Kogan.com Ltd

KGN Details
Growing customer base and new product categories: Recently, Kogan.com Ltd (ASX: KGN) announced about expansion of its range of merchandise into popular home appliances in order to complete with Appliances Online. For the first half of the financial year, KGN recorded a revenue of $143.9 million as compared to $104.7 million reported in the year ago period with active consumer growth at 18.2%. This revenue has exceeded prospectus 1H17 forecast (provided on a full-year basis only) by $20.6 million. Gross margin stood at 18.0% as compared to 15.1% earlier. Meanwhile, pro-forma trading EBITDA stood at $7.3 million as compared to $2.6 million. The group has successfully deployed IPO proceeds into Private Label inventory. KGN is also trying to leverage data, analytics and long-term investments in systems to continually better understand the customers. The group’s personalisation engine delivered about 5% of total website sales in 1H17.
 

Active  Consumer Growth (Source: Company Reports)
 
In the past three-months’ trading session, KGN recorded a 24.44% growth in its stock price (as of March 14, 2017) and we believe there is further room for growth. Given the solid performance, Kogan.com has forecasted Pro Forma Trading EBITDA of between $10.5 million and $11.5 million for FY17. The stock rose 2.67% on March 15, 2017. We give a "Speculative Buy" recommendation at the current share price of – $ 1.72
 

KGN Daily Chart (Source: Thomson Reuters)

Woolworths Ltd

WOW Details
Fresh product approach and expanding penetration: Woolworths Ltd.’s (ASX: WOW) 1H 17 revenue from continuing operations rose 2.6% while revenue from discontinued operations slipped by 11% against the prior corresponding period. Profit from continuing operations after tax attributable to members dropped down by 16.7%. On the other hand, there has been continued momentum in Australian Food with comparable sales growth of 1.9% in the half year and 3.1% in Q2’17. WOW also reported for improvement noticed for Voice of Customer, Voice of Team and Voice of Supplier. There has been progress in store renewal with 26 completed in HY17 and 41 Front End upgrades. The cash conversion during the first half has helped the group reduce its net debt compared to the prior year with the sale of the Fuel business expected to strengthen the balance sheet post completion. WOW declared an interim dividend of 34 cents per share, which is a drop of 22.7% on the prior year with the interim payout ratio being consistent with prior periods. However, a 1.5% discount will continue to be offered on the Dividend Reinvestment Plan (DRP). WOW recently launched South Africa’s first retail branded Marine Stewardship Council (MSC) certified tuna. Canned tuna has been a particular challenge as only 16% of the entire world’s tuna catch has met the certification requirements of the MSC. WOW launched an internal app to all its meat and fresh food departments that allows store managers to reject products that don’t look good enough to sit on the shelf, or that might spoil quickly, as part of a wider crackdown on wastage. We maintain our “BUY” rating on the stock at the current share price of – $ 26.35
 

WOW Daily Chart (Source: Thomson Reuters)

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