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Share Price Information for Ocado (OCDO)

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Share Price: 362.30
Bid: 359.10
Ask: 359.40
Change: -0.20 (-0.06%)
Spread: 0.30 (0.084%)
Open: 363.00
High: 366.50
Low: 352.90
Prev. Close: 362.50
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Sunday share tips: The Hut Group, Ocado

Sun, 20th Sep 2020 23:01

(Sharecast News) - Matt Moulding's online retailer The Hut Group and its subsequent flotation have both proven a resounding success.
But can Moulding, who retains ownership over a quarter of the business even after the recent float valuing the company at £5.75bn, repeat the trick on public markets?

For the Sunday Times's Sam Chambers, investors should avoid the stock.

The firm's main attraction was its proprietary e-commerce platform, known as Ingenuity, which it licenses out to other consumer goods firms so that they can manage their own digital operations.

Ingenuity was easily the most profitable and fastest-growing bit of the company, but despite the "rosy" short-term outlook "it operates in a competitive market", Chambers cautioned.

Chambers also took issue with the company's incentive plan for its boss, with Moulding in line to receive £700m-worth of shares if The Hut Group's market valuation reached £7.25bn over the next two years.

"That troubles governance wonks - and it should trouble shareholders too, given the potential dilution," the tipster said.

He also pointed out how Moulding had retained the posts of chief executive officer and chairman, and was also the landlord of the company's properties- which are held in another company.



The Mail on Sunday's Midas column told investors to 'buy' shares of Ocado, despite the fact that the shares were "expensive" and that the company was still turning a loss, with the latter making it hard to value.

"But with a stay-at-home winter on the cards and the prospect of cold and wet queues outside shops unappealing, the appearance of Pete in the Percy Pig Van will be a welcome one to many households," Midas argued.

In particular, Midas touted the company's technology platform and its recent increase in capacity, which it said meant that Ocado was well-placed to deliver on the "unprecedented" increase in demand for online shopping.

As well, Ocado's tie-up with Marks&Spencer had been met with open arms (and wallets) by its customers.

"What company manages a 52 per cent increase in revenue during a global pandemic, and increases its basket size per customer to boot?," Midas said.

Midas also cited analysts at The Share Centre, who in turn highlighted the potential of the firm's services arm, which partners with grocers in the US and France, giving them access to its expertise in online delivery.



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