Kogan.com Ltd

KGN Details
· Exceeded expectations for November and December months: Kogan.com Ltd (ASX: KGN) stock rallied over 8.73% on January 16, 2017 driven by their positive update over the performances in the last two months. KGN has a cash of $26.5 million as of second quarter of 2017. The group was able to deliver a better than estimated performance in November and December months. As a result, the group has already exceeded the full year FY17 Prospectus pro-forma EBITDA forecast of $6.9 million in two quarters of trading. KGN’s inventory investment efforts are reaping benefits while KGN expects better margins for the second quarter of 2017. As of December 31, 2016, KGN inventories reached $41.83 million including $32.27 million of stock in the warehouse and $9.56 million stock in transit. As of December 31, 2016, over 90% of stock in the warehouse was received during 2Q17. KGN witnessed a solid demand for new products during Christmas and this trend continued even after Christmas.

· Recommendation: KGN stock already rallied about 8% in the last five days (as of January 13, 2017) while we give a “Speculative Buy” on the stock at the current price of – $ 1.62

Nanosonics Ltd

NAN Details
· Strong December quarter performance drove the stock higher: Nanosonics Ltd (ASX: NAN) stock rallied over 7.5% on January 16, 2017 driven by the better than estimated December quarter results. NAN reported $18.3 million revenues in the December 2016 quarter leading to a first half of 2017 year on year (yoy) sales rise of 131% to $36.1 million. As a result, even December 2016 quarter generated a cash balance increase of $3.3 million to $56.9 million, against prior quarter, which is the fourth consecutive quarter of positive cash flow. The growing adoption for trophon technology is mainly contributing to this performance. North America’s division total installed base rose 60% to over 10,700 during the quarter. Installed base of NAN has over 12,300 units. NAN is also seeing positive signs in their UK business, as six of the fourteen Scottish NHS trusts started trophon adoption post the announcement of new guidelines in Scotland. Accordingly, the group’s Managed Equipment Service business model is gaining traction.

· Recommendation: NAN stock already rose over 23.53% in the last six months (as at January 13, 2017) and currently trading at an unreasonable P/E. We believe the stock is “Expensive” at the current price of – $ 3.16



Cash outflows for next quarter (Source: Company Reports)

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