Ocado - Lets Discuss!

[MayZerG]

This company is apparently the biggest UK online-only grocer, Goldman Sachs recently recommended a buy and its share price has shot up massively.

However they are still in negative earnings but only slightly, i guess they are reinvesting in the company because they are relatively new.

Has partnerships with Waitrose, and also in talks with Morrison to license some of its web-shopping technology.

What are peoples thoughts? What makes this company unique rather than just doing online shopping with Tesco's Direct for example? Or Any of the supermarket chains?

 

[malaguti]

This company is apparently the biggest UK online-only grocer, Goldman Sachs recently recommended a buy and its share price has shot up massively.

However they are still in negative earnings but only slightly, i guess they are reinvesting in the company because they are relatively new.

Has partnerships with Waitrose, and also in talks with Morrison to license some of its web-shopping technology.

What are peoples thoughts? What makes this company unique rather than just doing online shopping with Tesco's Direct for example? Or Any of the supermarket chains?

the entry would have been the break of the last high 180ish, would want another pullback now and retest that support.

 

[cr6196]

This company is apparently the biggest UK online-only grocer, Goldman Sachs recently recommended a buy and its share price has shot up massively.

However they are still in negative earnings but only slightly, i guess they are reinvesting in the company because they are relatively new.

Has partnerships with Waitrose, and also in talks with Morrison to license some of its web-shopping technology.

What are peoples thoughts? What makes this company unique rather than just doing online shopping with Tesco's Direct for example? Or Any of the supermarket chains?

I rarely come on here anymore but a few things...first, the relationship between GS and Ocado is very close, the guys who founded Ocado are from there and GS ran the equity raise.

Second, Waitrose is may pursue legal action, unsurprisingly, as a result of the tie-up with Morrisons.

Third, Rose just came in as Chairman. Highly illustrious figure but in interviews he comes across as an arrogant *******, his argument seems to be that everyone else in the industry is lazy, short-sellers are stupid, and Ocado is hopping onto a secular trend to the moon.

These points are all wrong, imo. It is true that it is hard to cannibalize your original business but it is also true that other supermarkets have capacity they can transfer over, I would argue they are further ahead (one thing you often hear mentioned is that Ocado has these brilliant automated devices for their warehouses, as if Tesco isn't aware of this or can't afford them). On the second point, short-sellers have been right until the start of this year. On the third point, I would reiterate that other companies have capacity and that this deal with Morrisons is not an unalloyed good (ironically, it may end up cannibalizing business with Waitrose).

Just my 2 cents...there are better ideas out there...in imo, Tesco will outperform Ocado over the next few years...although given how small Ocado is relative to the market that is basically saying they are going to go out of business.

 

[MalcolmSm1th]

I've looked at Ocado a few years ago and I didn't like the numbers then. I've just looked at some of the data that I can find and the only thing which puzzles me is how come the price is so high.

I've been wondering how long it's going to take for it to make a profit. And if I look around my high street I see fewer people at Tesco and Morrisons and more at the cheaper end of the sector such as Aldo and Lidl. If this trend continues then this is going to knock Ocado's potential trade especially now that it seems that the likes of Aldi and Lidl are improving their product lines and are nipping away at the bigger stores.

That's just my own opnion but then I don't live in a prosperous area where the top end supermarkets are likely to better than here.

 

[MayZerG]

This is why i wanted a discussion on Ocado... Its up 30% today, was up 50% on the open. Amazing rally... now we're going to have to find the retracement if we have any chance of getting in.

 

[MalcolmSm1th]

Well, we know the story; Morrisson's have agreed a deal with Ocado. The CEO of Waitrose said this morning that he was for the deal as long as it doesn't effect them in any way. Of course, whether this is true or not, I don't know.

It looks like Morrison's are going to have to put up a lump up front (if I understand this correctly) which Ocado will use to build a new warehouse. If this is correct then I still can't see where Ocado are going to make their profits from as they will be running Morrison's on the cheap for a while.

I have to say that I don't follow the nuts and bolts of this one at all and I get the impression that Ocado are effectively getting deeper into debt by this. And why are Waitrose allowng this to happen? Are they, perhaps, waiting for Ocado to get deeper into the mire before taking them over? And then what will happen to Morrison's deliveries?

My initial impression from this is that Waitrose have surprised us by giving them the green light and there's a reason for this and, secondly, I don't think that this is going to work for either Morrisson's or Ocado in the long run. I think that, at the moment, this may be an all-in last chance gamble by Ocado.

I did a small successful SB on the short this morning for an hour or so but for the long term picture I have no idea what's going to happen in the near or medium future. But one thing that does stand out is that they couldn't make a profit before, so why could they make a profit now when they're effectively saddling themselves with more debt?

 

[MayZerG]

The share price of this stock now is amazing, i knew i was onto a potential winner, shame i didn't invest!

 

[LiquidGenius]

The old shoulda coulda didn't always hurts doesn't it! >(