Member Info for chilting

Most investors get hot under the collar about their shares performance but what actually drives the SP.

Is it the companies performance, the macro or are there other reasons.

Comparing comparing companies listed on AIM to those listed on the FTSE250 the most obvious difference is that the AIM companies constantly need more funding, therefore, it has to be concluded that dilution is the main factor that drives the SP on AIM.

This is endorsed when looking at the stats since both markets were formed in October 1996.

The FTSE250 is up 318%.

The AIM index is down -24.26% - in actual fact it has been virtually flat all that time.

Shorts will have their short hedged by a long position - that was what caused the big spike on day one of the rumours and is the reason why they are currently not closing.

Valuing OCDO on a day to day basis, for the future and for takeover is next to impossible - hence the volatility in the SP over the last five years.

So trying to read what is happening to the SP currently and why, is also likely to mislead investors.

With the return of dividends, 222p becomes much more attainable but macro has to also improve bringing the FTSE back to 8,000.

The Amazon rumour was probably kicked off by Ocado hiring the Amazon Executive - the timescale was about right and the news simply leaked that he was taking the job.

There have always been rumours circulating that Amazon are interested in acquiring Ocado, even after the Kroger partnership.

Not complaining though, it seems to have revitalised the SP and dragged the institutional buyers back in after they were maybe concerned that Ocado would drop out the FTSE100 - that danger seems to have passed.

Maybe a bit overbought now, may fall back and tread water at around 190p until the Autumn before moving over 200p.

More likely FTSE100 in 2024.

The formulation of the Ceres Bosch Weichai partnership made any takeover of Ceres very unlikely - Weichai hold 19.74% of Ceres and Bosch 17.59%.

Ocado investors and watchers need to be far more focused on the development of CFC's for Kroger in the US and for other solutions partners around the world rather than navel gazing at Ocado Retail.

The problem is that most investors have little concept of how a growth company invests profits for long term growth as Ocado have always done.

It was blindingly obvious that this was going to happen at some stage.

Pure speculation.

With Kroger being Ocado's main solutions partner there was no way that Amazon could take over Ocado without substantially damaging the value of Ocado. Kroger are also one of Ocado's biggest shareholders.

The difference between M&S and Waitrose is simply the M&S brand.

M&S products deliver on quality and M&S customers will pay the extra for quality.

Waitrose have simply lost their way, their latest TV ad is uninspiring, demonstrating that they have simply run out of ideas. Their products are no different than the big four.

What surprised me was that Sharon White got a full vote of confidence from the workforce - she certainly didn't deserve it.

CWR is up and down like a moody teenager.

The move up to the adult world tomorrow will be a coming of age, full of opportunity and prosperity.

Nice to see the SP gaining traction today on a flat day for the market.

A nice steady increase in the SP is what we want to see now, in the next few months or so - towards £40.

In practice I think it makes little difference when Ceres is actually listed as a FTSE250 company.

Its the fact that it will be in the main market and eligible that maters - tracker funds will still purchase the shares.

Before the rumours I certainly think that the shorts had pushed the SP down below market value, but there was little interest from buyers to lift the SP from the doldrums.

That has all changed now and I have to conclude that it probably was all rumours?

The situation at the moment seems to be that the shorts had to purchase a lot of shares long, to cover their positions.

So I guess its largely up to them what happens now.

Personally after the dust settles, I think its likely that they will attempt to sell their long positions first to depress the SP back towards the level of their short, but this could take a while to unravel and anything could happen in the meantime.

Three important financial benefits that the Ocado Retail partnership brings to M&S are hidden in the accounts.

Firstly - the profit on M&S branded products sold via Ocado Retail.

Secondly - being able to increase the range of M&S products with the increased demand created by instore plus online sales.

Thirdly - more volume ordered from suppliers resulting in better prices and more efficient usage of logistics.

I think its true to say that the partnership has transformed the M&S food business and therefore its very important that M&S do acquire the other the other 50% of Ocado Retail and rebrand it, so that they can increase their dominance of the high end of the UK Grocery sector.

Assuming yesterdays rise was just rumours it will still take a while for OCDO's SP to stabilise.

The reported shorts actually increased on Wednesday and its likely that they still hold their positions and didn't cash out.

My guess is that a large percentage of yesterdays buys were these shorts hedging their shorts with a long position - hence the big rise.

What they do next will depend on news flow.

Rather than rushing to close their positions it could be that some of the buying today has been the shorts hedging their positions.

Excellent news from Italia and from the comments here it looks like yesterdays AGM was positive.

Assuming continued good news flow, there is plenty to come, its blindingly obvious that we should see the SP recover now.

Certainly a good time to buy a good amount of stock for very little money at a heafty discount to long term value.

As the agreement stands M&S have the sole option to buy the other 50% right up to 2030.

Also Ocado cannot sell the other 50% without the agreement of M&S up to 2030.

I would certainly assume that that would remain unchanged regardless of ownership.

Kintbury were sitting on a £635m profit this morning with a start price of 527p - in loss at the moment

They had the highest start price.

Stumpy

Luckily I am in a position where I can just observe.

Personally I hope there isn't a successful bid - still content to retain my holding for the long term.