The Kogan.com Ltd (ASX: KGN) share price has been on a tear in recent months, rising by more than 363% since mid-March.

This strong rally was linked to a series of very positive sales updates. A surge in online shopping during the coronavirus pandemic appears to be one of the main catalysts for Kogan’s boost in sales.

With such a strong recent rise in the Kogan share price, is it still in the buy zone?

Rollercoaster ride for Kogan share price

It’s been a wild ride for the Kogan share price over the past three years. It soared from $1.67 in mid 2017 to reach $9.85 in March 2018. It then trended downward for most of 2018. The Kogan share price then took off again throughout 2019, however it only reached $7.80, still well below where it was in early 2018. The coronavirus pandemic then saw it fall back to $3.79 in mid-March. However, a remarkable rally since then sees the Kogan share price now sitting at $17.56.

Strong recent sales update

Kogan has seen a surge in online sales due to COVID-19 lockdown restrictions. In particular, there has been a much higher than normal demand for home office equipment and accessories such as PCs and laptops. In contrast, retailers with a physical store presence have suffered from a heavy decline in foot traffic. 

Kogan’s soaring growth in onlines sales is clearly evident in its most recent market update.

Gross sales grew by more than 95% during the fourth quarter of 2020, compared to the prior corresponding period. Meanwhile, gross profit grew by an incredible 115% during the same period and adjusted EBITDA grew by more than 149%. Full year FY 2020 adjusted EBITDA has grown  by more than 57%.

Is it too late to buy Kogan shares?

With a 363% rise in the Kogan share price since March, it’s now definitely looking expensive based on conventional financial metrics. Kogan’s price-to-earnings (P/E) ratio, for example, has now climbed to 92. This is well above the S&P/ASX 200 Index (INDEXASX: XJO) average of 19.76.

Despite this, the Kogan share price still remains in my buy zone. I don’t believe this high P/E ratio is too much of a concern, taking into consideration Kogan’s long-term growth prospects. I believe that Kogan is in an ideal position to leverage the rising demand for online shopping over the next decade.

Whilst the current surge in online shopping is unlikely to continue to the same extent, I feel the overall trend towards the online channel for shopping is generally set to continue. Kogan has now entrenched its market position as one of the leading local online providers. It is therefore better placed than most of its competitors to tap into this growing trend in my mind.

More reading

• Why the Digital Wine Ventures share price is surging today
• 3 ASX growth shares that could be long term market beaters
• Are ASX 200 shares about to take off on another bull run?
• What to do if your ASX shares hit a record high
• 4 trends to invest in before August earnings season

Phil Harpur owns shares of Kogan.com ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Kogan.com ltd. The Motley Fool Australia 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.

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This year, ASX bank shares like Commonwealth Bank of Australia (ASX: CBA) and Westpac Banking Corp (ASX: WBC) have found themselves in the spotlight. And not in a good way (as is usually the case).

The coronavirus pandemic and associated economic shutdowns have reminded us all of the banks’ vital role in the economy. Credit and credit growth are both functions of economic growth and work in a self-reinforcing pattern. If people have more money (or at least feel like they do), they are more inclined to borrow from credit providers like the banks. And the more money that is borrowed, the more people feel wealthy — and on and on the cycle goes.

A horrible year for ASX bank shares

But of course, this works in reverse too. And that’s what we’ve been seeing over the course of the year as the pandemic has forced the economy to essentially grind to a halt. As such, it hasn’t been a good year to hold ASX bank shares.

Westpac shares are down more than 25% from where they started the year. National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ) haven’t fared much better. CommBank shares are something of a saving grace, only down around 8% since the start of 2020.

Perhaps this has something to do with the fact that CommBank is the only one of the big four banks not to have delivered a dividend cut in 2020 so far. CommBank was lucky enough to have to record its interim dividend back in February, just before the pandemic struck. Its interim dividend came in at $2 a share, which was in line with its 2019 payout.

In contrast, NAB, ANZ and Westpac were all due to record their dividends in April and May — which ended up seeing Westpac and ANZ ‘defer’ their payments. NAB payed out a 30 cent per share dividend, which was a substantial cut from the previous year’s 83 cents per share interim payout.

But now the chickens are coming home to roost for CBA, and the company is set to soon announce its first post-COVID-19 dividend.

Will CommBank pay a dividend?

According to reporting in the Australian Financial Review (AFR), one investment bank is predicting that Commonwealth Bank will be following the leads of ANZ and Westpac and won’t be paying a dividend at all. The AFR reports that Citi Group is preparing for the bank to defer its final 2020 dividend, citing the fact that it will likely have to bump up its cash reserves as it paid such a hefty dividend back in February.

All of the ASX banks are under pressure from the Australian Prudential Regulation Authority (APRA) to keep dividend payouts relatively low, in order to shore up the financial strength of the banking system in the face of the pandemic.

Further, Citi analyst Brendan Sproules reckons the banks won’t be returning to their previous payout ratios of around 75% until at least 2022.

Other analysts aren’t quite so bearish. The AFR reports that Goldman Sachs is expecting a final dividend from CommBank for $1 per share.

But one thing is for sure — it’s not a great year to hold ASX bank shares.

More reading

• ASX 200 up 0.4%: Banks lower, Newcrest impresses, Coca-Cola Amatil jumps
• Why this leading fundie thinks ASX bank shares are undervalued
• ASX 200 drops 1.1%: Big four banks fall, Resolute rockets, Afterpay tumbles
• Are you ready to invest in ASX shares?
• Are ASX 200 shares overvalued right now?

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The Digital Wine Ventures Ltd (ASX: DW8) share price jumped to a more than five-year high after management released a bullish trading update.

Shares in the small cap tech stock surged 5.4% to 3.9 cents in the last hour of trade when the All Ordinaries (Index:^AORD) (ASX:XAO) and the S&P/ASX 200 Index (Index:^AXJO) eked out a 0.3% gain each.

Management said earlier in the day that its online wine platform WINEDEPOT won another 16 customers in the month of June.

New customer wins

This takes the total number of new sign-ons to 39 in the quarter representing a 111% growth over the previous quarter.

But it’s still early days. The total number of customers on WINEDEPOT stands at 74, although management is putting a positive spin on this by saying it has lots of space to grow.

Only 2.7% of the 2,500 plus wineries are on the platform, while distributors and craft spirits producers in Australia barely register as a blip.

Some of the new customers in the latest quarter include Stoney Hill Vineyard, Brokenwood Wines and Cirillo Estate Wines.

Opening international markets

It’s also interesting to see Chateau Picoron from the famous French region of Bordeaux signing up to the WINEDEPOT service. Chateau Picoron is the first customer from France to use WINEDEPOT.

“The addressable market has also been widened to include tens of thousands of international wineries,” said the company in its ASX statement.

“Included in the expanded market opportunity are approximately 500 New Zealand wineries, which can fairly easily take advantage of the same benefits offered to Australian wineries by using the platform to service direct-to-consumer orders received from Australian consumers.”

Riding the online boom

Online sales of alcohol (and just about everything else) is booming during the COVID-19 pandemic. Stuck-at-home consumers and those wishing to minimise the chances of catching coronavirus are opting to shop online instead.

Alcohol is also seen by many as a way to cope with the fallout from the virus and WINEDEPOT is trying to position itself as a service facilitator.

It’s probably better to be a technology enabler than a wine producer at the moment too. Treasury Wine Estates Ltd’s (ASX: TWE) problems with its US and China operations are well documented.

Revenue model

The cloud-based platform serves as an order management system and logistics solution.

Digital Wines generates revenue from three sources. It collects a trading fee, which is a percentage of the overall transaction.

It also gets paid a fulfillment fee for storing, picking, packing and shipping the order; and a subscription fee that’s based on the number of users and products.

More reading

• Kogan share price up 360% since March. Is it too late to buy?
• Are ASX 200 shares about to take off on another bull run?
• Warning: Investors are betting against these 3 ASX shares
• Why the Santos share price is back on my radar
• 5 things to watch on the ASX 200 on Thursday

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates 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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The Qantas Airways Limited (ASX: QAN) share price has been a positive performer on Thursday.

In afternoon trade the airline operator’s shares are up 1.5% to $3.72.

Is the Qantas share price in the buy zone?

While I do see value in Qantas shares at the current level, the recent spike in coronavirus cases in Victoria has increased uncertainty materially.

In light of this, I would class its shares as a hold at this point and suggest investors wait for trading conditions to improve before investing.

One broker that is also sitting on the fence is Goldman Sachs. This morning the broker retained its neutral rating and lifted its price target to $3.82.

What did Goldman Sachs say about Qantas?

Goldman Sachs is confident that Qantas will remain the dominant airline on the other side of the pandemic and expects its profitability to eventually return to previous levels.

Its analysts commented: “We can have a reasonable degree of confidence the airline and its profitability will return to pre-Covid levels at some point in the future when the market has settled; however we have very limited certainty that this can and will be achieved over a medium-term (2-3 year) time horizon.”

It also notes that the near term is full of uncertainty. Goldman commented: “The near-term market size is highly uncertain, with long-haul international markets likely to remain effectively closed and the trans-Tasman and domestic aviation markets constrained by quarantine restrictions.”

The broker acknowledges that a recovery in domestic activity could underpin a substantial earnings recovery. It estimates that Qantas’ domestic services (both Qantas and Jetstar) represented ~55% of calendar year 2019 earnings before interest and tax.

However, it has concerns over the recent spike in inspections. Noting that a coronavirus spike “on the east coast golden triangle routes mean that a fluid resumption of air travel is unlikely in the near term.”

In light of this uncertainty, it holds firm with its neutral rating.

One travel and tourism share that it does like is Sydney Airport Holdings Pty Ltd (ASX: SYD). This morning it retained its buy rating and put a $6.73 price target on the airport operator’s shares.

More reading

• 4 trends to invest in before August earnings season
• Top brokers name 3 ASX 200 shares to buy today
• Should infrastructure be part of your investment strategy?
• 4 exciting ASX biotech shares surging higher today
• Market close: ASX 200 falls 0.5%

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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The DroneShield Ltd (ASX: DRO) share price has surged 25% today after the company announced a contract with the United States Air Force.

DroneShield awarded US Air Force contract

Earlier today, DroneShield released an announcement informing the market the company has been awarded a contract with the United States Air Force worth approximately US$200,000. Under the contract, DroneShield will supply multiple units of its ‘DroneSentry’ integrated detect-and-defeat systems to the Grand Forks Air Force base in North Dakota, US. According to the company, its DroneSentry technology was chosen because of its artificial intelligence software and tracking/defeat automation.

The contract marks DroneShield’s first US Air Force deployment and allows for additional units to be ordered after the original contract is fulfilled. DroneShield’s management expressed the strategic significance of the contract that will provide the company with the opportunity to expand its solutions in the key market.

How has the DroneShield share price performed?

DroneShield is an Australian based company that specialises in drone security technology. The company’s security solutions are designed to protect people and critical infrastructure from intrusions by drones. DroneShield built its hardware and software from the ground up and has an extensive pipeline of solutions. The announcement of DroneShield’s contract with the US Air Force follows the company’s quarterly report which was released yesterday.

DroneShield provided an update on its activities for the fourth quarter of FY20. This was highlighted by the company finishing the quarter cashflow-positive, with cash inflows of $2.1 million. As a result, the company recorded its first ever quarter in which operating cashflows were approximately breakeven.

DroneShield highlighted a substantial increase in US government business, with the company also working towards a formal contract in the Middle-East. DroneShield also noted the impact of COVID-19 on its operations, with the pandemic interrupting the company’s operations and logistics. 

At the time of writing, investors have driven the DroneShield share price 25% higher for the day, with the company’s shares currently trading at 15 cents.

More reading

• 3 ASX growth shares that could be long term market beaters
• Buy and hold Cochlear and these ASX shares for strong long term returns
• Are ASX 200 shares about to take off on another bull run?
• Why the Cogstate share price soared 78% higher today
• What to do if your ASX shares hit a record high

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Are you looking to add a few growth shares to your portfolio? Then you might want to consider buying the three ASX shares listed below.

I believe all three have the potential to grow very strongly over the next decade and could provide strong returns for investors.

Here’s why I would buy these ASX growth shares:

a2 Milk Company Ltd (ASX: A2M)

The first ASX growth share to consider buying is a2 Milk Company. I continue to believe that the infant formula and fresh milk company can grow materially in the future and drive strong returns for investors. This is due to the increasing demand for its infant formula in China and its relatively modest market share in the lucrative market. This should be supported by the expansion of its fresh milk footprint and potential earnings accretive acquisitions.

Kogan.com Ltd (ASX: KGN)

Another ASX growth share to consider buying is Kogan. Although this ecommerce company’s shares have been on fire over the last few months thanks to a spike in sales and customer numbers during the pandemic, I don’t believe it is too late to invest. I believe Kogan is well-placed to continue its strong growth over the next decade thanks to the growing popularity of its website, more spending online, and its acquisition plans.

Pushpay Holdings Group Ltd (ASX: PPH)

A final ASX growth share to look at buying is Pushpay. It is a fast-growing donor management platform provider for the faith and not-for-profit sectors. After smashing expectations in FY 2020, Pushpay has provided guidance for more strong growth in FY 2021. Pleasingly, its strong growth looks unlikely to end there. Management is targeting a 50% share of the medium to large church market in the future. This represents a US$1 billion opportunity and is many multiples of its current revenue.

More reading

• What to do if your ASX shares hit a record high
• 4 trends to invest in before August earnings season
• Analysis: Is the A2 Milk share price a buy before August?
• Got $1,000? You should buy 1 of these 6 ASX shares
• How you can take advantage of the surging Australian dollar

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There are a number of investment strategies for investors to choose from, but my favourite remains buy and hold investing.

It is one of the simplest investment strategies and sees investors buy high quality shares that have solid long term outlooks. They then hold onto these shares for long periods of time (unless the investment thesis breaks) and let the power of compounding work its magic.

With that in mind, here are three quality ASX shares that I think would be great buy and hold options:

Cochlear Limited (ASX: COH)

Cochlear is a global developer, manufacturer, and distributor of cochlear implantable devices for the hearing impaired. I think Cochlear would be a great buy and hold option due to the ageing populations tailwind. The World Health Organization estimates that there will be almost three times more people over the age of 65 by 2050 than there were in 2010. As hearing fades as we age, I expect this to lead to demand for its industry-leading cochlear implantable devices growing strongly over the next three decades.

IDP Education Ltd (ASX: IEL)

I think it would be worth buying and holding IDP Education shares. It is a provider of international student placement services and English language testing services. I’ve been very impressed at the way the company has been performing over the last few years and expect more of the same over the next decade once the pandemic passes and the industry returns to normal.

SEEK Limited (ASX: SEK)

I think that SEEK could be a fantastic buy and hold investment option. I’m very positive on the job listings company’s long term outlook due to the strength of its core ANZ business and the growth potential of its international operations. This is particularly the case with its China-based Zhaopin business. Given its strong position in a massive market, I believe Zhaopin has the potential to underpin strong earnings growth over the next decade.

More reading

• Vocus and 1 other top quality ASX share to buy right now
• Why Mesoblast might be the best ASX healthcare growth share to own right now
• What you need to know about Downer’s share price, $400m cap raise and acquisition
• Is the SEEK share price in the buy zone?
• 5 things to watch on the ASX 200 on Monday

James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and Idp Education Pty Ltd. The Motley Fool Australia has recommended Cochlear Ltd. and SEEK 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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The S&P/ASX 200 Index (ASX: XJO) is having a pretty ho-hum kind of day. At the time of writing, it is essentially flat at 6,087 points.

We seem to have struck both a floor and a ceiling for investor sentiment. The ASX 200 has been playing jump rope with the 6,000 point threshold for nearly 2 months now – since it (for the first time since March) hit the psychologically-important milestone in early June. We still remain around 15% off of the pre-crash highs we were seeing back in February.

But reporting in yesterday’s Australian Financial Review (AFR) reckons we might be about to take off on another ASX 200 bull run. Why? Because the federal government has just cleared a massive cloud of uncertainty that might have been holding the markets back.

On Monday, the government announced that its supportive JobKeeper and coronavirus supplement payments are to be extended. JobKeeper will continue on until at least 28 March 2021 (albeit at a lower rate that will come in 2 tiers). Meanwhile, the coronavirus supplement that most other welfare recipients (including those on JobSeeker or Youth Allowance) are receiving will be trimmed to $250 per fortnight come September, down from the current $550.

What does this mean for ASX 200 shares?

The economy is not well right now. Nearly a million Australians are unemployed and it’s these government payments that are holding the economic fort. So up until Sunday, ASX 200 investors and businesses were fearing a ‘fiscal cliff’ in September. This is when the extra payments were due to expire — creating a lot of uncertainty in the markets.

Now that we have the certainty of knowing these payments will be extended and tailored, the AFR is predicting “institutional investors [will] start deploying the cash sitting idle because of uncertainty”.

However, the AFR also notes this may not be a good thing for ASX 200 shares in the long term, pointing to what it sees as “signs of a bubble in certain parts of the market”.

It quotes the legendary investor Warren Buffett:

“Once a bull market gets underway, and once you reach the point where everybody has made money no matter what system he or she followed, a crowd is attracted into the game that is responding not to interest rates and profits but simply to the fact that it seems a mistake to be out of stocks. In effect, these people superimpose an ‘I-can’t-miss-the-party’ factor on top of the fundamental factors that drive the market.”

Pertinent words indeed from Mr Buffett.

Foolish takeaway

I think the AFR makes some cutting insights here. I do think it’s possible that the markets will push higher from here. But remember, the economy is still very damaged, and the government can’t prop it up forever. Keeping this in mind over the next year or two would be advantageous for all investors in my view.

More reading

• Warning: Investors are betting against these 3 ASX shares
• Why the Santos share price is back on my radar
• 5 things to watch on the ASX 200 on Thursday
• ASX 200 drops 1.3%, Resolute Mining soars
• Top brokers list the latest ASX small cap stocks to buy today

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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