World’s Biggest Asset Management Group Buy Into Kogan After Retailer Slammed
Hours after the largest asset management Company in the world, Black Rock Group purchased 4 million shares in online operator Kogan the NSW department of Fair Trading slammed Kogan declaring the online retailer attracted highest level of complaints in February ahead of Apple.
Other States Fair Trading departments are yet to reveal who heads their complaints register.
The big question now is why Black Rock sees Kogan as a key investment with their stake giving them 5% of the voting power in the online trader when the Companies share value has fallen during the past 12 months.
During the past year Kogan shares have fallen 55% according to analysts.
There have been a number of catalysts for the sharp share price decline. These include heavy insider selling, increasing competition, and a softer than expected half year result.
At the same time Kogan had been one of the fastest growing companies on the ASX until FY 2019 according to Motley Fool.
But due to a combination of slowing sales growth, increased investments in its brand, marketing, and operating infrastructure, Kogan reported a disappointing 11% decline in net profit after tax of $7.4 million in the first half.
MF claims that Kogan’s shares are currently changing hands at 25x trailing earnings, which is still a significant premium to the market average.
If the company can return to growth again in the second half and deliver a strong profit result, it could well prove deserving of this premium.
Despite this analysts are warning investors to stay clear of the company’s shares and focus on other options in the retail sector that offer better value for money.
Currently Company founder Ruslan Kogan is in the USA and it’s not known whether he met with Black Rock who often invest in Companies ahead of a sale. At this stage it’s not known whether Kogan is up for sale or whether the Black Rock Group know something that other investors don’t.