Member Info for Boyobach

A correction there: The move to Luton at 346000 sq ft from Hatfield at 1.2m sq ft, represented just over 70% reduction in warehouse area - rather more than the 60% I stated.

VP makes the reasonable point that ‘Over the last year Ocado Solutions has received no new automated CFC orders.’ although this appears to overlook the McKesson deal in Canada. However that observation needs to be assessed in terms of what OCDO’s primary objectives are and how much resource it is able to deploy to service existing contracts and manage its own retail infrastructure. In other words, perhaps it already has its hands full and has to target resources and sales activity accordingly. TS seemed to say as much in the FY statement, in which he said [edited by me]:

‘In the current year, we expect to help put our partners well on the path to generating attractive returns…. a key deliverable to drive orders for more capacity in their existing sites and additional future sites. This is, for now, the primary focus of the business.’

So, the primary focus recently has not been sales. And, obviously during 2023, they set themselves the task of reducing their warehouse sq footage at Hatfield by the transfer to Luton, resulting in a 60% reduction in sq footage. Expansion of the JV model in the UK may well be required, depending on what the Retail strategy there continues to be - and it’ll be interesting to see what M&S may have to say about that in the coming week.

I’m not saying that the lack of orders is a good thing, I’m just saying that OCDO cannot necessarily be measured by CFC sales alone: it’s not like a shipbuilder, for example, where items are built and delivered and that’s the end of the story.

This is a business based on the ongoing support and tech development of installed infrastructure - expansion of that infrastructure needs to be kept within manageable limits as failure to support it properly would be very damaging.

'This rise towards close is suggestive of a further move to the upside next week......'

It’s a casino, Stupmy. Did today’s rise in the afternoon really change the LT picture?

https://invst.ly/14wmqb (daily chart)

I would say not.

On balance, with the prevailing trends all negative, shorts increasing and 342 (the last obvious support) looking likely to come under pressure again, I decided to lock in profits this afternoon, exit and observe rather than stay in over the weekend for no sound and logical reason.

Well there was a twist in the tale there: https://invst.ly/14wm7o

Can't wait for the next episode - will it start with a pump or a dump?

Another trend killed off but the main villain still untouched.

OCDO's identity crisis is a problem of its own , or rather, T Steiner's making. A smarter outfit would have made it work through clearer branding

As an example, when BT launched itself as a TV channel it immediately became a competitor with companies that used its services. OCDO is not dissimilar in that regard. It can work but it can also create conflicts that need to be managed.

Well the larger volume dump happened as if ‘on cue’ about 30 minutes after my post and just as the blue EMA was about to cross red and signal ‘buy’ - funny that eh? https://invst.ly/14wipm

I think we know where it’s heading from here.

Although this week’s party appears to be over (grey marks the dead trend here: https://invst.ly/14wevm ) there’s potentially a tussle to hold 358.

In June last year news broke that the 20% OCDO backed kitchen robotics startup Karakuri was heading into administration. Didn't OCDO already have enough tech pet projects on the go without adding an unnecessary robot chef? But that was only a mere £4.75m. More importantly, negative news had already been building about M&S dissatisfaction with the JV . However, the eventual settlement with AS and timely but ultimately meaningless rumours regarding a potential AMZ TO came to the rescue .

This year OCDO needs to show tangible and sustained progress in all segments of the business - jam tomorrow and wild TO rumours won’t shake off the shorters this time around.

Meanwhile, OCDO don't dispute that the critical JV target was missed whilst M&S do not appear to have accepted that any formal agreement was reached with them about making changes to fix problems and revise that target. Market assumption will therefore be that the full amount is likely to be forfeited, it will just be a bonus if it isn't. The poor public handling of the JV relationship and the apparently sloppy contract terms have not harmed M&S to the same degree as OCDO which, depending on the outcome, might suggest which company has the more savvy and effective oversight of contracts at board level.

It’s not too hard to figure out why.

When a significant downward trend meets a support level then one of them must break. It doesn’t take a genius to see what to watch for here over the next three weeks: https://invst.ly/14w0k3

Red, on this daily chart, goes back to mid January and the sp has only gone over it very briefly on three occasions. With a few brief and recent exceptions, the orange support line hasn’t been breached since 2017. Funds that are currently short in OCDO clearly anticipate that the 340 support will be broken at some point, with this red representing the first of two obvious trend related risks at that level, the second is destined to reach 340 around October unless OCDO breaks it in the meantime: https://invst.ly/14w0lw

Very wise Sangi. Are you totally out or have you held a core amount?

I've reduced to a relatively small core. For LTH's and shorters alike the situation has not materially changed in five weeks: https://invst.ly/14vtua

I’m not sure I’d agree about that bullish interpretation JWB. My understanding is that, during a downtrend, the hammer is a signal that the fall may be ending. However, If the pattern appears after a rally (like today) I believe it is called a hanging man and indicates that the upward move may be ending. https://invst.ly/14vfr4 (Daily view).

It was already a down day compared to yesterday’s close when the 1.75m closing auction took the closing sp even lower: https://invst.ly/14vcyz Although the sp almost challenged the four week 15’ trend during the day it failed and was actually in retreat from both the trend and yesterday’s highest position at the close. The fact that we saw a pullback below 350 (mid trend) during the day was not encouraging either. Sorry, but I don’t see today's price moves as a bullish follow-up to yesterday’s attempted breakout . However, tomorrow should reveal the direction of the next phase.

Quite an eventful day today with some chart perspectives worth picking over. Firstly this four week 15’ chart shows a significant downtrend that isn’t so obvious in a daily version because there’s been a lot of key action intraday recently: https://invst.ly/14ur22 .Following yesterday’s activity it was indicating a potential break below the 340 support and I decided to de-risk and take some profits if the opportunity arose. When OCDO broke upwards today, I took that opportunity and here’s a closer look at how the day went: https://invst.ly/14uq-x Volumes are at the bottom and, as can be seen, the closing auction demand (the last green block) was not as ‘insane’ as some may think. Ultimately, the sp did not finish above the trend, so it remains to be seen if today’s trading rally continues into tomorrow or if the sp submits to the falling trend. And to put that into perspective, it’s important to note that OCDO didn’t quite make contact with its first long-term challenger shown in this daily chart: https://invst.ly/14ura5 . The red trend there is the first of two that will determine whether OCDO is possibly on the road to freedom.

So far, today's unexpectedly good move doesn't actually change the chart position in terms of the overall downward trend for the last four weeks https://invst.ly/14um-a . If it goes much further then that could become significant.

I consequently reduced my exposure by 60% and took profits as it approached 370. I'm comfortable to watch this play out in either direction from here.

Although there had been signs of a levelling out in OCDO’s sp since the sharp fall during April, this 15’ view shows that price moves over the last week are presenting a less optimistic picture: https://invst.ly/14uj39 as pressure on the current support level has been renewed this week.

If Millennium had been at 0.49% or less prior to Friday they would have registered as zero until then. Don't read too much into it. There's probably loads of shorts just under the radar.

They don't track below 0.5%, so anything below that registers as 0%

D1 increased on the 3rd , 7th and 10th : see the 'Previous Disclosures' list: https://shorttracker.co.uk/company/GB00B3MBS747/

Perhaps surprisingly, 342 ultimately survived intact despite a fairly intense and slightly above average volume day: https://invst.ly/14u2tk

I guess I wasn’t alone in profitably recycling a few shares driven down by the shorts in the morning and then topping back up again at the same price just before 4pm - thanks guys!

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

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.

VP: New fundraising to occur quicker than most believe imo.

It's certainly a key point in respect of sp. Which aspects of OCDO’s current projections and guidance lead you to that conclusion? Has an analyst expressed that view or are you suggesting that the company’s guidance is misleadingly optimistic or incorrect in your view?