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Ocado (LSE: OCDO) shares are going gangbusters. The UK inventory market is flying, however Ocado’s success is on a unique scale. Is 2026 the yr it lastly fulfils its potential and makes buyers wealthy?
I maintain Ocado shares myself, so I’m loving this second. However I’m additionally cautious. The FTSE 250-listed grocery tech specialist has a historical past of maximum volatility. It boomed throughout the pandemic, when the nation was locked down and meals supply orders had been flying, nevertheless it’s been largely downhill since. Till now.
5 years in the past, buyers had been loopy for its robotic warehouse know-how. Its state-of-the-art buyer fulfilment centres (CFCs) wowed supermarkets all over the world, notably Kroger within the US, but in addition in Sweden, Japan and past.
FTSE 250 restoration star
There was an issue although. CEO Tim Steiner was pouring cash into his beloved bots, however the returns weren’t coming quick sufficient. The corporate was years away from turning a revenue whereas money owed rolled up. When inflation took off, servicing these money owed turned much more costly, and buyers fled. The shares crashed greater than 90%, peak to trough.
Ocado’s neglected on-line grocery three way partnership with Marks & Spencer can be doing properly. Gross sales surged 15.8% within the 12 weeks to 30 November, Worldpanel information confirmed, nicely forward of second-placed Lidl at 10.2% and large gun Tesco at 4.7%.
Free money begins flowing
In complete they’ve skyrocketed 46% within the final month, which might have turned a £10,000 funding into £14,584. However let’s not get carried away. The overwhelming majority of buyers are nonetheless nursing large losses, together with me. Regardless of that soar, the Ocado share value is down 89% over 5 years. That’s the issue with dropping cash. It takes a whole lot of development to claw it again.
This inventory continues to be too dangerous for many buyers. For these keen to take a punt, I’d urge them to sleep on it. I’ve seen spikes within the Ocado share value earlier than, they usually’re typically adopted by a fast retreat. I do assume the shares is likely to be value contemplating with a long-term view, however just for buyers who perceive the dangers and may afford to take the prospect. They might ship outsized rewards, however sturdy nerves are important.
