Once again, KGN made a majority of the contribution to my returns this quarter, with the stock price increasing 75% this quarter. The portfolio return was +27.11% for the quarter, against the benchmark Vanguard ASX300 index of +6.98%. Removing Kogan the fund still outperformed with a +8.17% return.
I got rid of DTL (After the company downgraded earnings) and JIN (as the company lacks a strong moat and is now approaching non-bargain status at around 20x earnings). The only other change was continued accumulation of FMG, which continues to be priced very cheaply.
While KGN’s current earnings multiple may seem to be ridiculous at 87x (Even factoring revenue growth of 35%+), the additional upside from new lines of business is difficult to quantify. Every time they sign up a new 3rd party agreement (for example, private healthcare), Kogan has a brand new business unit which they can cross-sell into their 8 million customer database with very low cost of sale due to the online nature of the business and high level of automation.
The current portfolio breakdown is as follows: