The Ocado share price is around 2,300p. Would I buy now?

first_img Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! Zaven Boyrazian | Tuesday, 23rd February, 2021 | More on: OCDO I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. “This Stock Could Be Like Buying Amazon in 1997” Image source: Getty Images Enter Your Email Address Zaven Boyrazian does not own shares in Ocado. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.center_img The Ocado share price is around 2,300p. Would I buy now? The Ocado (LSE:OCDO) share price has been on fire this past year. With the pandemic forcing most people to stay at home, the online-supermarket stock enjoyed a significant business boost.But over the past few weeks, the share price has begun to decline. Why? And is this a potential buying opportunity for my growth portfolio? Let’s take a look.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Why did the Ocado share price fall?The business published its full-year 2020 results in early February and I think the company is performing quite well. Total revenue increased by 32.7%, primarily due to UK operational growth. And its International Solutions segment looks like it’s taking off with revenue rising from £0.5m to £16.6m.The firm remains unprofitable, but its losses also declined from £214.5m in 2019 to £44.1m in 2020. So why is the Ocado share price falling?As I see it, investors are being more cautious due to two factors. The first is the potential introduction of a digital sales tax. The second is the expectation of a slowdown in online sales growth as more of the population gets vaccinated against Covid-19. Personally, I’m not overly concerned about either of these threats. And here’s why.Ocado is building a robot armyAs previously stated, the recent pullback in the Ocado share price is likely linked to its online supermarket segment. While that does currently generate the most significant portion of revenue, it’s no longer the primary focus of the business. But the stock pivoted in 2019, transforming into a technology-led software and robotics solutions company. So what does that mean?Basically, it built a robot army to help automate the majority of the process of producing, packaging and delivering groceries to retailers worldwide. Today, over 10 supermarket chains — including Morrisons, Coles, and Kroger — have signed up to use its robot-driven platform.What I find particularly promising is the prospect of a network effect forming. As more companies join the platform, its resources grow. This subsequently enables faster innovation to improve efficiency, which in turn attracts more companies to sign up. There are many challenges aheadWhile the robot-driven platform is vastly different from the home delivery of food, it still serves the same market – groceries. This means that the regulatory requirements for producing and packaging food must be maintained. This is a task made even more complicated by its international operations as the rules vary from country to country.Any delays or disruptions in the supply chain would likely damage Ocado’s reputation as well as the relationships with its platform customers. Even more so if the cause is a regulatory breach.Another significant risk that may lead to operational disruption is the workforce itself. The majority of Ocado’s employees are EU nationals (for now). This adds additional complications as the UK is no longer a member of the EU. Thus most workers will have to acquire visas. While this is only a short-term problem, it could lead to the potential loss of key personnel.Would I buy Ocado at the current share price?There are certainly plenty of risks ahead, but the business is trying to redesign supermarkets’ grocery supply chains. If it succeeds, robots could become the new standard way of doing business for all grocery stores. Personally, I think the risks are worth the reward and so Ocado looks like it could be a fine addition to my portfolio. Our 6 ‘Best Buys Now’ Shares See all posts by Zaven Boyrazian Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. Simply click below to discover how you can take advantage of this.last_img


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