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Tonyever

Ocado

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Still mystified at the dragnet appeal of Ocado at these levels, there’s obviously huge work for little profit at huge relentless expense. On every level it’s crazy?

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Hi , thought I'd add to your post on what is one of the most shorted UK stocks

 

In the year to 3 Dec 2017, Ocado reported a pre-tax loss. Costs developing IT systems and automating warehouses weighed on profits (-£0.5m versus £12.2m profit the previous year)

 

But they have announced a string of partnerships; French supermarket Group Casino, Sobeys of Canada + another unnamed

 

Shareholders will hope these will allow Ocado to slowly start to turn a profit... Ocado have said they expect earnings to rise significantly in 2019

 

However since the tweet below went (semi) viral in January the share price is up nearly 50%!

 

Ocado tweet.png

 

For those who are still as sceptical about the business model as they were at the turn of the year, this in theory makes the company an even more attractive short, right?

 

Ocado.PNG

 

Interestingly, the percentage of its shares on loan to short sellers has fallen to 7.9% from 13.5% back in January

 

Do we think there has been some profit taking by the sceptics or have the winds changed and sentiment about the long-term earnings potential improved?

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Its one of the hardest stocks to call. Some people felt as a grocer it was over valued. However, it is starting to be regarded as a tech business. and perhaps rightly so, after seeing this video:

 

"Ocado's new warehouse has thousands of robots zooming around a grid system to pack groceries. The thousands of robots can process 65,000 orders every week. They communicate on a 4G network to avoid bumping into each other. Is this the future of retail?"

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