Gone long on OCDO OCADO yes very controversial but check the short position now just over 7% from far greater heights. Also talk of a new customer for its Tech IT and warehouse operation. That plus the other new one.
Peel Hunt suggest OCDO in a good position to bag a licencing deal with the US . perhaps even a bidding war .this is a huge market and Walmart and Kroger are way behind the curve . source of story telegraph business
When is the penny going to drop....you can't make money out of home deliveries on Food/Groceries. Yes I hear the cry go up that Ocado is now a Tech organisation but why should retailers buy a product from which they will not be able to make a meaningful margin....perhaps someone can explain¬
Shares in Ocado fell more than 8% to 450.8p in early trade on Tuesday.
With Ocado lossmaking, burning cash and net debt mounting again, analyst Clive Black at Shore Capital did not hold back his scepticism about the 5% placing "after two and half rescues already" and said "to all intents and purposes the prospect for FY2018 look like a profit warning to us".
"We believe that Ocado is being cute today, but cuteness gets one places. Why didn't it indicate to the market the need to raise cash with say the Casino or Sobey's announcements? Take a look at some of the market downgrades for FY2018 which emerge today and ask what has changed since the Casino and Sobey's announcements? Hence, to what extent is Ocado using the noise of its preliminary results to mask a FY2018 profit warning and engage in a placing that we imagine is probably covered?"
After Steiner's name appeared on the guest list of the Presidents Club, the men-only fundraising ball that sparked a furore in the City over allegations of inappropriate behaviour, Black said "the rest of the leaders of the grocery retail trade must wonder why their shares remain in the doldrums despite delivering pre-tax profits, in some cases margin and dividend growth, and yet the business that delivered flat EBITDA progression and a pre-tax loss again from a small profit year-on-year, sustains a stratospheric stock rating and the boss seemingly has to the time to have a night out in Dorchester rather than chips in Swanage".
I'm sure these guys just follow the trend. For me Ocado is a sell at this price. Food retail on the up but it is a benign market with no food war and more entrants to the online market (who may or may not use OCDO's system).
Annoyingly they have not split the retail and tech income this last update and there are no figures as to what the newest hookup in Canada will bring in except it will not be anything for 2018 except a £15m bill.
With a massive P/E ratio, small profit, huge rise on the back of good (if unclear) news coupled with the shorts having to sell into the market, the price is looking very toppy.
They would be better to decide if they are a food co. or a tech co. A split into two parts would make it easier to value.
This stock is very closely held, the top ten holders having over 50%. There has also been the suggestion that when the shorters have previously sold borrowed stock into the market, some of that liquidity has been repurchased by the lenders or their associates. So they now effectively hold the same stock twice (are you still with me?)
If this is indeed the case then the shorters problems are considerably increased, when they find that their is insufficient stock available in the market, through leverage, for them to purchase and repay when requested to do so. Now that is what I call a squeeze, and the price we private holders are offered, riding on the coat tails, could be considerable.
Its possible the above scenario is fantasy, but I have read this in print somewhere, with specific reference to closely held Ocado, so it is not a figment of my imagination.
short squeeze of all time was when porche tried to buy VW. it did it buy instructing banks to quietly/ individually buy 2.99% of VW stock when the price was around 100 a share. When they declared how much stock they had bought the price nearly hit 1000 a share. Hedgers were reportedly running off golf courses to close their positions whilst they could-brilliant!
Is the £3 billion online grocery/technology stock Ocado (OCDO) to be squeezed even higher as short sellers feel pain? This week has brought news of a second international technology/warehousing deal - with Canada's second-largest retailer after a major French retailer only seven weeks ago. These deals have inflated Ocado shares well over two-thirds in market value, to 525p.
Before the Canadian deal, Ocado was the third-largest short on the London market, with 13.5% of issued shares loaned out, thus now putting hedge funds in a dilemma whether to nurse losses, increase their shorts or close out.
It has wider relevance beyond Ocado, ie how much notice should you take of accumulated short positions and when? The collapse of Carillion (CLLN) is now proclaimed obvious in hindsight, with 14.0% of its equity having been loaned out, making it the second most-shorted stock. Debenhams (DEB) at number one is having a sore time, too, its market value halving in the last six months.
good points paul.....was listening to an analyst last week who said that OCDO need Amazon to be successful because this will put pressure on retailers to up their online game which is what OCDO need to happen .also he made the point that OCDO are taking cost out of retailing whilst home delivery via a store pick system is adding to cost .as you point out the technical side of what we do is has to be spot on
Hoping for a chain reaction globally to the recent Casino deal, and going forward, with luck it won't much matter whether Amazon or Ocado gain the business of the first mover in any International market as the other should pick up the responder. All assuming that the engineers are now stopping the bots within a centimetre tolerance at Andover, I have said for months (elsewhere) that they may be struggling, and now we hear that they have been. Can only assume all resolved as Casino have joined Morrisons in an endorsement of OSP.
depends on the skill of the analysts ......if they follow retail then they are a sell.....if they follow technology then they might see them a buy .I've checked the brokers views and 3 are bearish and 4 are bullish so who knows what they're worth? but shorters have a whacking this time so caution is needed now when having a go at Ocdo
ICA ,Nordic region retailer may be about to sign in with OCDO ,according to the telegraph .we'll see about that but it must be said that hedge funds rushed to close short positions on the rumour hence the squeeze .also credit Suisse says they have outperform rating on OCDO .
I would guess Ocado is now the most heavily shorted share in the FTSE, as former leader Carillion has crashed 45% in the last 26 hours, so many of the vultures will have closed their shorts and taken their money.
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