Full disclosure: I hold both Aston Martin (LSE: AML) and Ocado Group (LSE: OCDO) shares in my Self-Invested Personal Pension (SIPP). The next bit probably doesn’t need disclosing. They’re by far my two worst performers, after crashing 93% and 90% respectively over the last five years. Every time I check my SIPP, there they are, a constant reproach to bad decision-making. But suddenly, they’ve both sprung into life. Are they about to make a dazzling comeback?
Aston Martin and Ocado prove the old mantra: just because a stock has fallen 90% doesn’t mean it can’t fall another 90%. Performance was poor when I bought them, and it’s stayed that way. They’ve had their moments, usually after better-than-expected results hinted at progress, but they’ve always slipped back.
Can these FTSE 250 stocks make a comeback?
They’re having a moment right now. Aston Martin shares are up 5% over the last week (and 13.5% over the month), while Ocado has jumped 13.5% in a week. Even so, they’re still around 27% lower than a year ago.
Here’s the strange thing: neither company has released results to justify the recent mini-recovery. Aston Martin posted its last set almost two months ago (25 February), revealing a 21% drop in full-year revenue to £1.3bn. Free cash flow weakened and net debt climbed another £200m to £1.4bn. There were some positives, as the board expects underlying operating profit to move towards breakeven. The shares nudged up on the day, but largely because investors had feared worse after a recent profit downgrade.
Ocado’s 2025 results (26 February), came in slightly ahead of forecasts, with revenue up 12% to £1.4bn. That’s despite prior news that major partners Kroger and Sobeys would scale back investment in its customer fulfilment centres (CFCs). The board is targeting £150m of cost savings by 2026 and hopes to turn free cash flow positive in the second half. But the shares fell on weak guidance.
Dare investors take a punt?
Threats remain. For Aston Martin, Donald Trump’s tariffs are a real blow, given the US generates roughly a third of revenues. It produced just 5,448 cars last year, so even a modest sales dip can hit profits hard. If rising oil prices push up interest rates, servicing its debt becomes even tougher. Cash flow is still expected to remain negative this year. It’s a hazardous road.
With Ocado, we need to see a steady rollout of new CFCs to justify the vast sums invested. Right now, it’s announced plans for just six. Ocado Retail, its joint venture with M&S, is performing well, but the shares will take another knock if the group fluffs its efforts to turn free cash flow positive. The latest cost-of-living squeeze won’t help.
Here’s the strange thing. Both companies make exceptional products. Aston Martin’s new Valhalla has drawn rave reviews. Ocado’s CFCs are feats of engineering. But they need to make money too, and these are unforgiving conditions.
I’d put the recent downward bounce to wider market volatility, as investors hunt for recovery plays during periodic bursts of optimism, often tied to hopes of a de-escalation in the Iran conflict. They could finally turn it on, but history suggests caution.
I can see far less risky recovery prospects elsewhere on the FTSE today.
