A UK research report has found a growing number of couples over 60 live in separate households, a trend particularly pronounced among those entering a new relationship at this stage of their lives. Improved mental health is a bonus.
Speakers of the calibre of David Knoff, the expedition leader stranded with his team in Antarctic during COVID, can regularly be heard at this global institution that places a premium on knowledge, not qualifications.
Good times set to roll for online retailer
I have a bullish outlook for the Kogan.com Ltd (ASX: KGN) share price for the long-term and I’m going to tell you why in this article.
Kogan.com is one of the biggest online retailers on the ASX. It reported $638.2 million of gross sales in the first half of FY21, which is quite a lot considering it’s all e-commerce based.
Why I think the Kogan.com share price has a good future
Cast your mind back to before COVID-19 (as hard as that may be). Online shopping was steadily growing, but it didn’t have as much importance in Australia compared to other markets like the US and the UK. Australia is still behind when it comes to e-commerce, but the last 12 months has seen an enormous increase in the adoption of Aussies buying stuff online.
That’s great news for Kogan.com in my opinion. Shoppers are always looking for good-value products or services, which is what Kogan.com aims to offer. I think that’s one of the main reasons why Kogan.com’s sales and customer numbers have gone up so much. Gross sales increased 97.4% year on year, while active customers went up 76.8% to 3 million in HY21.
If you ignore the Kogan.com share price movements, the business has been growing very impressively. HY21 experienced net profit after tax growth of 164.2%, to $23.6 million. But despite that, Kogan.com shares have fallen 33% since the start of the 2021 calendar year.
For me, a much lower share price with a business that is growing quickly is an attractive combination.
The Kogan.com share price looks good value to me
Kogan.com is not one of those tech shares with a huge valuation and no profit, like names such as Afterpay Ltd (ASX: APT), Zip Co Ltd (ASX: Z1P) and Uber Technologies Inc (NYSE: UBER).
The company is making good profit every result and it’s quickly growing. More products, more categories, more sellers and more services.
I actually think the business looks very nicely valued at just 24 times the estimated earnings for the 2021 financial year, using CommSec numbers. That’s a lot cheaper than many other ASX growth shares like REA Group Limited (ASX: REA), SEEK Limited (ASX: SEK) and Carsales.Com Ltd (ASX: CAR), which are arguably much further along on their growth runways.
One of the main reasons I like Kogan.com so much is that it has a very large total addressable market – it sells almost everything – and it can benefit from platform effects, where more customers leads to more sellers and higher margins. The company’s profit margins do keep increasing, suggesting that more and more profit can return to shareholders as dividends in the coming years.
Geographical expansion is also a good avenue for future growth, with New Zealand’s Mighty Ape opening a very useful door to a new market.
Summary thoughts
Kogan.com has its doubters, and the growth rate isn’t likely to continue to be above 100% forever. But I think the Kogan.com share price valuation, looking at the forward price/earnings ratio, looks so reasonable that Kogan.com is a very interesting idea to think about.
There are quite a few high-quality ASX growth shares to look at for investors, but I think Kogan.com’s growth potential puts it high on my watchlist right now.
The information in this article is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) and is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.
