Member Info for chilting

Clearly the macro is against Ocado and its customers at all levels at the moment but this is now priced into the SP - investors know all the problems underlined by Finch and the downgrade is obvious.

Unless the economic conditions get a lot worst we have probably seen the low point for the SP, and can now anticipate a slow recovery with the widely anticipated placing now completed.

So, OCDO is a hold for existing investors and a strong buy for new investors as soon as we start to see an economic recovery.

High volume this morning, just loosing yesterdays gain - now the air has cleared the SP should start to reverse the losses of the past months if the macro allows.

"Steering the ship or holding on for his life."
He is trying to do both in a Force 10 storm - lets hope the macro wind eases soon!

These so called pay revolts by shareholders have more to do with the current share price of the business than opposition to boardroom earnings - they should to be seen is this context.

The lack of clarity over the detail regarding the windfall tax certainly isn't helping anyone and far from encouraging investment has put investment decisions on hold and depressed share prices.

In my view is simply underlines the incompetence of the Government, who make a decision and work out the detail later and if it doesn't work, fudge it or shelve it.

So, I would say that the lack of detail regarding the windfall tax is simply because there are no detailed plans.

The problem this time is that if they drop the windfall tax it will be seen as a massive U turn and if they go ahead it will damage the industry - a fudge will please no one, but that's probably what will happen.

Neil
As you say, no way that Shoreham would close - probably in their top 30 stores in the country with a very busy Tesco attached. Also attracts business from Brighton where parking is awful.

But, I reckon their would be more of an outcry if they tried to shut Worthing than their would Shoreham and M&S realise that, so it will probably stay. The main attribute of Worthing is its fantastic range of cafes and restaurants and also easy parking compared to Brighton.

Thinking more about the old Worthing store, I do wonder if M&S would close it even if it wasn't profitable.

The point being that Worthing has such a high proportion of elderly - more over 65's than under 17's - that the ensuing uproar would do the M&S brand considerable damage.

This article gives info about the Worthing store in the 1940's - it actually dates from the early 1900's - all in the same building.

https://www.sussexexpress.co.uk/heritage-and-retro/retro/worthing-store-history-reveals-itself-two-employees-sent-to-war-2228544

AJP
Yes, its certainly the case that itaconix has taken action to mitigate supply chain problems but it seems that not all suppliers have taken the same action and Revlon are now paying the price.

Hopefully though it will be a problem that starts to resolve itself over the coming months.
One hopeful sign is that shipping rates are starting to fall, so maybe supply problems are easing.

Neil
Its seems that M&S consider which stores to close on a store by store basis.
The store in Worthing dates from the early 20th Century and certainly fits your description, but apparently it is still trading profitably, even though there is a larger modern out of town store less than 5 miles away at Shoreham.

Well timed for the World Cup in November.

Also for those that don't know the Picard feature on Ocado Retail - very good French brand - notable for high quality and absence on nasty food additive's.

Its the supply chain issue that is certainly causing problems for all companies in the sector and the fact that its pushed Revlon into bankruptcy protection underlines the scale of the problem.

It must be incredibly frustrating when ITX's customers are manufacturing their products and they cannot source a component ingredient.

Presumably that means that they then cancel their order with Itaconix or ask for a later delivery date.

This issue was certainly relevant for last years numbers but hopefully as supply chains return to normal we will see a resolution - especially on products sourced from China as their Covid outbreaks are contained.

The time to do it will be when the market turns and starts to surge upwards.

I would say that there is absolutely no correlation between the price of food and its nutritional value.
With just a little knowledge and the commitment its perfectly easy to provide a nutritional meal for less than £1 a head.
For example a slow cooked beef stew with carrots, onions, pulses, potatoes with a side of green cabbage.

Current economic policy centred around raising interest rates is targeted at reducing inflation, particularly high energy prices - the idea is to cut demand by creating a shallow recession - so don't assume that Brent will hold anything like the level its at now.

Investors will quickly dump oil stocks when they see a way out the bear market to take full advantage of the bounce.

I am a typical M&S/Ocado shopper and wouldn't be seen dead in Lidl - or Tesco's for that matter.

Also in a perverse way high utility bills are just what we need now to reduce consumption, combat climate change and make the push to renewables - so something good may come out of this little recession that we seem to be heading towards.

But don't assume that all consumers will change their habits - most will just spend more to maintain their standard of living - they may however turn the heating down a few degrees.

The good thing in this economic cycle is that there is plenty of leeway to raise interest rates.
They can go a lot higher yet, if necessary, to control inflation.

Sure, that will cause short term pain but investors will see plenty of green shoots when things start to improve, that will give us a very strong rally in share prices at some stage.

To me its not the individual actions, like interest rate rises, that are the key, its that point when market sentiment turns positive and that could even be when inflation is at its peak.

Tarmak
The problem is that investors will accept the Barclays calculations as accurate or might even be accurate because of their respected status.
The reality as you say is different, but the world needs to hear that from Enquest today - an English saying is it needs to "hear it from the horses mouth."

From an outsiders point of view, you really do urgently need compelling answers from the board today refuting Barclays assumptions.
Right or wrong, its the Barclays view that is holding sway with the market and depressing the SP - it will continue to drift down without clarity from Enquest.

mrc
The Barclays analyst did give his reasons why they downgraded - its no big mystery.

"The recommendation went from 'neutral' to 'underweight' with the analysts estimating the tax would reduce the outfit's free cash flow across 2023-26 by $450m.
That equated to a 36% cut to the company's discounted cash flow valuation and put Enquest's debt refinancing plans back in focus "just as higher oil prices and improved operating performance had eased concerns."
In turn, the analysts lowered their target price for the shares from 40.0p to 23.0p."

I think that ITX is performing OK in the very difficult market conditions.
As long as it holds above 4p that's about all we can expect until the macro improves.

The news from Revlon underlines the problems faced by many businesses in all sectors.

In my view a period of recession is now needed to control inflation, allow the supply chain to recover from Covid and to bring energy and other commodity prices under control.