Member Info for Valueplay

Pfen,

The Ocado JV is good for both MKS and Ocado. It is the markets reevaluation of the non Ocado JV side of MKS that has restricted share price improvement for MKS

Trojanhorse,

Big and profitable does not necessarily translate into a big share price. In the past MKS was a huge success story. You just have to look at the 5 year share graph to see how things have gone lately.

Aimigo,

The market values the non Ocado JV side of MKS in the region of £0.5-0.7bill. I agree with that valuation. I see far better value plays currently. On the Ocado board in early July chilting, others and myself were comparing Ocado and MKS as investments. We took the share price on July 5 and agreed to revisit their share prices in late October. The share prices then were £1.00 for MKS and £20.00 for Ocado. Since then Ocado has returned 42%, MKS has returned 3%. Ocado is still great value.

There are big investors long on MKS but there are big positions short too. The share price has not been missed by the big hedge funds. It is at its current value for many reasons. Chiefly the anticipated hit to store values, Christmas sales, footfall and declining non food value of MKS

Look at my previous post, MKS is valued at 1.99bill currently, Ocado retail I said max 1.4bill.

All our opinions don't mean much, share price says the truth.

You are very far from the reality there Aimigo

The store turnaround programme is very costly and likely to be a lot more so as shopping habits change. On the store side MKS's profits are being reduced greatly. This creates a big pressure on MKS's finances.

MKS have the bedrock of the Ocado deal which is a good one. The turnaround for the rest of the business is a long, bumpy road.

Amazon compete with every retailer. MKS store sales this year will be hit very hard

Market conditions perfect for Ocado currently.

Lockdown is positive for Sainsburys, Tesco, morrison. Reduced pub/ restaurant opening creates more trade for supermarket. Work from home = more food bought from supermarket.

Increased virus rates increase the global online grocery market which helps Ocado sell it's market leading online grocery solutions. Over 90% of Ocado's value is derived from this technology, not it's retail side

Increased virus rates not good for MKS as most of their stores are not big enough to do a weekly good shop. If there's a lockdown people usually venture out only once for food. Ocado retail is at its capacity limit until the end of the year. Amazon likely to take a lot of MKS's Christmas store trade. MKS's aged store network likely to result in significant value writedowns

Oh dear, clearly the oracle's prophetic predictions have been found out.

OWLS, you have a long memory, thanks for reminding us.

Can't see Kroger buying out Ocado or MKS.

More likely scenario Amazon/Uber/another US tech giant buys out Ocado.

Overall I believe a takeover unlikely currently. There are a host of companies who would love to own Ocado though.

Certainly Ocado retails slots will be filled up faster and faster however Ocado retail is already almost at full capacity and the CFO admitted in the trading statement presentation that capacity will only be raised slightly by year end.

Kroger holds around 5% of Ocado. It is possible they'd consider a takeover but it would be hugely costly for them. I think less news from Ocado solutions is re making sure all partners are happy and ramping up their offerings. Also getting ready to onboard new partners who would be queuing up to join.

There haven't been any RNS releases re stake building. I think Ocado's share price rise is more to do with the huge growth worldwide of the online grocery market and the increased opportunities that gives the company.

The long term outlook for the non Ocado JV side of MKS is bleak and becoming increasingly so. There will be huge costs arising from erosion of store values and the reorganisation of the store estate to be fit for the new world of retail we are now in.

It's a given that all Ocado solutions current international partners will be wanting to expand their relationship with Ocado as fast as possible. Sticking point is Ocado's capacity. The £1 bill recently fund raised will filter through to their operations soon.

New partners should not be far off and further diversification outside grocery on the horizon. Ocado is firmly in a market sweet spot and should continue to appreciate in value over the winter. Ocado's future will be fully priced into the share price further down the line. I do not see we are there yet though.

The market very much looks long term. It sees a big profit hit from the current ongoing covid case rises and ongoing devaluation of the non Ocado JV side of MKS.

Yes, it's going to be a long, hard winter. Ocado are well positioned to capitalize and grow in these market conditions.

Fair enough. I see far more risk here than you are factoring in. Let's see how it plays out......

Interest rates set to be extremely low for 3 years(excellent as Ocado will need to raise further funds if more deals are struck). Multiple local lockdowns and now a very probable national lockdown incoming in the UK. Covid cases rising across Europe. Ocado retail is almost at the limit of its capacity but many issues are making the public/press/investors/grocers worldwide turn towards Ocado. The larger the online delivery worldwide market grows the larger the potential rewards for Ocado solutions. The need is now and Ocado solutions are at the top of their game with an industry leading profitable solution.

Further rises likely if market conditions are calm. It's been a while since Ocado raised the £1 bill financing. Multiple lucrative options must be on their table currently.

A long way yet before any corners are turned. Management are behind the curve. Rising covid cases, multiple local lockdowns, very probable national lockdown will hit store footfall extremely hard.

Thanks TexasWalker. Doubters are falling away. Anything could be around the corner for Ocado but I believe strongly that they will be opportunities not obstacles currently....