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Yeah Boyo, given the swings it would be silly not to trade them but I do small amounts around the core holding.
Having said this I will only trade a stock if I am prepared to hold it long term.
I still see myself as building a position here though.
Added a bit at 335p. Now 346p & rising. JPM would be loving this and picking up the stock . DYOR
Short squeeze in US most shorted stocks in play currently with GME up 110% today.. keep an eye guys, OCADO could explode to the upside as the 2nd most shorted stock here in UK....ATB to long term holders and F2ck the shorters!!
Fair points Sangijuelas - appreciated.
I would prefer to hold OCDO long term but, given the volatility and erratic performance, I think any investor is obliged to manage their investment - which therefore involves some trading. So, in short (not a pun) I will trade if it seems prudent or beneficial to do so. Today's continuation of a 20+p drop from 358 is an example where action may be desirable. I do think that if OCDO is only viewed through the rose tinted 'tech and robotics is the future' lens then it's easy to overlook some of the fundamental flaws that VP is accused of overstating. I'm as neutral and objective as I can be about OCDO - the warning there is that, once you are invested (as I currently am), there is a natural reluctance to accept observations that place the target sp lower than you'd like to see. Ultimately, what will be will be and, like when you're driving along contentedly, you may sometimes find you have to slam on the brakes or hit the accelerator. ATB
Important to understand that the earnings profile of a typical module (for Ocado) is hugely loss making upfront, but very profitable once the module is mature. By my estimates, 17 modules should become mature in 2024 (meaning that the CAPEX spending is complete), while 9 modules "go live" meaning they begin to generate sales share for Ocado.
As a result, I estimate about £195m of profit for the solutions business this year, which could be the moment Ocado proves its model to the market. Looks like we're due to receive 0 new module orders this year, which is a worry going forward, however the overcapacity hangover from Covid should give way in the near term as demand catches up.
Investors in tech don't want it because of the Retail side and investors in supermarkets are like where are the profits and dividends?
And yet you have a company selling their tech whilst also having generated significant experience of working with it themselves and through partners.
There is value in this. Also in the Ocado brand itself and their customer data. The data is likely to be very valuable as it's for more affluent customers and now that Cookies are due to be phased out, marketing companies are going to have to source data more from the likes of Ocado and the other supermarkets.
Also Boyo as I understand it you are looking to trade whereas I am buying it to hold. I am more interested in where they will be in 5-10 years time. I think inflation has meant that supermarkets globally have been able to make high profits from their sales alone. Now that inflation is coming down they will have to start looking at their costs and efficiency.
I think Ocado is currently valued rigidly according to models developed to assess the success of pure play retailers. They are likely to be in a category to be assessed this way. So rather than discounting the retail side they ignore Solutions as it doesn't fit these valuation models.
Obviously anyone buying this over £12 needed their head examined at the time.
When I try to value Ocado I ignore the Retail side completely.
My focus is on the Solutions revenue, which is projected to be £500m this year. I then apply a sales to price ratio of 8, which is equivalent to the Autostore valuation giving a market cap of £4bn. This seems reasonable given that Autostore growth has stalled and Ocado still seems to be increasing revenue. If they get the Coles NSW site up and running in the next couple of months this should be a decent boost along with Sobey's sales growth and getting Madrid open in the summer.
So I feel that it's currently worth about 25% more. The unknown factor is whether they really can attract non grocery companies to Ocado Intelligent Automation.
For me the signs are positive. I have been following the posts from OIA on LinkedIn and one featuring automated battery swap got a high number of likes compared to other posts.
Some likes are from Ocado staff but there are also a decent amount from employees from the likes of Johnson and Johnson and Tesco's.
What about being demoted from ftse100?
VP is correct to point out that there have been many negative issues within this company. However, I would also say that the market itself (including analysts that have had to back-track) has been responsible for a total overvaluation of the company for much of the last six years. And, I believe, that’s an error that VP himself has acknowledged making in the past. There are understandably none so devout as the converted, of course.
Much of that market over-expectation appears to have been triggered by extreme on-line grocery trends during COVID, plus a shift in the market away from stocks marked down by the pandemic. Some shares, like OCDO, saw absurd increases in mar cap. The growth spike in on-line may also have triggered poor CFC strategic decisions by the company. Suggestions of a take-over by AMZ last year were an unsubstantiated distraction and current gossip about listing in the US should be treated much the same.
Meanwhile, a more realistic retail background has been established and, as reported recently, Ocado and Marks & Spencer, along with Lidl, were Britain's fastest growing grocers over the last quarter, (Source: Market researcher NIQ) with OCDO’s sales rising 12.0% in the 12 weeks to April 20. With much of the tech development work done and future capex related to sustainable growth, OCDO should be in a more stable and better controlled position going forward. Earnings from the technology may grow more slowly than many anticipate - but that is a typical bullish error. Those who invest in OCDO need to keep an eye on the tech, logistics and retail elements - it’s essentially a three trick pony and it needs to perform well in all three to deliver the best long term results.
This has to be the best entry point if you are planning long on Ocado.. Cannot see much further negative news left now.
seen this share price down all the way from £20 to £3... it may fall further but the fall should be limited.. . Lots of shorter still out there which is good for retail traders to at grab bargain price! But make sure you sell at rise of 3% and above as these shorter will bring it down back to the level they want! When it goes down again... trade again and repeat.. (This is applicable as long these shorter exist!)
DYOR
Good luck!
Close near 350p today will mark the bottom I suppose...
Next few months, will see potential sub 300p but 250p look unlikely even with US market nose dive.
But...
It will be below 200p if Ceo Stiener cash strap and has to go fund raising ie equity dilution. I am sure those newspapers analyst will bark on this a few months down thr road as M&S will not settle.
No one will pay 250p for equity dilution. Steep discount expected for UK stocks.
FTSE at all time high and this dog is at 52 week low. Let's see where it will be when the whole market corrects, which is well due now.
GME Short squeeze in progress as it was one of the most shorted stock in history and is up 40% pre market today in UsA. Could this squeeze spread across to UK with Ocado being the 2nd most shorted stock that could have a massive short squeeze...Anything is a possibility.
Short G-Y Bears doomed to failure short attack.
Hello Kitty says hodl Yoda.
Please do your own research as always and follow FCA guidelines.
Please e
I suppose there are some that consistently repeat the bull case, so why not consistently repeat the bear case. If you have a lot of time on your hands, go for it. It's up to individuals what to take on or indeed disregard.
Fair play Stupmy, You're not the first to filter me out. Most vehemently disagree with any shorts on this board.
If you dig deeper there's many negative issues within this company. Has been straight forward to capitalise on them and go short.
I think there's a very good possibility of Ocado needing to raise capital as costs rise, CFCs are not ordered as predicted.
Retail, you've been on here for 2-3 years, posted once and it's apparently a version of VP's posts. Explain your position? I'm finding the bb a bit irritating today. Maybe I just fell out of bed the wrong side!
They said on the last investor call that tech spend has peaked. Solutions revenue is anticipated to grow by up to £80m. Costs are also falling due to efficiency gains from deploying the Reimagined tech.
Not really sure what you're doing VP, but you're clearly focussed on doing it. Previously I viewed your input as of interest and adding balance. I believe I was wrong in that and have now filtered you as you're adding nothing new, explaining nothing and you clearly believe that you're repetitive posts will have some influence. Good luck with your positions.
This will break below 335p soon, especially when US market nosedive.
JP Morgan neutral means they are not sure, same like any other PI. If reduce sp and add on reduce instead of neutral, that will be make today so even worse.
Still waiting to accumulated at sub 330 to 300p..sub 300p is very likely.
No good news from Ocado is bad news for sp. M&S has no intention to settle with Ocado and we will see this drag out prolong impacting Ocado. Eventually this spell demise of M&S/Ocado collaboration as M&S knows Ocado cash strap. Maybe Ocado will sell cheap it retail arm to M&S.
I still believe Ocado must shed this M&S bs collaboration and move to US for tech listing and boost sp.
Given Ocados cash spend and given its reserves a capital raise looks set around a year from now, could be earlier. Ocado will want to raise cash long before their reserves run low imv.
Above is without any new CFCs orders occuring.
The other day you said 2 things. They aren't getting CFC orders and they will need to raise additional capital.
However, they would only need to raise capital if they got a substantial order for new CFCs.