Kogan.com Ltd (ASX: KGN) shares have swung wildly over the past year but the trend has generally been higher. In fact the stock is up from $2.77 this time last year to $7.07 today.
So what’s happened?
Not much has changed in Kogan’s underlying business other than it launching a number of new products including Kogan mobile, insurance, and home internet.
Another factor lifting the shares is the successfu 2019 launch of Kogan Marketplace that lets third-party sellers reach customers at very keen prices.
This is an online retail business model pioneered by Amazon.com and Kogan’s entrepreneurial management team has generally taken a leaf out of the U.S. giant’s operating book by growing market share on razor thin margins.
Kogan Marketplace is also a capital-light business model as Kogan does not need to store the inventory as it’s supplied by third party sellers using the Kogan platform.
In my view Kogan looks a pretty good business, although I’d place it higher up the risk curve.
I’d also have to concede that offering this view this time last year would have been a much smarter call given the share price growth. However, I expect there could be good times ahead.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Tom Richardson owns shares of Amazon. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon. The Motley Fool Australia has recommended Amazon and Kogan.com ltd. 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 Scott Phillips.
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