I’ve been looking at IPOs recently to see how you would have fared if you had invested in them.

One of the most successful has been the CSL Limited (ASX: CSL). As I revealed here, a $10,000 investment in the biotherapeutics company’s IPO would have left you very wealthy.

A more recent IPO was undertaken by ecommerce company Kogan.com Ltd (ASX: KGN). Let’s have a look and see how successful investing in this would have been.

The Kogan IPO.

Kogan listed on the Australian share market just under four years ago on 30 June 2016. The company’s shares were listed at $1.80 per share, giving it a market capitalisation of $168 million.

This means that if you invested $10,000 into its IPO, you would have ended up with approximately 5,556 shares.

At that point Kogan was generating sales of $200 million and was targeting an increase to $240 million in FY 2017. Fast-forward to today and Kogan is now generating more than both these in just one half. In the first half of FY 2020 the company delivered gross sales of $322.9 million.

And given its strong performance in the third quarter and in April, it looks set to smash records and deliver bumper sales growth this year.

Kogan share price hits a record high.

Unsurprisingly, this strong performance has been reflected in its share price. Earlier today’s Kogan’s shares stormed to a record high of $9.56.

When its shares hit that level, it meant they had gained an impressive 431% since their IPO in June 2016.

This means those 5,556 shares you would have picked up at the IPO would have a market value of ~$53,515. I think that’s an excellent return in such a short space of time.

And let’s not forget that the Kogan story is only really starting. Given the rise of online shopping and the growing popularity of its offering, I suspect there could be more strong returns to come over the next decade.

In light of this, I wouldn’t be cashing in my shares any time soon if I invested in the IPO.

More reading

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• 2 millionaire-maker ASX internet growth shares

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post If you invested $10,000 in the Kogan IPO, this is how much you’d have now appeared first on Motley Fool Australia.

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The share price of Service Stream Limited (ASX: SSM) dropped 6% after giving an update to the market.

Service Stream said that it’s essential network service provider, demand for its services have generally remained strong throughout the coronavirus crisis. However, the company warned there are negative impacts. Those impacts largely relate to delivering safe field-based operations. Also, some clients are temporarily pausing some work programs and some individual minor projects have been delayed.

The company is now expecting earnings before interest, tax, depreciation and amortisation (EBITDA) from operations to be $108 million. It would still be a record operating result for the company. This estimate was able to be done after the conclusion of its April numbers. It also has the benefit of a clearer perspective on the likely impacts of work volumes to 30 June 2020.

Service Stream said its balance sheet, cashflow and liquidity remains “very strong”.

What about the Service Stream dividend?

Service Stream did specifically address dividends. The company said, initially referring to its financial strength: “Not only has this underpinned the Group’s ability to effectively deal to COVID-19 headwinds, but it provides the board with confidence as to the Group’s continuing ability to maintain its commitment to dividends to secure expansion opportunities across the utilities and telecommunications markets as they present.”

Is the Service Stream share price a buy?

Service Stream managing director Leigh Mackender commented: “Whilst it is unfortunate that some clients have had to temporarily adjust or delay aspects of their work programs, Service Stream continues to be in a strong position, with a healthy contracted pipeline of ongoing work across a blue chip client base.

“Whilst it is likely that COVID-19 impacts will continue to be felt into at least the early part of FY21, we will be in a better position to discuss the Group’s outlook following the release of our FY20 results.”

The Service Stream share price is lower than it was in early February 2020, but it’s only back to where it was a week ago. I still believe Service Stream is a quality long-term buy with a solid dividend (which was mentioned today). I’d be happy to buy shares today at the lower share price.

More reading

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• 3 top ASX 200 shares every investor should buy

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Service Stream Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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