The Kogan.com Ltd (ASX: KGN) share price has just hit another 52-week high of $2.02, having risen more than 50% so far in 2017.
The online retailer sells numerous products from electronics, computers, appliances, baby, kids and family items, household goods and health & beauty products as well as offering prepaid mobile phone plans in a partnership with Vodafone – 50% owned by Hutchison Telecommunications (AUS) Ltd (ASX: HTA).
How long Kogan’s share price can remain this high is anyone’s guess though. Many of its products are also sold by Amazon, and the imminent arrival of the giant US retailer into Australia selling similar products could see Kogan lose millions of dollars in sales. The difference too is that many of Amazon’s products are brand-names, which consumers might prefer to Kogan’s white-label products rebranded under its home brands. Other retailers like JB Hi-FI Limited (ASX: JBH) could also be forced to slash their margins, creating even more competition for Kogan.
At the current share price, Kogan appears expensive, especially given the Amazon threat. Foolish investors might want to steer clear for now, with better opportunities out there…
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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.