Kogan KGN Strategic Valuation, page-9

Thank you for you post, noomxx.

The keyword "inventory level" in KGN's announcement triggered in me to think of A2M; they also have high inventory level for all sorts of COVID reasons, such as consumers destocking and of course China.

In the 1950s, I am told, there was a situation where the number of storks in the Danube valley correlated very well with the number of babies born.



A2M is the variable for 'storks' and KGN is the trend for babies.

Both companies - on the face of it - are not comparable! But, I think, that COVID has messed around with stocks in very similar ways. If one looks closely, one can see that every drop in price only had a short reprieve before the erosion continued. This would describe neatly the iterative re-rating process of the value of KGN. In its accumulation, this seems to me that the market will still keep down-rating KGN's value going forward. To me, there would be more downside risk, than upside reward.

... and to not sit on the fence: this looks like a typical situation where shareholders turn into long-term sharholders (believe me, I know, from my other holdings!)