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KGN

4.39%

$4.28 kogan.com ltd

Very good analysis one that gave me the tingles. The figures are...

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JayWin

3,550 Posts.

413

11/07/18

23:16

Post #: 34287714
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Originally posted by Leverageman ↑

I can understand everyone's dismay at the recent share price action of KGN, however today's increase can give heart.

In relation to the director selling which of itself can wane fellow investor's confidence I agree this was not handled well which exacerbated the inevitable share price weakness.

However with such a huge run up in the share price anyone would be tempted to sell no matter what the prospects for the company are. As to why the directors are selling is pure speculation, which is why it is best to focus on fundamentals.

I would have thought the current share price is a very attractive entry point for those who have missed the boat so far, for these reasons:

Internet retailing is a structural growth play. It going to increase whether it is Amazon, Ebay or Kogan.

Kogan is a capital light business with high returns on equity, high insider ownership (even after the recent sales), high growth rates and little or no debt.

The move into white-goods and kitchen appliances would have to be a massive market and a huge positive for the company.

Misunderstanding about the effect of the abolition of the $1,000 GST import threshold. 3rd Party International or Global Brand sales constituted 40% of total company sales for the Dec 17 half but only made up 21.4% of the company's gross profit ($40.7M in total) being around $8.7M. I think Ruslan has expanded into other verticals because he knew the GST would impact the company. However other areas are expanding so quickly it may not matter that much. For example Kogan Mobile's gross profit for the Dec 17 half was $4.8M and nearly $3.5M for the March 18 qtr. Also people forget that Amazon International sites have pulled out of the Australian market so there will be less competition for Kogan and less reason for Kogan to absorb the GST.

The company is experiencing huge growth and most of this is before we have seen the numbers for the new verticals such as health insurance, pet insurance, NBN plans etc.

2018 EPS forecast is 18.2c which equates to NPAT of $17M. This compares to pro-forma 2017 NPAT of $7.2M.

This puts the company at a 2018 PE of around 38 times at the current share price of $6.95. I am not sure why people think this is overvalued given the 2018 growth in EPS of around 136%. What 2019 will bring is the big question.

Based on current growth rates Kogan Mobile may contribute $20M gross profit in 2019. This will amazingly be nearly 2/3 of the entire $32.6M gross profit the company made in 2016.

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Very good analysis one that gave me the tingles. The figures are more in depth than what 4traders provides, which is Reuters data. I gave you one of those GA’s and thank you for an excellent post.

KGN Price at posting: $6.71 Sentiment: Buy Disclosure: Held
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(20min delay)
Last $4.28		Change 0.180(4.39%)		Mkt cap ! $430.6M

Open	High	Low	Value	Volume
$4.12	$4.32	$4.09	$4.186M	988.1K

Buyers (Bids)

No.	Vol.	Price($)
1	776	$4.27

Sellers (Offers)

Price($)	Vol.	No.
$4.30	3000	1

View Market Depth

No.	Vol.	Price($)
1	776	4.270
3	3261	4.260
2	3261	4.250
4	9261	4.240
2	3261	4.230

Price($)	Vol.	No.
4.300	3000	1
4.310	3283	4
4.320	31486	7
4.330	8137	6
4.340	3426	3

Last trade - 16.10pm 11/07/2024 (20 minute delay)

KGN (ASX) Chart

Very good analysis one that gave me the tingles. The figures are...

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Very good analysis one that gave me the tingles. The figures are...

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