MoPh Markets

Asos, Ocado, JD Sports — 3 Stocks to Watch This Week

London-listed stocks moved mostly positive last week, with the leading UK index, the FTSE 100, enjoying its strongest week in nine months. 

While this week, we focus on two names posting updates — JD Sports (LON: JD.) and Ocado (LON: OCDO) — we also continue to keep a keen eye on Asos (LON: ASC). Here’s why:

Asos 

Asos Web Traffic – Source: Semrush
  • Starting with the online fashion retailer, Asos is a company we mentioned at the start of August, and our view hasn’t changed. 
  • When we discussed it previously, Asos had been knocked off the top of the most shorted stocks. However, it has reclaimed that position once again. 
  • It is still one to watch for bargain hunters, with the share price remaining at lows and web traffic having somewhat stabilised in recent months.
  • However, we aren’t positive on the stock as strong headwinds still remain in play, which investors should seriously consider.

Ocado 

Source: ONS
  • UK online supermarket Ocado will post a third-quarter Retail trading statement on Tuesday, September 19.
  • Semrush data shows web traffic is still on the decline; however, we note that this has not always been indicative of Ocado’s performance regarding customer acquisition and revenue. 
  • Our previous bearish view of the stock expired after it fell below 400p per share, and we remain neutral.
  • Even so, Investors should consider headwinds, such as inflation and the July dip in UK retail sales, when considering the upcoming release. 
  • The ONS said that food retailers “indicated that the increased cost of living and food prices continued to affect sales volumes,” which fell by 2.6% in July.

JD Sports 

JDSports.co.uk Web Traffic – Source: Semrush
  • JD Sports will release its interim results on Thursday, September 21.
  • The JD share price decline has created an attractive entry point for Berenberg analysts, who labelled the stock a top pick last week.
  • Online demand trends are declining, and combined with the recent drop in UK retail sales, consumers may have eased discretionary spending due to sticky inflation. 
  • In addition, investors may want to consider if the shoplifting epidemic has impacted margins, as explained by Proactive Investors here. 

By Sam Boughedda