Below, we took a closer look at the company and how you can invest in its stocks.
Where To Buy Kogan Shares in Australia?
So, can buy Kogan shares only from brokers? As of now, yes. Thankfully, this shouldn’t be a problem as there are a plethora of names you can choose to work with.
It shouldn’t be a problem as you can use the platforms on almost any UI – Android, Windows, IOS, MacOS, and so on.
Recommended Broker For Kogan Shares in Australia
If you live in Australia, you are probably familiar with the brand. However, not many people know that it consists of a portfolio of different businesses.
As an investor, this is what you want to hear.
There are many avenues through which profits can be made. The portfolio consists of Kogan Retail, Kogan Marketplace, Kogan Mobile, Insurance, Health, and Travel. Many of them belong to highly stable industries.
The company has been around for more than ten years and was founded in 2006 by Ruslan Kogan.
In that time, the corporation has been rapidly expanding which is proof of how successful it has been. Its founder, Rustan, was voted the richest person in Australia under 30 a few years ago.
Since its conception, there has been a 200-300% increase in its growth. Back in 2013, the Wall Street Journal speculated that the portfolio of companies had a net worth of USD 400 million.
What’s notable about Kogan is that it owns Dick Smith Holdings as well. The Australian brand was a major name in the electronics game. It even managed to expand to New Zealand. The e-commerce giant acquired it in March of 2016.
Investing in the company can be very lucrative. In the 15 years since its inception, it has won many awards. It snagged third place in Power Retailer’s Top 100 online retailers.
|Industry||Insurance, Travel, Consumer electronics, Online retail and Mobile|
How to Buy Kogan Shares
If you’re thinking of purchasing the chain’s shares, we have good news for you. It is fairly easy to do so. You’ll be working with an online broker. If you don’t know what a broker is, it is a trading platform connected to the stock market that lets you buy and sell assets.
The majority of shares connected to the ASX were created with newbies in mind. That’s why there are resource centers and guides to help you trade better.
As there are so many brokers available, you need to be careful about which one you choose to work with, as some are subpar. The broker you’re interested in should be heavily verified, preferably by the Australian Securities and Investments Commission.
Most options available for Australia also work in New Zealand. As a Kiwi, a site that is authorized by the New Zealand Securities and Investment Commission is required.
However, that’s not the only aspect you should look for. The company you’re interested in should let you trade a range of assets. You might be happy trading Kogan shares for now, but you will quickly want to buy and sell other things too.
Now, how do you use an online broker to invest in the giant?
- Once you’ve chosen a broker connected to the Australian Securities Exchange, you’ll have to create an account. You’ll be asked personal questions, and have to provide proof of citizenship and bills to verify where you live.
- You’ll then have to fund your account. Depending on the platform you’re using, the minimum deposit you’ll have to place would differ. You can fund it through your credit or debit card, PayPal, or bank transfer.
- You can type in Kogan to see if the platform will let you buy and sell stock from the company. You might find it by searching for its ticker symbol, instead of the actual name – KGN.
- Decide if you want to buy the shares now or later. Your research on how the market is currently doing would let you decide on this. If you choose to buy the retailer’s shares later, you’ll be making use of a limit order. Buying the stocks immediately would be a market order.
- Once you buy the stock(s), it is not the end of the road. You’ll have to monitor your progress to see if it has brought in cash. You won’t regret investing in the company as it has such a diverse portfolio, and there are so many avenues to make cash.
Why Buy Kogan Shares?
Now that you know how to get hold of the stocks, you might be wondering why investing in the retailer is a good move. From what we discussed, you know that the corporation is a portfolio of other businesses. If you take a closer look at the industries Kogan’s businesses fall under, you’d realize that they are part of several lucrative fields.
However, these aren’t the only reasons why you should invest in the brand. Let’s dive into some of them in-depth.
A Loyal Userbase
The retail chain allows you to use its services by joining a membership program. As of now, it boasts over 8 million active subscribers. Once you become a member, you will get free delivery for whatever you purchase. You can also opt for express shipping without paying a dime.
It’s no surprise that the number of users on the site keeps growing due to this perk. The fact that they receive such benefits means that Kogan’s fanbase would stay loyal to the company in the long term. Data collected from the company has shown that members, in general, tend to buy more shares than non-members.
A Jump in Margins
If you want to know how successful a business is, take a look at its profit margins. The gross margins will tell you the revenue made, minus the cost to create the goods/service. When it comes to Kogan, its margins have increased throughout the years.
In the FY17, the margin was 17.9%, 19.5% in FY18, 20.7% in FY19, and 25.4% in FY20.
You can take a look at Kogan’s earnings before taxes and depreciation were added too. You’ll see that the corporation has been successful this way as well. These means of measuring are called the EBITDA, and the giant’s EBITDA margin was 4.3% in FY17, 6.3% in FY18, 6.9% in F19, and 9.3% in the FY20.
The Founder Runs It
Businesses see the most success when their founders take charge. There is no science behind it, merely correlations that have been observed throughout the years.
Take a look at Facebook, Microsoft, and Tesla – these companies are all run by their founders. Kogan.com is no different. Ruslan is still the CEO of his empire.
Businesses run by their founders tend to do so well because the latter are personally invested in their operations, and avoid taking risky decisions that could compromise the growth of the company.
There Is a Good Track Record
Investing in brands is all about doing your research. Kogan stocks have a good track record in this respect. In 2017, the Australian Stock Exchange awarded the multinational with the best performing stock in the ASX All Ordinaries category.
When you consider that its gross margin has been steadily increasing since it was conceived, this award doesn’t come as a surprise. The revenue it made in 2017 was $289.5 million, which was an impressive growth of 37.1% compared to the previous year.
Kogan.com is planning to expand its portfolio even further. Not only did the company purchase Dick Smith Holdings, but it acquired Mighty Ape as well. You could think of it as New Zealand’s equivalent. It sells electronics, computer games, books, and a lot more items than its counterpart.
With Mighty Ape under its belt, Kogan is expected to generate a revenue of AUD 137 Million in the 2021 fiscal year, along with an EBITDA of AUD 14 Million.
What’s great about KGN is that it regularly looks for names to acquire. It keeps its funds just for acquisition purposes. It is known that $122.4 million of the company’s reserves were used to purchase 100% of Mighty Ape’s issued shares.
The giant is arguably the largest supplier of electronics in Australia. However, it has many competitors. We talked about three of the best below. We would have included Mighty Ape, but it’s now part of the company.
Kmart is probably Kogan’s biggest competitor. It consists of 234 retail stores across Australia and New Zealand with 209 of them being in Australia alone.
Kmart has been around for some time. It began as a joint venture between G.J Coles & Coy Limited and the S.S Kresge Company in the US. Kresge owned 51% of Kmart’s shares. In Australia, the first store opened in 1969. From the very first day, the chain saw great success with $97,000 (AUD 1.17 million by 2021’s standards) being made.
It sells a range of goods, not just electronics. Kmart even has a multi-level store, which opened in Rundle Mall in Adelaide in 2012.
Like its counterpart, you can buy shares from the Australian Stock Exchange.
Harvey Norman is a multinational retail chain that sells various goods, including furniture, computers, bedding, and electrical products. What differentiates Harvey Norman from its rival is that it’s a franchise.
As of 2016, the company had 280 franchises in Australia, New Zealand, South East Asia, and Europe. They all operate under Harvey Norman Holdings Limited on the ASX.
The company was founded in 1961 and first started selling electrical products. Since its inception, it has seen steady, organic growth. However, once it began to acquire other names, its profits began to see a sharp spike. The first major acquisition was in 1998 when Joyce Mayne was bought over by the company.
In the next entry, we talked about Retravision. Some of its stores were bought over by Harvey Norman, as well.
Retravision has been around much longer than its alternative, going back to 1959. It started as the Retra TV Service Association of Victoria and was founded by radio and TV service agents. The company grew rapidly, and by the end of 2000, it turned over $1.8 billion in retail. By 2006, Retravision had 505 stores across Australia.
Although it is one of Kogan’s largest competitors, you can’t invest in Retravision – it is not available on the ASX. On the other hand, investing in the company wouldn’t be a good idea either. It hasn’t been successful as of late.
It was bought over by NARTA International Limited for an undisclosed sum. The stores that were not bought by the multinational didn’t rebrand themselves.
Should You Buy Kogan Shares?
Kogan is probably a good name to invest in at present. The Covid-19 pandemic has been taking the world by storm, affecting several businesses which have resulted in a drop in the price of stocks.
Kogan runs a portfolio of businesses, so the pandemic didn’t affect it as badly. It was a smart move on Ruslan’s part to invest in fields that are here to stay, such as insurance companies, which had to work even when the world was under quarantine.
Kogan’s success can be seen through its EBITDA and growth margins as well. There has been a steady increase even in 2020’s fiscal year.
When it comes to the retail chain, we talked about all you need to know about it. You are now well aware of how successful it is, and how smart it is to buy and sell its shares.
To make investments, you’ll have to work with online brokers. Make sure that the name you’re interested in is heavily verified. Most options available tend to have resource centers for newbies to pick up the trade faster. The best options would also offer the most thorough education section.