lengthy strikes in 2022-23. This industrial action caused huge disruption to the group, racking up huge losses.

On 18 May 2023, the firm revealed an annual operating loss of £1.04bn and cancelled its dividend. I almost sold then, but decided not to with the share price below 200p.

Ditching the no-dividend stock

Despite steep falls in its share price, I held on to our IDS stake and awaited developments — perhaps more by luck than judgement. The shares have since roared back to life, hitting a 2023 high of 291.2p on 22 December.

Seeing this price surge, I decided to seize the opportunity to exit the no-dividend stock. We finally sold our IDS shares for 279.5p a share. After charges, this produced a 6.8% profit on our original investment — boosted by extra shares we’d bought with earlier IDS dividends.

I consider myself lucky to have made a small positive return on this difficult investment. Though IDS boomed as parcel deliveries soared in Covid-hit 2020-21, worker disputes later hit this business hard. And with no dividend expected until 2025, I’m forced to look elsewhere for income.

I’ll buy this Footsie giant

My investing hero, American mega-billionaire and philanthropist Warren Buffett, once said: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

Taking this advice to heart, I’m going to buy into drinks giant Diageo (LSE: DGE). It’s one of the world’s largest producers of alcoholic drinks, with over 200 popular brands including gin, whisky, rum and stout. Each week, billions of drinkers sip and gulp Diageo products.

However, hit by the higher cost of living, quarterly sales growth has slowed, with sales falling in Latin America and the Caribbean. After weak results on 10 November, the share price crashed to a 52-week low of 2,719p.

On Friday (5 January) the stock closed at 2,765p, valuing this consumer-goods Goliath at £61.9bn. This means that its shares trade on a multiple of 16.8 times earnings. Also, they offer a dividend yield of 2.9% a year, covered 2.1 times by trailing earnings.

To me, these fundamentals look attractive to buy into one of the FTSE 100‘s true powerhouses. Sure, these shares aren’t cheap, but quality usually sells at a premium — much like Diageo’s top-end brands.

Down 24.3% over one year, but up 0.3% over five years, this seems like as good a time as any to get on board the Diageo bandwagon. Hence, I’ll purchase a stake as soon as regulations allow (mid-week next week). And I hope this investment goes better than my IDS trade!

The post I sold this FTSE 250 share to buy this fallen angel! appeared first on The Motley Fool UK.

While everything seems to be going wrong for the group, it could be argued it’s at a low ebb. Is there an opportunity here for a cheap buy? Or should I steer clear of this falling knife? Let’s explore.

Before answering those questions, it’s worth breaking down the latest earnings. While Royal Mail suffered that £319m loss, the other side of IDS – parcel delivery service GLS – made another handsome profit. For the six months to September, GLS turned a £150m profit, enough for IDS to fund a modest dividend. 

These contrasting fortunes are the key issue for me. Clearly, International Distributions Services can run a profitable delivery business, but the challenge of running Royal Mail is too much at present. So what’s going on then? Well, IDS management believes the Royal Mail issues are broken down into two parts. 

The issues

The first is the ongoing industrial action on the part of its workforce. The Royal Mail service has been crippled as a result of the strikes and they were at their worst last year. It’s little surprise that so much service disruption has hampered the bottom line. The good news here is a pay deal has been agreed, which might be the end of it. 

The second issue is the more serious one, for me. I’m referring to the unique challenge of running Royal Mail, and that is its Universal Service Obligation. The USO mandates that some services must be available for every single member of the British public. For mail, this means a ‘one price goes anywhere’ letter delivery service for six days a week. 

I think most of us welcome this law. The USO provides a better service for every member of society. But of course, it makes it harder for a private firm like IDS to profit from running it. 

The result is that CEO Martin Seidenberg has called for a change in regulation, asking for the government to “do their bit”. The reasoning is that the network isn’t set up to deal with 7bn letters a year when it used to deliver 20bn letters. 

Not spectacular

On the one hand, these demands seem reasonable from a service perspective. But on the other, it makes me question how viable a national letter delivery service is as a private enterprise, and even whether it was a good idea to privatise it in the first place. The results so far haven’t exactly been spectacular. 

I imagine the USO problem will only get worse as fewer letters are written. Moreover, if IDS can’t turn a profit with first-class stamps now at £1.25, I’m not optimistic about the future of the business. I won’t be buying any shares.

The post More bad news for IDS stock! Is the Royal Mail owner now an opportunity for a cheap buy? appeared first on The Motley Fool UK.

Returning to profit

The owner of Royal Mail anticipates paying a small dividend from its General Logistics Systems (GLS) unit this fiscal year.

The company says its adjusted operating performance is hovering around the breakeven point.

IDS reported a group adjusted operating loss of £169m for the six months ending 24 September, compared to £57m the previous year.

Royal Mail, facing challenges like strikes, a cyber security incident, an Ofcom fine, and loss of its monopoly on parcels from Post Office branches, contributed to the overall weakness.

Parcel revenues — a higher-margin side of the business — fell 6.2% seemingly amid competition for Post Office parcels.

The company’s group revenue saw a marginal 0.4% increase in the first half, with a 5.9% growth at GLS offset by Royal Mail’s weaknesses.

IDS had initially aimed to turn a profit this fiscal year, but the aforementioned obstacles have led to adjusted operating performance expectations near breakeven.

Of course, the return to profitability will be a key milestone for the company that has endured a tough two years. The share price is currently hovering near where it was in the early stages of the pandemic, when the stock experienced a severe correction.

Worth the price?

IDS certainly doesn’t look expensive trading at just 0.2 times sales, however, it’s not profitable at this moment in time. As such, we have to look further into the medium term to gain a better idea of the company’s valuation.

In the below table, I’m using consensus estimates for the company’s earnings per share (EPS) for the coming three years, including this fiscal year ending in March. These EPS forecasts also allow me to create forward price-to-earnings (P/E) ratios bases on this data and the current share price.

Moving towards the end of our time period, we can see a P/E of 6.9 for 2026. That sounds pretty cheap, and it is. The FTSE 100 average is currently around 14.

It’s also worth highlighting that IDS carries £1.5bn in net debt. That’s a lot for a company which remains unprofitable and has a market cap of just £2.3bn. The below table highlights how most of this debt is held in the problematic Royal Mail part of the business.

As such, I, like several analysts, would like to see more evidence that IDS’s performance is turning around. High debt levels and struggling operations amid union disputes is a real concern for investors.

Right now, I won’t be adding the Royal Mail owner to my Stocks and Shares ISA, but I’ll keep an close eye on the company. Hopefully, things will improve for this iconic mail delivery service.

The post Should I buy the Royal Mail owner for my Stocks & Shares ISA? appeared first on The Motley Fool UK.

IDS shares slump

In mid-2021, the IDS share price was riding high. On 7 June 2021, this FTSE 250 stock hit an intra-day high of 613.8p — a level it’s never been near since. By 31 December 2001, the shares had fallen back to close at 506p.

Then the shares had a truly awful year, ending 2022 at 213p. Horribly, the stock lost a whopping 57.9% of its value in a single year. This happened because lengthy industrial action by Royal Mail workers sent the group hurtling from profit to loss.

Revenues, earnings, and cash flow were all hammered by sustained business disruption. As a result, the board cancelled the company’s cash dividends. The last payout was 13.3p a share, paid on 6 September 2022.

We bought at a terrible time

IDS’s dividend for the 2021/22 financial year totalled 40p, which I viewed as an attractive income stream back then. My wife bought IDS shares for our family portfolio in late June 2022 at an all-in price of 273.2p a share.

Our timing could hardly have been worse, as the IDS share price then dropped and kept falling. At its 52-week low, it bottomed out at 173.65p on 14 October 2022 — almost exactly £1 below our buy price.

At that time, I agonised whether to sell this ailing stock and walk away. But as I cannot know the future, I decided to hold on for recovery. The good news is that the shares are almost back to price we paid.

As I write, this stock trades at 269.9p, valuing the business at £2.6bn. Though this is less than half the peak valuation, I welcome this comeback. We are sitting on a paper loss of just 1.2% today. Phew.

But do I sell and walk away?

Share-price collapse and recovery aside, do I think International Distributions Services is a good business today? Based on recent personal experiences, I’d say not.

For example, several of our Christmas 2022 cards went missing during repeated strikes. Then my wife returned a batch of expiring stamps to Royal Mail, which it promptly lost. In July, my mother’s birthday card (sent First Class) arrived after nine days. Last month, the keys to our holiday flat got lost in the post.

Based solely on these personal anecdotes, I’d have already dumped our IDS stock. But the group is more than just Royal Mail. IDS also owns General Logistics Systems (GLS), which operates parcel delivery networks in Europe. And IDS is making big profits.

What’s more, I find it hard to sell stocks that are on the rise. And IDS shares are up 17.3% over six months and 31.9% over the past year (but 43.4% lower over five years).

To answer my question in the title, I won’t sell my IDS stock just yet. After all, it gives me the right to attend the company’s next AGM to complain about Royal Mail’s poor service. And I might just do that!

The post Now IDS shares have recovered, do I dump Royal Mail? appeared first on The Motley Fool UK.

Another FTSE 250 flop

In late June of last year, my wife bought shares in what was then known as Royal Mail. In early October, the group then changed its name to International Distributions Services (LSE: IDS).

More than a year ago, we paid an all-in price of £2.73 a share to buy our stake in what was soon to become IDS. We bought this holding as a value and dividend play, drawn by the high cash yield this stock offered at that time.

Alas, this FTSE 250 firm’s shares soon headed sharply south. By 14 October, they’d plunged to a 52-week low of 173.65p. At this point, we were sitting on a paper loss of more than a third (-36.4%). Urgh.

But I’m not a short-term investor. And the good news is that this stock has suddenly come back to life recently, leaping upwards since early June. Here’s how it has performed over six different timescales:

Also, since closing at 197.2p on 9 June, this popular and widely held stock has since jumped by more than a quarter (+26%). This recent surge of strength has saved me some blushes, plus it has improved my standing with my fund administrator (my good lady wife).

For me, IDS is ‘in triage’

As I write just before the closing bell on Monday afternoon, the IDS share price stands at 248.5p. This still leaves it 9% below our buy price, but I can easily live with that. However, two problems remain that mean this FTSE share doesn’t enjoy my full confidence right now.

First, the company may well make a substantial loss in the current financial year — something I very much dislike as a value-oriented investor.

Second, the group scrapped its cash dividend last November, so this FTSE 250 share currently has a running cash yield of 0%. Again, this isn’t great for me, because I love watching my dividends rolling in.

Given these setbacks, I’ve put this stock into what I call ‘triage’. This means that while I have no immediate intention of selling these shares, I won’t be buying more any time soon. In other words, IDS stock is on my ‘watch and wait’ list for now.

When might this change? Ideally, I’d like to see the firm’s profitability improve, given that it has reached agreement with unions to end strike action. Also, I’d like some firm news on when the dividend will be reinstated. But that could well be some while away!

The post At last, this popular FTSE share is getting exciting! appeared first on The Motley Fool UK.

Business in the parcel delivery operation weakened after the boost it enjoyed during Covid. And the Royal Mail owner was beset by ongoing industrial action.

The outcome was a thumping great loss for the year. But something significant happened in the spring that may draw a line under the company’s troubles. And it could have created a floor for the share price.

In April 2023 the company announced it had reached an agreement with the Communication Workers Union (CWU).

An end to the troubles?

The 35-page national agreement between the CWU and the company covers all operations and functions across the business. And it was formally endorsed by the union’s postal executive.

Ballot papers regarding the agreement were sent to the union’s members on 22 June and the outcome is due to be announced on 11 July. So I reckon it’s a good time to focus on the stock right now.

With the share price near 234p, the price-to-book value is just under 0.6. And a reading below one suggests the valuation is less than the value of the firm’s assets. However, it’s always worth considering that assets may be worth less in reality than the figures shown in the accounts.

Yet City analysts are optimistic. They’ve pencilled in a robust recovery in earnings for the trading year to March 2025. And they think the shareholder dividend will likely increase by almost 60% that year.

But that projected increase arises because the directors stopped the final dividend for the year to March 2023. And that was because the poor performance of Royal Mail, and increased investment in GLS – its European parcels division. 

Nevertheless, set against those analysts’ expectations, the forward-looking dividend yield is around 7.6% as I write.

The valuation indicators add up to a compelling situation. And the stock could be presenting investors with the value proposition of the decade. Although there’s still a lot of risk here.

An optimistic outlook

In May’s preliminary full-year results report, Independent non-executive chair Keith Williams was optimistic.

The company now has more options to deliver change and progress has already been achieved in Royal Mail, Williams said. Following industrial action, IDS “served notice” in September 2022 on a number of historic CWU agreements and policies that were delaying transformation. And that allowed the company to move to a more modern industrial relations framework. 

Williams reckons the move empowered IDS to move ahead with elements of its change programme during the second half of the trading year. And that meant the directors could complete revisions across all delivery and processing units and right-size the workforce to the current workload. And far fewer people left under voluntary redundancy than anticipated. 

One positive outcome for the business is that IDS started the current trading year with 10,000 fewer full-time equivalent employees (FTE) employees than the previous year. And that looks set to reduce costs by around £150m in the current trading year. 

As with most deep-value situations, the business looks messy. But we could be seeing the first green shoots of a meaningful turnaround with IDS. And I’m watching closely with a view to considering the shares for my portfolio.

The post Has the IDS share price created the value opportunity of the decade? appeared first on The Motley Fool UK.

What caused this drop? And is IDS stock a buy now? Let’s explore.

A 15% fall

Last month, IDS released full-year results and they made for unpleasant reading. Revenues of the firm’s UK delivery service – which still goes by the name Royal Mail – went from £8.5bn in 2022 to £7.4bn in 2023. This caused an operating loss of just over £1bn for 2023 compared to an operating profit of £250m in 2022. The delivery company went from profitable to bleeding money.

Management said this poor performance was driven by three causes – industrial action throughout the year, an inability to make productivity improvements (possibly because of the strikes), and lowered volumes in online shopping. This caused the shares to drop 13% in a week and they haven’t recovered since. The current price of 196p is now close to the 52-week low of just 182p last September. 

So, with the shares looking this cheap, is now the time to pick up a bargain?

Is it a buy?

The biggest obstacle for me, if I want to open a position here, is the ongoing dispute with its unions. The Communications Workers Union (CWU) – which represents postal workers – is demanding pay increases for its workers. It’s already led to strikes that were estimated to cost IDS £11m a day. This partly explains those disappointing results. Supposedly, a deal has been agreed for a 10% pay bump, but it’s not been voted on yet. The share price could prove to be cheap if this gets dealt with quickly. 

And if this dispute does get resolved, it’s worth pointing out that IDS generates tons of revenue. Some £12bn in total revenue looks high compared to a £1.9bn market cap. That’s a lot of money to play with if the company can resolve the industrial action and make efficiency improvements. We’ve seen how IDS can do that with GLS, its overseas arm that’s booming in over 40 countries. While Royal Mail was losing millions, GLS enjoyed a £297m operating profit last year. The success is such that there’s talk of spinning it off. 

A return to profits would likely mean high dividend payments too. Yields of 8%+ are common looking at the last few years, although IDS did scrap this year’s final dividend. A return to dividends would be nice for the cash returns, but also would likely boost the share price if they were to become regular. 

Is that likely? Well, one red flag is that short interest in IDS has increased over the last month. Now, nearly 6% of all shares are shorted, which makes it the fifth most shorted firm on the London Stock Exchange. That’s a lot of investors who think the shares are still overvalued and expect them to slide down further.

Putting it all together, the uncertainty is a little too high for me to open a position here.

The post Are International Distributions Services (IDS) shares a bargain near their 52-week lows? appeared first on The Motley Fool UK.