Q3 was another excellent result, returning +14.59% against the benchmark return of -4.04%.   YTD return for the financial year so far is +77.05%.  My only trade for the quarter was purchasing Webjet.

Kogan again contributed a significant proportion of the return, but the standout in percentage growth was Spirit Telecom, rising 70%.

I am constantly re-evaluating my portfolio to see whether a sell decision is warranted, but haven’t had justification to do so yet, and have lacked a good enough opportunity to warrant freeing up additional cash.

Current portfolio breakdown:

 

KGN: 41.7%

REH: 12.8%

AVJ: 12.6%

DDR: 3.1%

ST1: 8.9%

WEB: 1.6%

FMG: 6.9%

Cash: 12.4%

 

 

Kogan released their HY numbers a couple of weeks back, and did not disappoint.  Revenue, expected to grow at 35%, instead grew at 45.7%. Gross margins improved to 19.4%.  And the dividend was increased to 6.9c per share.  Based on the IPO price of $1.80 just a year ago, this annualises to a dividend yield of 7.7%!

 

Kogan blew the doors off on all metrics, and importantly there is significant upside yet to be realised from their new lines of business such as NBN and Life Insurance.  So far, the Amazon threat is yet to dent their business (not saying that it won’t, just that it hasn’t so far).

 

With this level of upside difficult to quantify, it’s hard to predict when the stock is overvalued.  With current growth rates, Kogan will easily surpass $1B revenue in FY21, and at 20% GP should be earning well over $1 per share.  So even current share price levels of over $9 a share don’t seem too far-fetched.  I continue to hold my full position, even thought it now exceeds 43% of my portfolio.