Member Info for Valueplay

Norrab1,

Where do you think the Ocado share price is heading?

Best of luck on your travels casapinos. If you can make good profits trading volatile Ocado shares then you've done well. Personally I believe it will be back to sub 650p in the near future...

Online grocery delivery is currently a declining trend in the US and has been for many months...

https://www.supermarketnews.com/online-retail/us-online-grocery-sales-decline-over-3-october

Shrinkage costs are one of the savings for the online grocery model. Of course on the flip side many costs of online grocery have ramped up recently. Build costs of CFCs, extra fuel costs, dry ice, deliver driver costs etc.

"More of the benefits of and reasons why the next decade will see near- universal adoption of food delivery."

I believe online grocery will be near universally available over the next decade however it will not be universally adopted in that time. Cost pressures leading consumers to chose to continue to visit stores to access cheaper groceries...

Currently re Kroger it is unclear how they will develop their online grocery sales. They have large contracts with Instacart and Shipt. Also they have a contract with Ocado. Kroger could vastly expand the Ocado contract. They could though chose to expand with Instacart/Shipt and increase online grocery sales via using more of their grocery store estate. There are signs around that consumers are breaking away from the big weekly, instead to smaller shops from various sources, this may push Kroger to rethink their online strategy. The increasing cost of building and running Ocado CFCs may cause them to pause committing to more in the future and increase the lower cost contracts with Instacart/Shipt

Bank of Japan news leading the market down today. It's a stock market to be avoided currently imo. Ocado highly vulnerable in these recessionary, inflationary times...

Agreed Casapinos. Kroger do not split out or give details in their Ocado CFC trade volumes. Also as you say I don't believe they split out their online grocery trade figures. This is why I asked Blekit the question for the info. He said Kroger are posting great results however we do not know how the Ocado powered Kroger CFCs are trading in the US. Of course Kroger will say they are doing very well etc. Of course they would. As 5% shareholders in Ocado I wouldn't expect them to say anything else. This is why Ocado retail UK quarterly trading figures are so interesting. They are the only historical trading figures regarding Ocado CFCs available anywhere on the planet. They give an unique insight into treading trends within the Ocado CFC framework.

As to your online sales thought experiment casapinos. You are missing some crucial points. Firstly that Kroger has many different online delivery providers. Instacart and Shipt being 2 of the biggest. There are no figures available but at an educated guess I would say that the majority of Kroger's online sales are not currently processed through an Ocado CFC.

I agree with you that 11 CFCs are committed to by Kroger and they are looking for sites for 3 more. The cfc rollout looks to be proceeding well. The big issues are yet to come though. The Ocado Kroger contract is thought to be for 20 CFCs minimum. Currently the rollout has been going to plan but this is to be expected as Kroger are committed contractually to around 20cfcs. Any commitment to above 20cfcs is the interesting part...

blekit,

Can you supply sales figures showing the historical sales Kroger are making through their Ocado CFCs? Kroger uses many different online partners / strategies.

blekit,

Absolutely the Solutions side of the business is far more important than the retail side for Ocado group. Until this past year Ocado retail sales have been ticking along nicely. The retail side of the business is currently flashing some warning signs though. It is making losses, as you have now found out, and is losing overall market share, as also you have now found out. The trend within Ocado retail points to a possibility of these trends being replicated in this global downturn across other Ocado Solutions contract geographies. Extended reduction in basket sizes with customers seeking out cheaper lower margin products greatly crimps the profits for Ocado Solutions. The trend may reverse but it creates added financial pressures on Ocado group just as the cost of financing are steeply rising and costs across the rest of business are steeply increasing....

Chilting

"I can appreciate your reasons for selling Valueplay or at least selling part of your holding, it does seem rather extreme to sell all your holding. Personally I would have taken my capital and just left some profit."

Thankfully I do not have your trading style Chilting. The above would have greatly depleted my profits...

Billy,

You've posted a few months ago that you believe Ocado shares will bounce back to £28. What's your reasoning behind this? The share has dropped but you continue to hold, why?

The biggest 2 investors in Ocado - Jorn Rausing and London Amsterdam Trust - still hold roughly the amount of shares they have done in Ocado for the last 4 years. Why did they not sell at £29? They have millions at their disposal to gain insight yet have held on to the shares til today.

Personally speaking the key to my trading is that I make more profits than losses. This creates opportunities for further trades and grows the portfolio.

In a nutshell I buy an asset when, through research, I deem the price to be most attractive. That there is far greater potential for a share price rise than a fall. I sell when the opposite is true.

Hindsight is beautiful. Key is to keep those profits exceeding losses. Losses lead to funds decrease and reduced chances of taking part in share purchase opportunities in the future. Much better to invest in tracker funds or put cash in the bank than make losses in stock investing. Tough decisions often need to be made. I do not hold onto shares merely hoping they will reverse their fall at some point if my research tells me there are further falls to come...

I am not a genius OWLS and have never professed to be one. I made 200% plus on my Ocado investment. Happy with that. Perfect timing is impossible. Profits are what tradings about. Keep making them and the balance sheet ticks over..

Over the past 30 years there have been many periods where I have avoided the stock market. More often than not they have been the correct calls. I've carried the profits forward each time...

blekit,

The Ocado retail side, which you completely misunderstand by believing it is not loss making and not losing market share, is the most evolved Ocado Solutions network of CFCs on the planet. The issues faced within Ocado retail point strongly to the probability of those issues occuring in other countries during the globally depressed times. Smaller basket sizes, customers trading down to cheaper grocery lines heavily impacts the Ocado online grocery model which is built around fully optimized CFCs and delivering large baskets of goods.

Selling out in May was obviously a good move. Costs have expanded exponentially since then in every facet of the business - share price has slumped. You obviously see better times ahead. What are your share price expectations going forward?

SFH,

Yes I was very positive in April re Ocado. Yes in May I sold my holding. My new research at the time led me to believe the macroeconomic environment was turning sharply against Ocado and would continue to do so, heavily impacting the share price. Readjusting my finances, managing the flow of capital, was my focus at the time rather than posting on chat boards.

Chat boards are there for all to discuss, listen, learn etc. No member is under any obligation to post at any time.

I understand that others don't like that I sold my holding however we all have to make the choices that are right for ourselves. Personally I am very happy that I reacted on the basis of my research rather than holding on merely hoping for better times....

Where do you think the Ocado share price is heading?

Blekit,

The period of share growth you are referring to re Ocado was lucrative but is in the past. I do hope you have now done homework and now realise that Ocado retail is currently incurring losses and that Ocado retail is losing overall market, despite spending tens of millions on new CFCs this year (see latest Kantar figures)

Personally I believe Ocado shares will be below 650p before long... Not a time to be holding or buying..

"Clearly putting your savings in cash will result in a decline in savings when interest rates are lower than inflation."

Agreed. Worse though to remain invested in falling stocks with a thinking of

"my strategy is simply to hold in bad times"

Then the cash losses are greatly compounded...

Any experienced, successful investor will tell you that the very worst place to be in inflationary times is in a declining stock market. Double whammy of share price decline and inflation erodes cash at a very rapid rate. Shelter cash from the stock market fall, earn interest on the cash, reinvest when bombed out stock opportunities present themselves...

With experience and diligent research you can time the market. You may as well just buy a tracker fund if you haven't the expertise necessary to read the macroeconomic outlook.

Renewed indications from the Fed today that more rate rises are on the way. Cash a great place to be currently...

Good for you OWLS. OCDO is just one of my main areas of interest. Selling and going into cash on the UK side of my portfolio has enabled me to avoid much of the market downturn whilst generating some interest on the cash. A far better return than the one I would have had if I were fully invested. There are times when the stock market isn't the place to be imo...

Alcampo, yes a one cfc deal I omitted. So that's 2 small, one large deal in the busiest 3 year period of online grocery growth there has ever been? To me that's underperforming, you think otherwise, great. Casino deal was v minor, no new CFCs planned.

The fundamentals of the company, its profitability and its future potential for growth have been massively hit by the macroeconomic storm. For you it looks as though you believe Ocado will ride things out just fine. Personally I am of the opposite view.

That's what discussion boards are about. Putting forward opinions, reading counterarguments etc..