The past two-and-a-half years have been brutal for shareholders in tech-driven retailer Ocado Group (LSE: OCDO). Alas, the Ocado share price has collapsed spectacularly since its soaring heights of 2020-21.
After falling so far from grace, perhaps there’s hidden value in the shares? After all, they’ve rebounded from their all-time lows of October 2022.
Share price’s savage slump
During the pandemic panic of 2020-21, Ocado’s grocery home-delivery service was massively in demand, especially during Covid-19 lockdowns.
At its all-time peak, the online supermarket’s stock surged to a record high of 2,914p on 30 September 2020. But when effective Covid-19 vaccines arrived in November 2020, Ocado shares went into a long and sustained slide.
By end-2020, the Ocado share price had dropped to 2,287p. The next year was no better, with the stock ending 2021 at 1,678p. Then came an even steeper slump, with the shares closing out 2022 at just 616.8p.
The all-time low for this stock came almost seven months ago: 380.3p on 13 October 2022. It seems incredible that a FTSE 100 share once nearing £30 was trading below £4 just over two years later. What a blow for its owners.
Ocado shares bounce back
On Friday, the Ocado share price closed at 495.5p, valuing this business at £4bn.
That’s 30.3% above October’s record low. However, the grocer’s stock is almost exactly half (down 49.9%) of its 52-week high of 989.6p hit on 4 August 2022.
Here’s how this Footsie share has fallen over six different periods:
| Five days | -3.8% |
| One month | -4.3% |
| Year to date | -19.7% |
| Six months | -26.6% |
| One year | -38.2% |
| Five years | -10.8% |
My table shows how long and drawn-out the Ocado share price collapse has been. It has lost value over all six timescales, ranging from five days to five years.
I don’t like volatility
Ocado shares have been on a roller-coaster ride for many months — even years. But surely there must be some value in this established business, going since April 2000?
Generally, I don’t like volatile stocks, simply because it’s much harder to hit a fast-moving target. This makes it very difficult to time my purchases.
Of course, I’d have been delighted to buy at October’s price low of just over 380p. But what about buying now, while the Ocado share price is still below £5?
The big problem for me is that Ocado shares lack any basic fundamentals, such as a price-to-earnings ratio or dividend yield. This is because the group is loss-making, so it doesn’t pay out cash dividends.
Still, I have two hunches. First, at £4bn, Ocado might be a takeover target for a much larger supermarket chain — perhaps its joint-venture partner Marks and Spencer?
Second, Ocado’s powerful tech solutions for warehousing and logistics might lead it to sign more lucrative contracts with grocers worldwide.
Summing up, I don’t have the spare cash to buy Ocado shares today. And I can’t say how low the Ocado share price might go, because I don’t have a crystal ball.
Even so, I’ve added this stock to my watchlist of shares to buy this summer. Now let’s see what happens to the Ocado share price over the next two months!
