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As painful because the Price range on 30 October is prone to be, it gained’t shake my dedication to investing for the long run. However there are some UK shares that I’m avoiding just like the plague, a minimum of primarily based on present kind.
Aston Martin Lagonda
I can’t deny that the thought of part-owning an organization that produces a few of the most stunning vehicles on the planet is interesting. Look underneath the bonnet, nonetheless, and Aston Martin Lagonda (LSE: AML) smacks of an previous banger. It’s shares have misplaced 97% of their worth in six years, making it one of many worst listings in latest reminiscence.
To be truthful, the FTSE 250-listed enterprise has confronted enormous headwinds. Provide chain points and excessive inflation have conspired to scale back gross sales. With the latter normalising and the brand new Vanquish V12 due earlier than the tip of 2024, maybe a restoration is on the playing cards. Even the smallest chink of sunshine might see the share worth soar. A Q3 replace is due tomorrow (30 October).
However I believe there’s nonetheless loads to fret about. The fast turnover of CEOs isn’t reassuring. There’s additionally the truckload of debt to ponder. This raises the chance that the loss-making firm will faucet its long-suffering buyers for cash (once more).
Did I point out that it’s gone bust seven instances earlier than? If that’s not a nasty omen, I don’t know what’s.
Ocado
I’m avoiding Ocado (LSE: OCDO) for related causes.
Once more, I can’t deny that the ‘product’ is spectacular. This firm’s buyer fulfilment centres (CFCs) are a sight to behold, with robots zipping this fashion and that to fulfil buyer orders.
The issue is that this firm is valued at £3bn. That’s an enormous ol’ chunk of money for one thing that also doesn’t make a revenue. It additionally implies that dividends, in the event that they ever come, are years away.
Once more, maybe there are higher instances forward. Income has been rising (and losses have been falling) in 2024. There are indicators Ocado will grow to be money circulation constructive in FY26.
However I’m undecided I’ve the abdomen or the endurance to attend for the corporate to ship on its partnerships with numerous retailers.
Within the meantime, the stability sheet is creaking like a haunted home ground and all that high-tech wizardry gained’t be low cost to keep up.
boohoo
A closing share that offers me the heebie-jeebies is fast-fashion agency boohoo (LSE: BOO).
To be truthful, I’ve truly owned the inventory a few instances over time, albeit with various levels of success. I used to be initially interested in the corporate resulting from its advertising savvy, sturdy monetary place and nice progress prospects (additional boosted by the acquisition of a number of manufacturers like Debenhams)
Since then, boohoo has gone massively down in my estimation and, it might appear, its goal demographic. Questionable company governance? Examine. A droop in income? Examine. Chinese language rival Shein has additionally grabbed market share.
This month, CEO John Lyttle mentioned he was stepping down. Now, Frasers Group founder Mike Ashley desires the job to stop additional worth destruction. It’s all a little bit of a massacre.
Maybe the corporate may shock us as discretionary spending recovers. Half-year numbers are due on Friday (1 November).
However I gained’t be getting concerned. Sleepless nights usually are not what I’m after.
