I’m happy with most of the UK growth shares I’ve bought over the last year, but three are making things look messy. Yet I’m not selling. I’ve noticed one thing about them. When the FTSE rises, all three rise that little bit faster.
That suggests they could fly when the stock market recovery finally kicks in. At least, that’s what I’m hoping.
I only bought online grocer and logistics group Ocado Group (LSE: OCDO) in July and I’ve experienced a lifetime of volatility. At one point I was 20% down, then 7% up, and today I’m 15.56% down.
Ocado Group is a high-risk share
Others have done far worse. The Ocado share price is down 30% over one year and 80% over five. It has a brilliant story to tell, thanks to its state-of-the-art customer fulfilment centres, with robots racing around filling boxes. It’s had some success selling these to grocers worldwide, but not enough to turn a profit. Worse, that happy moment is still years away.
Higher inflation has hit edgy growth stocks like this one by driving up borrowing costs and discounting the value of future profits. But I’m betting it will come good as interest rates fall and investors get greedy again. I just hope my nerves hold.
They’ve been shot to pieces by my experience with Burberry Group (LSE: BRBY). I bought the luxury retailer after it started throwing out profit warnings like a crazed traffic warden issuing tickets in a temporary no-parking zone. My ill-timed attempts to take advantage of its troubles by averaging down backfired, as the shares fell and fell.
As of today, I’m down 31.63% but some investors will consider that lucky with the stock crashing 58.83% over the last year.
Today, the FTSE All-Share is up 0.40% and Burberry is up 3.85%, a pattern I’ve seen repeated a lot in recent days. Over the last month, it’s climbed 18.86%. It looks like there’s a lot of bargain seekers out there.
We need the economy to start moving and, particularly China. Burberry needs to get its self-belief back, too. But like Ocado, I expect it to lead the charge when the bulls return.
Aston Martin was a crazy buy
The alarm bells were ringing but that still didn’t stop me from being the latest deluded soul to throw money at James Bond car maker Aston Martin Holdings (LSE: AML).
The company goes bankrupt for fun and it’s now my worst portfolio performer after crashing 33.63%. And I only I bought it last month.
The Aston Martin share price is down 52.14% over one year and 96.93% after five. I’m surprised they’re worth anything at all.
The latest culprit was a warning on 30 September that full-year profits will decline due to supply chain disruption and weak demand in China.
Like the other two, Aston Martin flies when the index rises, and crashes when it dips. When brighter times arrive – as they always do at some point – I hope to recoup my losses at speed. I’m not daft enough to buy more, but I’m stubborn enough not to sell them.
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Harvey Jones has positions in Aston Martin, Burberry Group Plc, and Ocado Group Plc. The Motley Fool UK has recommended Burberry Group Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
