The Nest Egg Portfolio: Bpost Collapses After A Weak Q3 And Is Now Yielding 13.5%, But For How Long?

Introduction Bpost (OTC:BPOSF) (OTCPK: BPOSY) saw its share price drop by a double digit percentage after announcing its Q3 results, but although those financial results weren't great, it does look like the market is overreacting. In this article I will explain why the situation doesn't appear to be as bad as the share price makes it look and why I am going 'overweight' on Bpost in the Nest Egg Portfolio.
Did you miss the previous edition of the Nest Egg Portfolio where I discussed the 6+% dividend yield on the BT Group (BT) stock? You can re-read it here.
Portfolio update Bpost: this is a pure overreaction The financial results
The third quarter was indeed pretty weak, but this wasn't entirely unexpected. The summer months are traditionally weak for Bpost, and the performance in the second half of the year is usually 'saved' by a strong fourth quarter (gift season and all that). Bpost's CEO confirms the Q3 performance is actually in line with the performance in the same quarter in the previous few years, while he also confirms Q4 should be much stronger.
The parcel division remains incredibly important for Bpost, and although the 143% increase of the parcel-related revenue is a good start (but isn't entirely comparable considering the acquisition of Radial wasn't completed before Q3 last year). That being said, the revenue from domestic and international parcels increased by 18.5% and 11.5%, while the total domestic mail revenue... Read more