LONDON -- A month can be a long time when looking at the share price of a particular stock. Here are two companies that have come out of the last 30 days at opposite ends of the profit/loss spectrum:
1. Ocado
The share price of Ocado (LSE: OCDO ) has advanced nearly 54% during the last four weeks or so. The gain is due entirely to news that the firm will now partner with William Morrison Supermarkets to help the supermarket move into the online delivery market.
The 25-year agreement will allow Morrisons to license certain technology, logistics, and distribution services in order for the chain to start to build its own online shopping service. In addition, Ocado has agreed to sell to Morrisons half the capacity of its fulfilment center at Dordon.
Ocado has received an up-front payment of 165 million pounds for the deal, most of which will be put back into the research and development of new technology. The payment was a welcome boost to Ocado's balance sheet, and will go some way to reduce the group's financial costs.
2. FirstGroup
In stark contrast, the shares of FirstGroup (LSE: FGP ) have fallen by a rather alarming 55% to around 98 pence.
This drop follows the release of the transport group's preliminary results during May, which detailed not only a profit warning but a dividend cut, too.
The results showed that pre-tax profits had fallen by 36.5% and that no final dividend had been proposed. Chief executive Tim O'Toole stated: "We are targeting an appropriate, progressive and sustainable dividend policy with cover of 2.0 to 2.5x in the medium term. In the short term the Board proposes that no final dividend will be paid in respect of the year to 31 March 2013, nor an interim dividend for the year to 31 March 2014."
In addition, FirstGroup announced long-standing Chairman Martin Gilbert would be leaving the company after 27 years. He will remain in charge until a successor has been chosen.
Another 2 potential winners
It's been a great 30 days for Ocado. And here are two other stocks that we think will not only have a good month but a great year. You can download our detailed investment report on each, absolutely free.
One is Our Top Growth Stock for 2013 and the other Our Top Income Stock for 2013. Make sure you read these reports before you buy your next stock, whatever style of investor you are!
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