In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is heading in the right direction again. At the time of writing, the benchmark index is up 0.55% to 7,263.5 points.

Four ASX shares that are climbing more than most today are listed below. Here's why they are rising:

De Grey Mining Limited (ASX: DEG)

The De Grey Mining share price is up 5% to $1.36. This appears to have been driven largely by a broker note out of Macquarie this morning. According to the note, the broker has retained its outperform rating and $1.90 price target on the gold developer's shares.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is up 5.5% to $3.69. Investors have been buying this ecommerce company's shares since the release of its half-year results on Monday. However, one broker that isn't buying is Credit Suisse. It is feeling pessimistic about the company's future given Amazon Australia's significant market share gains and Kogan's inability to compete with the size of its range. The broker expects Kogan to have to focus on a core range to avoid inventory issues, which could limit its growth.

Mayne Pharma Group Ltd (ASX: MYX)

The Mayne Pharma share price almost 7% to $3.36. This is despite the pharmaceutical company reporting a large first-half loss and announcing the cancellation of its proposed capital return. Investors appear to be responding well to news of the sale of its US generics business and management's belief that it is on course to return to profit.

Mesoblast Ltd (ASX: MSB)

The Mesoblast share price is up 4% to 96.7 cents. This morning, this biotech released its half-year results. But as the company is barely generating revenue, it is likely to be a separate announcement that has got investors excited. That announcement reveals that the results from the phase 3 chronic heart failure trial, DREAM-HF, in patients with reduced ejection fraction (HFrEF) highlight the potential for rexlemestrocel-L to make a key difference in patient outcomes, including mortality, heart attack, or stroke.

The post Why De Grey, Kogan, Mayne Pharma, and Mesoblast shares are charging higher appeared first on The Motley Fool Australia.

The S&P/ASX 200 Index (ASX: XJO) are on course to start the week with a large decline. In afternoon trade, the benchmark index is down 1.25% to 7,216 points.

Four ASX shares that have not let that hold them back are listed below. Here's why they are racing higher:

Kogan.com Ltd (ASX: KGN)

The Kogan share price is up 4% to $3.56. This follows the release of the ecommerce company's half-year results. Although Kogan's result was very disappointing, investors appear pleased with its trading update. It achieved a return to operating profit in January, which some investors seem to believe suggests that the worst is now behind the company.

Praemium Ltd (ASX: PPS)

The Praemium share price is up almost 7% to 78 cents. This morning, this investment platform provider released its half-year results and reported a 17% increase in revenue to $35.4 million and a 52% jump in EBITDA to $11.4 million. This was underpinned by a 6% lift in funds under administration to $42.7 billion and margin improvements.

TPG Telecom Ltd (ASX: TPG)

The TPG share price is up 5% to $4.96. Investors have been buying this telco's shares following the release of its full-year results. TPG posted a 1.5% increase in revenue to $4.4 billion and a 354% jump in net profit after tax to $513 million. A key driver of the result was its mobile business, which reported a 300,000 increase in subscribers to 5.28 million.

Weebit Nano Ltd (ASX: WBT)

The Weebit Nano share price is up 8% to a 52-week high of $7.42. This follows the release of a roadshow presentation from the semiconductor company. While the company has made a lot of progress with its product development, it has yet to demonstrate that there is sufficient demand for its technology to command a $1.3 billion market valuation. Buyers will be hoping this doesn't turn out to be another meme stock that ultimately crashes and burns.

The post Why Kogan, Praemium, TPG, and Weebit Nano shares are racing higher appeared first on The Motley Fool Australia.

The Kogan.com Ltd (ASX: KGN) share price has rebounded from a poor start.

In late morning trade, the struggling ecommerce company's shares are up 3% to $3.52.

This follows the release of its half-year results earlier today.

Kogan share price higher despite sales decline

• Gross sales down 32.5% to $471.1 million
• Revenue down 34.3% to $275.6 million
• Gross profit down 41.8% to $62.9 million
• Statutory loss after tax of $23.8 million
• Adjusted loss after tax of $9.6 million

What happened during the half?

For the six months ended 31 December, Kogan reported a 34.3% decline in revenue to $275.6 million.

This reflects a decline in active customers and significant weakness in its Exclusive Brands and Third-Party Brands sales caused by consumers shifting back to in-store shopping following the pandemic. Though, it is worth noting that this didn't stop rival Amazon Australia from growing its sales very strongly during the last 12 months.

One thing that has been impacting Kogan over the last couple of years has been its failure to manage inventory efficiently. It loaded up on stock during the COVID ecommerce boom and was left with excess inventory when shoppers shift back to previous habits.

The good news is that Kogan accelerated the right-sizing of its inventory during the half, with group inventory levels reducing to $98.3 million from $137.9 million at the end of June and $159.9 million a year earlier. This allowed the company to achieve operational efficiencies during the first half. Variable costs fell 39.6% to $59.4 million and fixed costs reduced by 9.9% to $55.5 million.

However, this couldn't stop Kogan from posting a statutory loss after tax of $23.8 million for the half. On an adjusted basis, the company's net loss came in at $9.6 million.

Management commentary

Kogan's under-fire founder and CEO, Ruslan Kogan, commented:

We're pleased to be emerging from a turbulent few years. The ship has steadied, we have a renewed focus on the ruthless efficiency that's underpinned our entire existence, and we have doubled down on delivering great value for customers.

The first half delivered on multiple fronts. We were pleased to welcome 500,000 Brosa subscribers to the Kogan.com community following our acquisition of one of Australia's largest online furniture retailers. Our Verticals, namely Kogan Mobile Australia, Kogan Mobile New Zealand and Kogan Money Credit Cards, grew YoY as we provided services at incredible prices. Mighty Ape saw the successful transition of Gracie Mackinlay to CEO and received multiple awards for exceptional customer service. And Kogan First continued to grow as we delivered more and more value for our most loyal customers.

Outlook

Although its sales were still down 33.2% in January, Kogan managed to record a small EBITDA profit for the month. This was thanks to gross margin improvement and operating cost reductions.

Ruslan Kogan concluded:

We look forward to the second half of this financial year with confidence. We have reset Kogan.com for success, and in doing so, have ensured we continue to delight our millions of Customers during these challenging times.

The post 'The ship has steadied': Kogan share price climbs on first-half results appeared first on The Motley Fool Australia.

The Kogan.com Ltd (ASX: KGN) share price is sinking on Tuesday.

In morning trade, the ecommerce company's shares are down 6% to $4.07.

This follows the release of Kogan's half year update this morning.

Kogan share price drops on half year update

• Gross sales down 32.5% to $471.1 million
• Gross profit down 42% to $62.9 million
• Record loss before interest and tax of $31.3 million
• Active customers down 18.4% to 3,323,000

What happened during the half?

For the six months ended 31 December, Kogan reported a 32.5% decline in gross sales to $471.1 million.

This reflects a 35.7% decline in Kogan Marketplace sales, a 41% reduction in Exclusive Brands sales, a 49.2% fall in third-party brands sales, and a 9.1% drop in Mighty Ape sales.

Things were even worse for its earnings, with gross profit falling 42% to $62.9 million and its loss before interest and tax increasing to a record of $31.3 million. Management advised that this was driven by its soft top line performance along with significant discounting to clear through the bulk of excess inventory.

One small positive is that Kogan's inventory position is improving. It finished the period with inventory in-warehouse 39% lower than at the end of June. Management notes that it has now cleared through the bulk of its excess inventory. As a result, it is expecting margins to improve in the second half.

Management commentary

Kogan's under-fire founder and CEO, Ruslan Kogan, didn't comment on the company's abject performance during the half. However, he revealed that he remains positive on the future despite the current economic environment. He said:

The impacts of inflation and interest rates have begun to affect the lives of Australians and New Zealanders. We've been growing Kogan.com for more than 16 years now, so we've been through many cycles and we know that when customers are watching their costs carefully, ecommerce becomes even more important. Since Kogan.com launched out of a garage in 2006, we've been obsessed with making the most in-demand products and services more affordable. We are proud to be making that possible for our millions of customers and the growing base of loyal Kogan First Subscribers.

As you can see above, the Kogan share price is now down 40% over the last 12 months.

The post Kogan share price sinks on record half-year loss appeared first on The Motley Fool Australia.

The All Ordinaries Index (ASX: XAO) is back in the green on Monday, helped along by shares in these four companies.

They're each starting the week off on the right foot, soaring more than 10% today.

Meanwhile, the All Ordinaries Index is up 0.77%, trading at 7,598.3 points.

So, what's driving the All Ords stocks higher today? Let's take a look.

4 ASX All Ordinaries shares leaping more than 10% today

Leading the All Ordinaries today is lithium share Ioneer Ltd (ASX: INR). It's launching 20.22% right now to trade at 54.7 cents a share.

The stock's gains come amid news the company has been offered a US$700 million loan from the United States Department of Energy to help fund the development of its Rhyolite Ridge lithium-boron project in the US state of Nevada.

The project is expected to strengthen the United States' critical mineral supply chain.

Joining the All Ordinaries lithium share in the green today is stock in Kogan.com Ltd (ASX: KGN). Shares in Kogan are up 12.9% right now, swapping hands for $4.55 apiece.

That's despite no news having been released by the online retailer. In fact, there's been no word from the company since CEO Ruslan Kogan said it's on track to return to its "historic growth trajectory and profitability" in November.

The Bigtincan Holdings Ltd (ASX: BTH) share price is also bolstering the All Ordinaries Index today. It's rising 13.59% to trade at 58.5 cents a share.

The artificial intelligence-powered software provider revealed its annual recurring revenue (ARR) surpassed $130 million in the first half of financial year 2023.

And with that, the tech stock remains on track to reach its full-year guidance of $137 million to $143 million of ARR, between $123 million and $128 million of revenue, and positive cash flow and adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA).

The final All Ordinaries share soaring more than 10% today is former market favourite Zip Co Ltd (ASX: ZIP). Shares in the buy now, pay later (BNPL) provider are gaining 10.25% right now to trade at 67.25 cents apiece.

Like Kogan before it, there's been no word from the company to explain today's gains. Though, it's been on a roll so far this year. The stock has jumped 33% since the final close of 2022.

The post 4 ASX All Ordinaries shares surging over 10% on Monday appeared first on The Motley Fool Australia.

At the time of writing, the struggling ecommerce company's shares are up 2% to $3.34.

Despite this, as you can see below, the Kogan share price is still down approximately 60% in 2022.

Why is the Kogan share price rising?

There have been a couple of catalysts for the rise in the Kogan share price on Thursday.

The first has been a strong showing in the tech sector this morning following a very positive session on the NASDAQ index overnight.

Also potentially giving its shares a lift is news that Kogan has made a new acquisition.

According to the release, the company has snapped up online luxury furniture retailer Brosa just over a week after it fell into administration. The deal will see the furniture brand stay alive and relaunched with the backing of Kogan.

Kogan has paid $1.5 million from its cash reserves. It will also provide logistics support for thousands of customers with undelivered orders.

The release explains that Kogan has purchased intellectual property, goodwill, and stock. However, the deal excludes all leases and other liabilities.

What is Brosa?

Founded in 2014, Brosa is an online luxury furniture retailer with almost 500,000 subscribers that delivers practical design-led furniture without the price tag.

In FY 2022, the business generated revenue of $75 million, largely from its online operations that were boosted by COVID tailwinds. But when these tailwinds eased and consumers returned to bricks and mortar stores, it quickly ran out of cash and was put into administration.

And despite recently being valued at over $60 million and being backed by venture capital investors such as Bailador Technology Investments Ltd (ASX: BTI), as mentioned above, Kogan was able to snap up Brosa for just $1.5 million.

While this low price tag sounds like a bargain on paper, the lack of venture capital interest is something to ponder. As is the prospect of one struggling ecommerce retailer buying another struggling ecommerce retailer. Whether this is a recipe for disaster or a masterstroke, time will tell.

Nevertheless, Kogan's COO and CFO, David Shafer, is positive on the acquisition. He said:

The acquisition of Brosa by Kogan will broaden the online furniture offering of the Kogan Group, providing unprecedented range and value to Brosa customers, while also expanding the range of furniture and homewares available to Kogan customers. We are pleased to be able to offer a lifeline to Brosa customers, to be able to save the Brosa brand, and to relaunch Brosa.com.au very shortly. Following years of investment in brand-building and marketing, Brosa is a well known online furniture brand in Australia, and we are delighted to be able to bring the brand within the Kogan Group.

The post Why is the Kogan share price charging higher today? appeared first on The Motley Fool Australia.

1) The stock market continues to dance to the tune of interest rates, with the S&P 500 falling 0.7% on Friday night as investors bet on central banks staying "higher for longer" as they continue to battle stubbornly higher inflation.

"We think the markets are too sanguine on rates after the first quarter," said Cliff Hodge, chief investment officer for Cornerstone Wealth on AFR.

The Federal Reserve meets this week, and is widely expected to hike US interest rates by another 50 basis points. Such a move would lift rates to a 4.25% to 4.5% target range, the highest level since 2007. Good news for savers. Bad news for the economy and share market investors, although much of the coming downturn is arguably already priced into many individual stocks.

2) The market will turn higher in anticipation of better economic news, be that lower inflation and/or central banks pivoting to hold or even cut interest rates in the latter half of next year.

I do not profess to having any great insights or opinion as to what may happen and when, other than to say – stating the obvious – we're much closer to the end of this rate hiking cycle than the start.

Writing in its November monthly update, New Zealand based Pie Funds are "fairly optimistic about the outlook for 2023," partly because they believe inflation and interest rates have peaked, but mostly because "after such a terrible year history shows poor-performing periods are usually followed by strong returns if you look out 12 months."

I love the simplicity of the thinking. No macro. No talk of soft landing versus deep recession. And it comes despite Pie Funds saying a widely expected general economic slowdown or recession "will impact corporate profits, on average, anywhere from 10-40%."

"Based on 15 years of managing client money, I know that investors won't start to return to stocks until at least six months after the bottom. So that means investor sentiment will remain cautious until at least April," said Mike Taylor, founder and chief investment officer.

3) One of Pie's holdings is little-known IPD Group Ltd (ASX: IPG), a national distributor and service provider to the Australian electrical market.

It is one of the few recent IPOs that is trading strongly above its float price, the IPD share price having risen from $1.20 to its current $2.93 in the 12 months since it hit the ASX boards.

"IPD Group held its AGM during the month and confirmed that strong double-digit growth has continued into 1H23 while margins have been maintained. IPD Group exemplifies the style of defensive growth business we look for with structural tailwinds in electrification, market share opportunities as they expand their portfolio of ABB products, and high levels of ownership by management," wrote Pie's Australiasian Growth Fund portfolio manager Michael Goltsman. 

4) There have been many COVID winners turned losers, most obviously in the tech sector. 

You can take your pick as the poster child for the huge round trip some of these stocks have endured, and just how much their share prices have fallen over the past 12 months…

Zip Co Ltd (ASX: ZIP) share price down 86%

PointsBet Holdings Ltd (ASX: PBH) share price down 75%

Megaport Ltd (ASX: MP1) share price down 69%

Airtasker Ltd (ASX: ART) share price down 62%

Kogan.com Ltd (ASX: KGN) share price down 61%

The share prices of all those companies got well ahead of itself, not to mention being aided by healthy doses of irrational exuberance from locked-down and bored retail investors.

Reality has hit, and hit hard, due to slowing or declining growth, excessive valuations and a market no longer willing to fund losses ad-infinitum. 

One sector riding a genuine post-COVID boom is travel, with demand and prices riding high. The Qantas Airways Limited (ASX: QAN) share price is flying high, up 160% from its March 2020 low as continued strength in travel demand has resulted in profit upgrades.

So you'd expect the Flight Centre Travel Group Ltd (ASX: FLT) share price to also be riding high… except it's down more than a third in the past 14 months. Fellow travel agents Corporate Travel Management Ltd (ASX: CTD) and Helloworld Travel Ltd (ASX: HLO) are also on the nose, their share prices down 45% and 50% over a similar period.

Dragging them lower appears to be lower profit margins as airlines, most notably Qantas, announced during the pandemic they would cut commissions paid to travel agents. 

Adding to sector woes are the prospect of a coming economic slowdown, something that traditionally sees consumers cut discretionary spending on luxury items like travel, and less corporate travel as companies cut costs and continue to use Zoom and Teams for their meetings.

In a trading update in late October, Corporate Travel said FY23 is expected to "remain choppy" but is expecting a "full recovery" in FY24, and underlying EBITDA of $265 million. Compared to today's market capitalisation of around $2 billion, that looks neither cheap nor expensive, but about right, especially given much can change over the next two years.

The post Why this one top fund manager is optimistic about 2023, and one little-known IPO that has hit it out of the park appeared first on The Motley Fool Australia.

Management buying shares of their own companies gives investors confidence that the highly-paid people running the show see value in shareholders' futures.

It also helps incentivise management, ensuring that their financial fortunes are more closely tied to those of their shareholders.

So that might be why the Kogan.com Ltd (ASX: KGN) share price is holding up better than the broader market today. At the time of writing, Kogan shares are up by 0.31% to $3.28 each.

That looks pretty good against the All Ordinaries Index (ASX: XAO). It is currently down by a nasty 0.81%.

Director triples down on Kogan shares

Yes, this week we got the news that Kogan director Janine Allis has not doubled, but tripled her holdings in Kogan. An ASX filing shows that Allis boosted her holdings by 10,000 shares on 5 December.

She paid an average of $3.33 per share. That would equate to an investment of $33,300.

Allis previously owned 4,761 shares of Kogan, so this new tranche of 10,000 shares more than triples her stake in the ASX retail share.

Janine Allis has been an independent, non-executive director at Kogan since April 2021. Previously, she founded the popular juice chain Boost Juice.

So no doubt Kogan investors will be buoyed upon hearing about this large purchase of shares. It's likely to be a much-needed confidence boost, given the company's share price has lost a painful 62.5% of its value over 2022 alone.

At the current Kogan share price, the company has a market capitalisation of $351 million.

The post This Kogan director (and Boost founder) just tripled her holding of Kogan shares appeared first on The Motley Fool Australia.

It's been a good week for ASX fans, and there's been plenty of news to catch their eye.

The S&P/ASX 200 Index (ASX: XJO) has lifted 1.34% so far this week. Meanwhile, the All Ordinaries Index (ASX: XAO) is up 1.2% week-on-week right now. Both indices are currently trading at near-six-month highs.

So, which stocks have been helping to bolster the market? Keep reading to find out.

5 ASX shares making big news this week

Qantas posts shock guidance

Is it a bird? Is it a plane? No, it's a flying kangaroo. The Qantas Airways Limited (ASX: QAN) share price soared 5% on Wednesday after the company surprised the market with a guidance upgrade just months after tipping its first post-COVID profit.

The ASX airline share now expects to reveal between $1.35 billion and $1.45 billion of underlying profit before tax for the first half of financial year 2023. That's $150 million higher than its previous projection.

Kogan eyes historic recovery

Continuing this week's good news, Kogan.com Ltd (ASX: KGN) shares launched 8% yesterday after the company's CEO tipped it to post "historical operating margins during the second half."

That probably had long-term investors jumping for joy. The online retailer's stock has dumped a whopping 85% since its 2020 high.

BWX flags return to trade after 3-month freeze

Recent times haven't been so kind to skin and hair care company BWX Ltd (ASX: BWX), however. Its share price hasn't gone anywhere since August amid confusion over its recent earnings.

But BWX this week flagged its audited earnings will likely drop on Monday, with its share price expected to thaw on Tuesday.

BrainChip surges amid Amazon appointment

Meanwhile, the share price of ASX 200 artificial intelligence company BrainChip Holdings Ltd (ASX: BRN) has rocketed 16% this week.

Its gains came amid news of the company's new chief marketing officer, former Amazon.com Inc (NASDAQ: AMZN) face Nandan Nayampally.

Coal stocks pop, then drop

Finally, the week was also good to ASX 200 coal shares, until it wasn't.

Stock in Whitehaven Coal Ltd (ASX: WHC), for instance, lifted 17% between Monday's open and Wednesday's close. However, Thursday saw it tumble 7%.

That came despite no price-sensitive news from the energy giant. However, coal prices likely played their part.

Additionally, word that Whitehaven managing director and CEO Paul Flynn offloaded $7.9 million of the company's stock might have weighed on its share price yesterday.

The post 5 of the craziest things making news on the ASX this week appeared first on The Motley Fool Australia.

Four ASX shares that are climbing more than most today are listed below. Here's why they are rising:

Kogan.com Ltd (ASX: KGN)

The Kogan share price is up 9% to $3.74. Although the ecommerce company reported a significant sales and earnings decline so far in FY 2023, investors appear pleased that Kogan's under pressure CEO, Ruslan Kogan, is expecting a strong second half. In other news, shareholders voted down the adoption of a new constitution at its annual general meeting.

Nick Scali Limited (ASX: NCK)

The Nick Scali share price is up 10% to $10.30. This follows the release of a trading update at the furniture retailer's annual general meeting. Management revealed that the company expects its first half profit to be 57% to 66% higher than the prior corresponding period. This follows a 74% increase in sales revenue to $194 million for the four months ended 31 October.

PointsBet Holdings Ltd (ASX: PBH)

The PointsBet share price is up almost 4% to $1.95. Investors have been buying this sports betting company's shares after it announced its launch in Maryland. This represents the company's 13th online sports betting operation in the United States market.

Sayona Mining Ltd (ASX: SYA)

The Sayona Mining share price is up 3.5% to 22.2 cents. This follows the release of an update on the company's North American Lithium (NAL) operation. According to the release, the operation is on budget and on track for the recommencement of production in the first quarter of 2023. NAL has nameplate capacity to produce up to 220kt of spodumene concentrate or 30kt LCE per year.

The post Why Kogan, Nick Scali, PointsBet, and Sayona Mining shares are pushing higher appeared first on The Motley Fool Australia.

At the time of writing, the struggling ecommerce company's shares are up 13% to $3.87.

Why is the Kogan share price jumping?

Investors have been bidding the Kogan share price higher following the release of its annual general meeting update.

Kogan's CEO, Ruslan Kogan, acknowledged that its business "suffered" over the last 18 months but was positive that the company is on course to "historical operating margins during the second half of FY23."

That certainly will be a relief for shareholders based on its performance in FY 2023 through to the end of October and ahead of the key holiday season.

Here's a quick summary of how it is performing:

• Gross sales down 38.2% to $267.6 million
• Gross profit down 40.6% to $41.1 million
• Adjusted EBITDA down 104.4% to a loss of $0.5 million
• Net cash position of $20.1 million

Management explained that it does not believe that its abject year to date trading result is indicative of projected trading performance once the final sell-through of excess inventory is completed.

As a result, it is looking to the second half with confidence in its ability to return to an agile, inventory-light business returning strong operating margins. Mr Kogan commented:

Once the final sell through of inventory is completed, we plan to have the Kogan Group return to the historic growth trajectory and profitability that it has been able to deliver. We look to the second half of FY23 with confidence as the Kogan Group returns to being an agile, inventory-light business with strong operating margins.

Time will tell if Kogan delivers on this.

The post Kogan share price jumps 13% as boss touts 'return to historic growth trajectory' appeared first on The Motley Fool Australia.

1. The terminal cash rate for this economic cycle will likely be around 4%. That means the Reserve Bank of Australia (RBA) will be largely done raising interest rates by around the middle of next year.

2. Elements of the equity markets will recover from their recent lows. In the US, I'd be looking at large-cap tech stocks like Microsoft Corp (NASDAQ: MSFT), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), and Meta Platforms Inc (NASDAQ: META). Australia is a little trickier, given commodity stocks have been strong, bank stocks relatively stable, and some tech stocks, even after their shellacking this year, still look expensive.

3. Many stocks will never again reach their 2021 all-time highs. Many former market darlings and COVID-19 beneficiaries would have to 10x from here to get back to where they traded at their peak. It just isn't going to happen. I'm looking at you Zip Co Ltd (ASX: ZIP), Sezzle Inc (ASX: SZL), and Redbubble Ltd (ASX: RBL), and they've got plenty of mates.

4. That said, some fallen heroes will stage remarkable recoveries, rising 300% or more from these depressed levels. I own a few that have taken big tumbles for which I hold out hope of recovery, and in more recent times, I've taken bites in a few beaten-down ASX small and microcap stocks that are still growing quickly.

Recovery hopefuls: Pinnacle Investment Management Group Ltd (ASX: PNI), Aussie Broadband Ltd (ASX: ABB)

Newer bites: Field Solutions Holdings Ltd (ASX: FSG), Alloggio Group Ltd (ASX: ALO), Mighty Craft Ltd (ASX: MCL)

5. The economy will slow as interest rate rises start to bite. This will put pressure on corporate earnings, particularly in consumer discretionary retailers like Harvey Norman Holdings Limited (ASX: HVN), Kogan.com Ltd (ASX: KGN), and Temple & Webster Group Ltd (ASX: TPW). Profit warnings will likely outpace profit upgrades.

6. Even though some companies are likely going to experience falling profits in FY23, in some cases this has already been priced into their cheap stock prices. I'm certainly no energy and commodity stock expert, and I'm always very conscious of their cyclicality, but Woodside Energy Group Ltd (ASX: WDS) and BHP Group Ltd (ASX: BHP) trading on 8 to 10% trailing fully franked dividend yields and on trailing single digit multiples have significant future falls in the iron ore and oil price already reflected in their share prices.  

7. On a trailing basis, some retailers look dirt cheap. At $2, the Dusk Group Ltd (ASX: DSK) share price trades at seven-times profit and on a fully franked dividend yield of 10%. The specialty retailer of home fragrance products didn't provide FY23 guidance given "ongoing uncertainty surrounding the macro-environment". Dusk is capitalised at $125 million, has $21 million cash, and no debt. 

8. If you believe the economy will recover (it always has done so in the past) and corporate profits will be higher three to five years from now (as they have been in the past), and that will translate to a higher stock market in the future (as it has done so in the past), one of the simplest investing strategies and processes is to dollar-cost average into a low-cost exchange-traded fund (ETF).

My favoured option is the Vanguard MSCI Index International Shares ETF (ASX: VGS). Since its inception in 2014, it has returned 11.4% per annum, something that would have turned an initial $10,000 investment into almost $23,000. The ETF holds stakes in large US companies, including Apple, Microsoft, Amazon, Tesla, Johnson & Johnson, and Exxon Mobil. 

If you want to throw in a local flavour, consider adding the Vanguard Australian Shares Index ETF (ASX: VAS). You'll get exposure to the big miners, the big banks, and the big supermarkets.

9. Interest rates will start turning lower around the third quarter of next year as the economy slows in response to standard variable mortgage rates of around 7.5 to 8%. Consumer confidence has already taken a big hit, dropping to its lowest level since April 2020 amid higher interest rates and surging inflation. 

To the points above, discretionary spend – retail, food and beverage, even travel – is about to take a hit.

10. The forward-looking stock market has already priced much of what's coming into the prices of individual stocks. It knows not how far spending will fall, nor how much some corporate profits will shrink. 

Just as the stock market is falling now, despite an economy with near-record-low unemployment, the forward-looking stock market will go higher in the face of a sharply weaker economy. Bad news is good news for the stock market.

In the meantime, volatility is likely to persist. There could even be another bear market from here, where the S&P/ASX 200 Index (ASX: XJO) falls a further 20%.

For stock pickers, use it to your advantage to add to your favourite existing stocks, and to throw a couple of new positions into your portfolio. 

For ETF investors, continue making regular (fortnightly or monthly) contributions, come hell or high water. With annualised returns potentially around the 8% level, an investment made today would double in nine years. 

It reminds me of the Bill Gates quote…

"Most people overestimate what they can do in one year and underestimate what they can do in ten years."

The post These 10 predictions could help you profit from the stock market regardless of inflation, interest rates or even another bear market appeared first on The Motley Fool Australia.

The Amazon share price briefly went lower than its current level in June 2022. That was the bottom of the 2022 decline for many shares but, that said, Amazon hasn't been this low since the worst of the COVID-19 crash.

So why did the e-commerce and cloud computing business drop so much?

Amazon's disappointing update

When a business announces its result, not only are investors looking at the performance of the numbers themselves, but they compare against what analysts expected the business to report. A company could report 50% revenue growth but disappoint the market if it was expected to grow by 75%.

Amazon reported its net sales increased 15% to $127.1 billion. However, the international segment reported sales fell 5% year over year to $27.7 billion but increased 12%, excluding changes in foreign exchange rates.

According to reporting by CNBC, Refinitiv estimates forecast Amazon's revenue would be $127.46 billion.

Amazon Web Services' revenue of $20.5 billion also underperformed expectations of $21.1 billion, according to StreetAccount.

In the fourth quarter, Amazon was expected to generate sales of $155.1 billion, according to Refinitiv. Yet the company said it expected to achieve fourth quarter revenue between $140 billion to $148 billion.

Free cash flow decreased to an outflow of $19.7 billion for the trailing 12 months, compared with an inflow of $2.6 billion for the 12 months to 30 September 2021.

The relatively new CEO, Andy Jassy, said:

There is obviously a lot happening in the macroeconomic environment.  And we'll balance our investments to be more streamlined without compromising our key long-term, strategic bets.

What could this mean for ASX 200 retail shares?

The numbers reported, and the investor reaction, raise some questions. Are online retailers now suffering from the end of lockdowns, with customers going back to bricks and mortar shops?

Is inflation now starting to impact household demand for products? Plus, remember that households have already bought plenty of household goods over the last two years. How many more things can people buy in the short term?

Costs for businesses have also been increasing, meaning that profitability has been reduced.

The Kogan.com Ltd (ASX: KGN) share price has also been pummelled during 2022. While it's not an ASX 200 share, I think it's a good example of what may be happening in Australia.

According to Kogan's update for the three months to September 2022, gross sales declined 38.8% to $202.3 million. At the same time, active customers dropped 12.3% to 3.6 million and gross profit declined by 40.4% year over year to $31.3 million. The company put this down to "lower gross margins following the accelerated sell-through of excess inventory, the vast majority of which the company expects to complete by early calendar year 2023".

A reduction of the share prices of various retailers in 2022 like Wesfarmers Ltd (ASX: WES), JB Hi-Fi Limited (ASX: JBH), Woolworths Group Ltd (ASX: WOW), Harvey Norman Holdings Limited (ASX: HVN), and Premier Investments Limited (ASX: PMV) may indicate similar investor worries about profitability, demand, and inflation.

However, I believe there is one thing going for many of the names I just mentioned. While Amazon's reported period is compared against locked down periods, which boosted e-commerce sales, last year was hurting bricks and mortar retailer sales. The open stores this year can help sales.

Names like Wesfarmers, JB Hi-Fi, and Premier Investments have recently told investors that early FY23 sales are still showing growth. The second half of FY23 may not show growth, but at least the first half can provide some positivity.

The post Amazon stock just tanked. Could this be a canary in the coal mine for ASX 200 retail shares? appeared first on The Motley Fool Australia.

Four ASX shares that have failed to follow the market higher today are listed below. Here's why they are dropping:

Australia and New Zealand Banking Group Ltd (ASX: ANZ)

The ANZ share price is down almost 4% to $24.86. This follows the release of the banking giant's full year results for FY 2022. For the 12 months ended 30 September, ANZ reported a 5% lift in cash profit from continuing operations to $6,515 million. While this was slightly ahead of Goldman Sachs' estimates, its pre-provisioning operating profit "came in 1% lower than GSe, as an in-line NIM performance was more than offset by slightly weaker volumes and weaker than expected performance in Markets income."

Australian Clinical Labs Ltd (ASX: ACL)

The Australian Clinical Labs share price is down 4% to $3.39. This morning this pathology provider revealed that it was the victim of a cyber incident all the way back in February. And despite finding customer data on the dark web in June, it has taken the company until now to tell patients and the market.

Core Lithium Ltd (ASX: CXO)

The Core Lithium share price is down 4.5% to $1.39. Investors have been selling this lithium miner's shares after it revealed that its proposed offtake agreement with Tesla has collapsed. However, the company doesn't appear concerned given the insatiable demand for lithium and its other offtake agreements which account for 80% of planned production.

Kogan.com Ltd (ASX: KGN)

The Kogan share price is down 6% to $3.29. This appears to have been driven by a broker note out of Credit Suisse this morning. In response to the company's dismal first quarter update, the broker has downgraded its shares to an underperform rating and slashed the price target on them by 25% to $2.73.

The post Why ANZ, Australian Clinical Labs, Core Lithium, and Kogan are sinking today appeared first on The Motley Fool Australia.

1) Overnight Tuesday, Wall Street rose for a third straight day on a combination of strong corporate earnings and falling bond yields. Excerpt from Bloomberg…

Investors still expect the Fed to raise rates by three-quarters of a percentage point during its meeting next week. But recent economic data is already showing that Fed tightening has started to weigh on the US economy, leading investors to speculate that the central bank may be approaching the end of its aggressive tightening campaign. This renewed expectation of less hawkishness from the Fed, as well as a better-than-expected earnings season so far, have pushed stocks higher in recent days.

2) Earnings from Coca-Cola and General Motors topped estimates. But the wheels fell off after the market close, with Google parent Alphabet missing earnings estimates and fellow tech-giant Microsoft reporting a disappointing revenue forecast.

In after-market trading, both the Alphabet share price and the Microsoft share price fell more than 6%.

It was only yesterday when I said "earnings risk" might usurp the risk of higher interest rates as the dominant driver of equity markets. 

Most of the heavy lifting has already been done on interest rates. Although there's a lag, the desired effect – a slowing of economic growth – is starting to show up in corporate results. If Alphabet and Microsoft are feeling it, you can bet your bottom dollar companies with much less of a competitive advantage will be paddling upstream.

This bear market rally may be about to run out of steam.

3) Turning to Australia, the ASX 200 is largely flat in afternoon trade, at first following Wall Street's lead higher, then falling back after Q3 headline inflation jumped to an annual rate of 7.3%, higher than expectations.

Naturally, Australian bond yields rose as talk of the RBA raising interest rates by 50 basis points on Melbourne Cup day came back into play. That said, according to the Australian Financial Review, interbank futures are implying only a 25% chance of the RBA hiking by 50 basis points. 

Markets have been hanging on the prospect of central banks slowing their rate of interest rate increases. For the time being, inflation is winning the battle, with equities, despite their recent bounce, coming a long second.

4) Speaking of earnings risk, one of today's victims is Codan Ltd (ASX: CDA), the company best known for its gold metal detectors.

The Codan share price is being taken to the woolshed today after it forecast a significant contraction in first-half sales at its dominant Minelab division. Here's what the company said:

Like many businesses we are operating under challenging market conditions, with geopolitical issues, a high inflationary environment and an increasing risk of global recession. The risk of declining sentiment may impact sales in the short term and management continues to monitor this risk closely.

The company expects sales for Minelab to be in the region of $75 to $80 million in the first half of FY23, compared to $138 million in the prior corresponding period. The reduction primarily relates to the disrupted nature of the African market, normalisation of sales as we transition to living with COVID…

Codan joins a long line of COVID beneficiaries – government stimulus in some African countries was seemingly spent on buying gold detectors – turned post-COVID flops. 

Codan shares are now down 80% from their June 2021 high. Ouch.

5) One of the other high profile COVID boom-to-bust stocks is Kogan.com Ltd (ASX:KGN). 

Unlike Codan, the Kogan share price is on the rise today despite reporting first-quarter gross sales falling 38.8%, cycling a quarter in the prior year that was heavily impacted by COVID-19 lockdown orders, a period when online retailers saw booming sales.

Investors today were buoyed by Kogan accelerating the sale of its final excess inventory, with the ever-optimistic Ruslan Kogan saying he does not believe the first quarter trading result is indicative of its projected trading performance.

Inflation and rising interest rates are putting pressure on households across Australia and New Zealand. It's in the Kogan.com DNA to obsess over delivering the most in demand products and services at the best possible prices. We know that during periods of belt tightening like this, our responsibility to be the best place for Aussies and Kiwis to get a bargain on their key household items is more important than ever.

Good luck to Mr Kogan and his Kogan.com business. Kogan.com shares have fallen 86% from their October 2020 peak, although they have bounced almost 30% higher off their July 2022 low.

Whilst Kogan does indeed compete on price, it's not the only discount retailer on the web. And when belts are being tightened, replacement cycles for cheap TVs and the like just might blow out a little.

6) The consumer discretionary stock I'm playing for the coming economic slowdown is Best & Less Group (ASX: BST). 

50% of its sales are in the baby and kids market. As children grow, they need bigger clothes, so there is a repeat purchase element to the business. 90% of its items sold retail for less than $20 and their average selling price is a modest $8.33.

Best & Less is profitable, has net cash on its balance sheet, and pays an attractive fully franked dividend.

Best and Less shares trade on eight times earnings with a fully franked dividend yield of 9.5%. Whilst not immune to an economic slowdown and having formidable competitors in the likes of Big W and Kmart, there does appear to be a decent level of downside protection for Best & Less shareholders.

The post The bear market rally has seen the ASX 200 jump five percent higher in October. It could all be about to run out of steam appeared first on The Motley Fool Australia.

In morning trade, the struggling ecommerce company's shares up 9% to $3.59.

Why is the Kogan share price jumping?

Investors have been bidding the Kogan share price higher despite the release of a disappointing first quarter update.

It's rarely a good sign when a retail company waits until its second paragraph before mentioning how its sales fared during the quarter. But it isn't surprising that Kogan wanted to focus on other things after finally revealing that "[t]he quarter reflected a period of subdued sales activity."

According to the release, for the three months ended 30 September, Kogan reported a whopping 38.8% decline in gross sales to $202.3 million.

This reflects significant weakness across the business. For example, Kogan reported a 49.8% decline in exclusive brands gross sales to $51.6 million, a 53.2% decline in third-party gross sales to $24.2 million, and a 43.6% reduction in marketplace sales to $62.3 million.

Kogan also reported a 12.3% decline in active customers to 3,596,000 despite a 48.8% increase in Kogan First subscribers.

One positive was that the company has been working through its excess inventory, which has reduced warehouse costs. Though, not enough to stop its earnings from being crushed during the quarter.

Kogan's gross profit fell 40.4% to $31.3 million, its adjusted EBITDA plunged 103% to a loss of $0.3 million, and its EBIT dropped 158.7% to a loss of $4.1 million.

'Optimistic and excited'

Kogan's under pressure founder and CEO, Ruslan Kogan, spoke positively about the future and didn't touch on the company's abject performance. He said:

Great value and choice have never been more important than now. Inflation and rising interest rates are putting pressure on households across Australia and New Zealand. It's in the Kogan.com DNA to obsess over delivering the most in demand products and services at the best possible prices.

We know that during periods of belt tightening like this, our responsibility to be the best place for Aussies and Kiwis to get a bargain on their key household items is more important than ever. While there is a lot of uncertainty in the world, we're optimistic and excited to continue delighting our millions of customers and the growing base of loyal Kogan First subscribers.

The post Kogan share price jumps despite first quarter sales collapse appeared first on The Motley Fool Australia.

The ecommerce company's shares ended the day a sizeable 7% higher at $3.28.

This means the Kogan share price is now up almost 12% over the last two trading sessions.

Why is the Kogan share price on fire?

Investors have been buying Kogan's shares over the last couple of sessions after investor sentiment improved strongly following stellar gains on Wall Street.

This has particularly been the case in the tech sector, where beaten down shares like Kogan have bounced back with some strong gains.

This has led to the S&P ASX All Technology index rising approximately 9% since Monday's close.

Can Kogan keep rising?

Despite its recent gains, the Kogan share price is still down over 60% since the start of the year.

Unfortunately, I'm not aware of a broker that is tipping Kogan as a buy. However, it is worth noting that Credit Suisse sees decent upside for its shares with its neutral rating and $3.66 price target.

Conversely, the team at UBS appear to see its shares as fully valued at this point with its sell rating and $3.15 price target.

The post Here's why the Kogan share price jumped 7% today appeared first on The Motley Fool Australia.

Inflation has risen because of a variety of impacts such as higher energy costs and difficulties in the supply chain.

Central banks are doing what they can to manage and bring down inflation. Low inflation, in the 2% to 3% range, is seen as a good benchmark for stability.

ASX retail shares suffer

Higher interest rates are meant to hurt the valuation of most assets, in theory. That's because the 'safe' return that people can get from cash has risen, so the potential return from 'risk' assets like ASX shares isn't as attractive.

Investors are generally paying a lower multiple for a company's earnings. This can be measured with the price/earnings (P/E) ratio.

But, some companies' earnings are also expected to reduce in this environment. Even in a downturn, households are going to keep buying food from the supermarket and paying their telco bill. But not every sector may be essential to a household's spending.

People may not spend as much at some retailers in this new environment. That's probably why a number of ASX retail shares have been hurt.

In 2022, the Wesfarmers Ltd (ASX: WES) share price has fallen 26%, the JB Hi-Fi Limited (ASX: JBH) share price has dropped 20%, the Harvey Norman Holdings Limited (ASX: HVN) share price has declined 18%, the Reject Shop Ltd (ASX: TRS) share price is down 42%, the City Chic Collective Ltd (ASX: CCX) share price is down 75% and so on.

This year, the Kogan share price has fallen 64%.

Let's recap what was said in the latest report.

FY22 report

The FY22 result did show difficulty for the business, so it's not surprising that investors haven't been positive on the business recently.

Kogan's FY22 gross sales grew by 0.1% to $1.18 billion.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was $18.9 million, which Kogan said fell largely as a result of elevated operating costs from excess inventory after fluctuating demand for online shopping during COVID-19.

Adjusted net profit after tax (NPAT) was a loss of $2.9 million, with a statutory net loss of $35.5 million – this was impacted by "unrealised losses on financial instruments, non-cash equity-based compensation" and other factors.

Is the Kogan share price an opportunity?

There were already positive green shoots that Kogan talked about.

It said that it's looking forward to returning to positive operating leverage, having commenced the process of "driving efficiencies in operating costs and product ranges" which led to a return to adjusted EBITDA profitability in the fourth quarter of FY22.

Kogan First, which is its membership program, is aiming to reach 1,000,000 subscribers in the medium-term. It grew to 372,000 at 30 June 2022.

Fellow Motley Fool writer Sebastian Bowen is still planning to be a long-term shareholder in Kogan shares. In my opinion, there are a few key reasons to be interested in the business.

I think the adoption of online shopping is going to grow over time, which should be a useful tailwind for Kogan. Growing scale should help Kogan's margins, but it could take a while for it to return to pre-COVID profitability levels as it works through its inventory and supply chain challenges, while also traversing the current economic climate.

At this low level, I think the Kogan share price is probably a bargain when thinking about how much profit it could make in FY25. But, investors are likely to see quite a bit more volatility over the next three years, so a long-term mindset could be required.

The post The Kogan share price has tumbled 18% in 2 weeks. Time to pounce? appeared first on The Motley Fool Australia.

While the All Ords has lost more than 12% this year, Kogan shares have gone from $8.62 at the start of the year to the $3.475 they are presently going for. That's a depressing fall of 59.7%.

Perhaps unfortunately, I happen to own Kogan shares. So why am I still holding what looks like a very sharp falling knife?

Kogan was a company that went from COVID hero to post-COVID (not quite) zero on a dime. Back in October 2020, Kogan was a $25 share. Buoyed by rocketing sales during the lockdowns and faith in Kogan's digital-centric sales models, investors couldn't get enough of this pandemic winner.

But the COVID recovery has been Kogan's bane. The company has admitted it made mistakes ordering far too much inventory for the post-lockdown months.

This helped the company to post its first-ever recorded net loss in terms of earnings before interest, tax, depreciation, and amortisation (EBITDA) for the 2022 financial year.

Why am I still holding Kogan shares today?

So why do I still own Kogan shares? Well, I like this company. Its founder and CEO Ruslan Kogan is a driven and savvy businessman. He has built this company from the ground up into the $375 million company we see today. Like many investors, I like seeing a founder at the helm of a company. I think Mr Kogan has what it takes to lead his company out of the rough spot it is currently in.

Unlike most investors, I did not despair at Kogan's FY22 numbers. Although the headline figures weren't pretty, there were plenty of indicators that the worst is behind the company. For instance, even though revenues fell 8% to $718.5 million in FY22, this still represents a compound annual growth rate (CAGR) of 20.1% since FY20.

We also saw some encouraging customer engagement metrics. In FY22, Kogan reported that its 'Kogan First' membership club had grown by 372,000 subscribers by the end of the financial year, giving it a compounded annual growth rate of 51.6% since FY20.

The recently-acquired Mighty Ape business is also firing on all cylinders, recording 783,000 active customers as of 30 June 2022.

So, yes, Kogan has made some disappointing mistakes in recent years. But I think the company's management has learned from them and is positioning the business for far brighter days ahead.

That's why I continue to hold Kogan shares and am confident in their future. Remember, you can't hope to beat the market unless you are willing to make some contrarian bets.

The post 2022 hasn't been kind to Kogan shares. Here's why I'm holding tight appeared first on The Motley Fool Australia.

The Kogan.com Ltd (ASX: KGN) share price put in a strong showing to end the week, charging 4.5% higher today to close at $3.71.

The broader market was also in the green as the S&P/ASX 200 Index (ASX: XJO) climbed 0.7% to finish at 6,894 points.

What's driving the Kogan share price higher?

There's been no news from Kogan, but it could be that positive sentiment towards fellow ASX retail share Temple & Webster Ltd (ASX: TPW) is spreading.

The Temple & Webster share price also felt the love today, capping off the week with a 4.9% gain to close at $5.84.

Temple & Webster hasn't made any recent announcements either. But it was the subject of a bullish broker note out of Goldman Sachs this morning.

The broker has initiated coverage on Temple & Webster shares, slapping on a buy rating with a 12-month price target of $7.55. This represents a potential upside of 29% compared to the current Temple & Webster share price.

Goldman expects the ASX retailer to grow as a structural winner in the shift to online. The broker pointed to Temple & Webster's wide range of products and price points, low-inventory business model, the early stages of e-commerce penetration, and a lack of significant competitive threat over the medium-term as reasons to be bullish.

In the same broker note, Goldman also initiated coverage on Adairs Ltd (ASX: ADH) shares with a buy rating and a 12-month price target of $3.05. This implies a potential upside of 47%.

Kogan's latest developments

Kogan last updated the market when it released its FY22 results. Revenue dropped 8% to $718 million as the company cycled COVID-accelerated growth in the prior year.

Meanwhile, adjusted earnings before interest, tax, depreciation, and amortisation (EBITDA) tumbled 69% to $18.9 million as the company continued to battle inventory woes and elevated operating costs.

Looking ahead, the company is expecting the continued expansion of Kogan Marketplace, including the launch of an advertising platform; growth in Mighty Ape; further growth in Kogan First subscribers; continued strong contribution from exclusive brands; and improved operating leverage.

Kogan share price snapshot

The Kogan share price has crumbled 57% this year, and it's down 65% over the last 12 months.

Kogan's co-founder and CFO David Shafer has seen this as a buying opportunity, recently picking up more shares.

On 30 August, he purchased 150,000 Kogan shares on the market at an average price of $3.38 per share for total consideration of around $500,000.

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