The past 15 months have been brutal for investors in Ocado Group (LSE: OCDO). The technology-driven online retailer‘s shareholders got smashed as the Ocado share price crashed. But after falling steeply, could this former growth stock be heading for value territory?
The Ocado share price collapses
Over the past 12 months, the FTSE 100 index (of which Ocado is a member) has climbed by 8.5%. Adding in, say, 4% for cash dividends takes this total to 12.5%. That’s a respectable return in these troubled times. However, over the same period, the Ocado share price has plummeted.
As I write, Ocado shares trade at 898.8p, down 19.8p (-2.2%) late Wednesday. However, earlier in the day, they dipped as low as 877.2p — a fresh 52-week low. As a result, the Ocado share price has collapsed by more than half (-55.1%) over the past year.
Even worse, the share price has imploded since peaking in autumn 2020. At their all-time high, Ocado shares hit an intra-day peak of 2,914p before closing at 2,744p on 30 September 2020. From this record high, this FTSE 100 share has lost almost 70% of its value. Yikes.
To show how brutally the Ocado share price has reversed in 2021-22, here are seven key milestones for the stock:
| Date | Price (p) | Comments |
| 21 July 2010 | 180 | Flotation price |
| 2017 | 397.1 | Year-end close |
| 2018 | 790 | Year-end close |
| 2019 | 1,279 | Year-end close |
| 30 September 2020 | 2,914 | All-time high |
| 3 February 2021 | 2,888 | 2021 high |
| 4 May 2022 | 877.2 | 2022 low |
The Ocado share price has lost more than £21 since its 2021 peak on 3 February. This means that its market value has collapsed in 15 months from almost £21.8bn to today’s £6.8bn. This £15bn loss of value in 15 months makes this stock the worst performer in the FTSE 100 over the past year. Ouch.
Could Ocado finally be in bargain-bin territory?
Since February 2021, when the Ocado share price was riding highest, I’ve repeatedly given this stock the thumbs down. And every time after I declined to buy Ocado shares, they continued to fall. For example, on 9 February, with it trading at 1,243p and the group valued at £9.3bn, I wrote the following: “I would not buy Ocado today. For me, a £9.3bn valuation for a company yet to make a profit in over two decades is simply too rich for my blood.”
As a veteran value investor, I usually rely on company fundamentals such as earnings yields and dividend yields to weigh up shares. But Ocado is loss-making and has never paid a dividend, so these figures are no use here. And yet, after a near-70% fall in the Ocado share price, I’m starting to think that there may be value in this slumped share.
Rarely do shares keep travelling in a straight line, so I assume there will eventually be some turning point for the shares. After 15 months of falling, perhaps this turnaround will arrive soon? I don’t own OCDO, but after it’s had such a torrid time, I would tentatively buy a modest stake at today’s price. However, long experience has taught me a share that has lost 70% can still lose another 70%!