Christmas cheer is reaching into retail shares like Kogan.
The post Why is the Kogan (ASX:KGN) share price jumping 5% today? appeared first on The Motley Fool Australia. –
The Kogan.com Ltd (ASX: KGN) share price is rebounding on Wednesday from its recent 19-month low.
At the time of writing, the online retailer’s shares are swapping hands for $8.03, up 5.38%. This comes after a prolonged period of downward pressure on the company’s shares as it contends with a slowdown in sales.
The reprieve for Kogan shares follows a strong session for US-listed e-commerce companies overnight. In addition, ASX investors could be eyeing off businesses set to benefit from a Christmas spending spree.
Why are Kogan shares rallying on the ASX today?
The market is looking more fondly upon the ASX-listed Kogan share price today as it marches upwards. While there are no new announcements from the company today, investors could be getting excited about a potentially happy holiday period.
As my colleague Brendon covered yesterday, the Commonwealth Bank of Australia (ASX: CBA) released the results of its latest consumer survey. According to the CommBank Household Spending Intentions Index, retail spending intentions increased 9.6% in November compared to the previous month.
Additionally, CBA noted the strong gain in November suggests a strong Christmas shopping period. Fuelling this year’s silly season is excessive household savings, which the major bank pegs at an estimated $240 billion.
This further solidifies forecasts for pre-Christmas spending as published by the Australian Retailers Association and Roy Morgan. The joint report indicated pre-Christmas retail sales were likely to hit $58.8 billion. This figure is in line with the previous year. However, it represents an 11.3% increase compared to pre-pandemic spending.
For ASX-listed Kogan, shareholders will be hoping the excess household savings will go towards bringing down the company’s high inventory levels. The unpredictability in supply and demand has bullied the Kogan share price since February this year.
While the company noted it had resolved inventory pressures in its October update, it remains elevated from historical levels. The damage to the bottom line over the last year has led to Kogan being removed from the S&P/ASX 200 Index (ASX: XJO). This change will be effective from opening trade on 20 December 2021.
The post Why is the Kogan (ASX:KGN) share price jumping 5% today? appeared first on The Motley Fool Australia.
Wondering where you should invest $1,000 right now?
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.
*Returns as of August 16th 2021
Motley Fool contributor Mitchell Lawler owns shares of Kogan.com Ltd and Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Kogan.com ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.