Food service is not delivering the goods

By Graeme Dickson
Updated: 10:29 EDT, 23 September 2010

Check on food delivery service Ocado Group (OCDO) over the next few weeks after rumours emerged that Waitrose is set to deliver goods though its own in-house vans within the M25 region.

The stock was picked from a series of negative moving averages, but given that the talk is that ultimately Waitrose may sever its contract with Ocado.

It's interesting to see how its lofty valuation (an estimated price to earnings ratio of 62 for 2012) will stack up.

As Richard Buxton, head of UK equities at Schroders, famously said when referring to its initial public offering at 180p 'this is only for investors who wish to create capital gains tax losses'.

I'm not sure he would wish to invest his clients' funds even at a 40p discount? A close above 160p would probably render this idea useless but otherwise 100p looks to be on the cards in due course.

Update

Vedanta (VED) – suggested to sell at 1980 with a view that it was likely to spike upwards possibly up to 2500p, the shares closed yesterday at 2239p. Despite the move against the idea, sit tight for now while a close above 2500p would probably be the death knell for this suggestion.

Victrex (VCT) – suggested to sell at 1076p, the stock closed yesterday at 1230p. Again not ideal but hold on unless 1320p is broken.

Carpetright (CPR) – suggested to sell at 721.5p, the shares pierced through the resistance of 780p and should be closed to adhere to the suggested stop-loss discipline.

Stobart (STOB) – suggested to sell at 143p, the stock hit the stop of 150p on 17 September, so it should no longer be open.

Smith & Nephew (SN.) – Suggested to sell at 581.75p, the stock triggered the profitable stop of 573p so should now be closed.

The writer does not hold any shares or derivatives in the above mentioned companies. The material for this report comes from Alpha Terminal.