OCADO chiefs were yesterday upbeat about the company’s prospects and had seemingly justifiable reasons for optimism with an almost 30 per cent sales hike.
But the figures cannot be looked at in isolation and come on the back of a torrid flotation which saw chief executive Tim Steiner and crew pitched against some analysts who claimed the stock was still overpriced.
Indeed the way the share price has gone since the issue at a much reduced 180p would suggest that the sceptics were correct to rein in the company as it sought to bankroll expansion.
The neigh sayers were again out in force yesterday helping the share price to close around 146p. Jonathan Pritchard at Oriel dismissed the stock saying: “No changes to forecasts and the fundamentals will reassert themselves. The fundamentals, from this valuation, look poor.”
Meanwhile the company said it was “very focused on where it (the stock) will be trading in two or three years time, not where it will be trading at lunchtime”.
However, what the stock is doing at lunchtime – and indeed next week – is being watched closely and the company cannot afford to appear aloof and dismissive if it is to build its reputation.
Ocado is also facing a challenge from Morrisons which is expected to announce a foray into online retail.
With the picture so mixed a “hold” as advised by Keith Bowman at Hargreaves Lansdown would appear to be the best option.