Insights

Why the Kogan (ASX:KGN) share price is sinking 5% today

Kogan is ending the month deep in the red…
The post Why the Kogan (ASX:KGN) share price is sinking 5% today appeared first on The Motley Fool Australia. –

The Kogan.com Ltd (ASX: KGN) share price looks to have run out of steam on Wednesday.

In late morning trade, the ecommerce company’s shares are down 5% to $12.15.

Why is the Kogan share price under pressure today?

While there has been no news out of the company today, there are a number of potential explanations for the weakness in the Kogan share price.

The first one is the fact that today is the final day of the financial year, which often sees plenty of tax-loss selling.

Tax-loss selling involves selling shares that have incurred a capital loss, which may then offset capital gains realised throughout the financial year. So, with the Kogan share price down 18% over the last 12 months and 37% since the start of the year, it is a prime candidate for tax-loss selling.

What else could be weighing on its shares?

Another potential explanation for the decline in the Kogan share price today is profit taking. After all, prior to today, the company’s shares were up a massive 25% since the start of June.

Investors have been fighting to get hold of its shares due to the recent outbreak of COVID-19, which has led to lockdowns across several states.

This bodes particularly well for Kogan which recently revealed that it had excessive inventory and was struggling to shift it. With millions of consumers forced online again this month, Kogan may be able to bring its inventory under control sooner than expected.

Is this a buying opportunity?

Despite its rampant rise this month, analysts at Credit Suisse still see a lot of value in the Kogan share price.

The broker currently has an outperform rating and $17.93 price target on its shares. This implies potential upside of 47.5% over the next 12 months.

Credit Suisse believes the headwinds Kogan is facing are only temporary and remains positive on its longer term growth prospects.

The post Why the Kogan (ASX:KGN) share price is sinking 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 May 24th 2021

More reading

Got cash to invest? Here are 2 ASX shares that could be buys

ASX 200 flat, e-commerce ASX shares soar, Metcash rises

2 beaten down ASX 200 shares that could be buys

These are the 10 most shorted shares on the ASX

The Kogan (ASX:KGN) share price jumped 10% this morning

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!