Archived article

Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.

The stock is up by 60% since we said to buy last summer
Thursday 14 May 2020 Author: Ian Conway

OCADO (OCDO) £19.00

Gain to date: 60%

Original entry point: Buy at £11.87, 25 July 2019

Shares in online grocery supplier Ocado (OCDO) continue to confound the sceptics, hitting a new all-time high this week after reporting a surge in customer orders this quarter.

Having already seen retail revenues climb 10% in the first quarter thanks to an ‘almost overnight’ spike in demand under lockdown, the grocery delivery firm posted a 40% jump in revenues in April.

While the average basket size is below its peak, it is still significantly above this time last year and its customer fulfilment centres (CFCs) are running at their peak.

Meanwhile its technology solutions business marked a major milestone with the handover of the first international CFC to French supermarket group Casino. The site, south of Paris, went live in March.

Supermarket sales in France saw a similar spike to the UK, with initial stockpiling giving way to sustained high levels of demand as consumer spending shifted towards home consumption. Casino experienced ‘triple-figure growth’ in online grocery demand in the first quarter.

The next overseas site to use Ocado’s systems – Sobeys of Canada – is undergoing pre-launch testing. Ocado chief executive Tim Steiner is confident more international retailers will sign up to use the UK company’s platform as they look to roll out their online businesses.

SHARES SAYS: Hold on to the shares but don’t buy any more at the current price because it seems like so much future growth potential is already priced in.

‹ Previous2020-05-14Next ›