The Kogan.com Ltd (ASX: KGN) share price has been experiencing a very strong rally. After dropping as low as $3.45 in mid-March, Kogan shares are now trading at $8.75, a massive 153.6% increase. In comparison, the S&P/ASX 200 Index (ASX: XJO) has seen a much more modest increase during this period.

So, is it too late for investors to take a stake in Australia’s largest locally-based, online specialist retailer?

Strong March quarter and record customer growth in April

Kogan released a trading update in April indicating that it saw a very strong 30% increase in gross sales and a 23% jump in gross profit during the March quarter. The final month of March saw particularly strong growth, with sales increasing by more than 50% on the prior corresponding period (pcp). The company also experienced its largest-ever monthly increase in active customers since its IPO.

Kogan revealed that it was able to successfully navigate through the disruptions caused by the coronavirus in all of its key markets.

Due to the harsh lockdown restrictions, there has been a surge in online spending at specialist retail sites such as Kogan and Amazon. In particular, Kogan has seen a strong rise in the sales of home office equipment, such as PCs and laptops, as well as home fitness equipment.

This ramp-up in sales accelerated further in the month of April, with sales growing by more than 100% in April compared to the pcp.

Profits during April were even more impressive, with gross profit growing by more than 150% and adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increasing by more than 200%. This boost in sales during April meant that Kogan’s adjusted EBITDA was up by a very impressive 40% financial year to date compared to the same period last financial year.

This strong result was achieved despite the company heavily investing to build its brand, with overall operating costs increasing by 37% during the March quarter. 

Kogan continues to invest in its proprietary marketplace platform. It revealed that its pipeline for new sellers in the Kogan Marketplace remains strong and continues to grow despite its rapid onboarding of new sellers.

Is it too late to invest in Kogan?

With Kogan’s recent share price rally, I don’t think it offers investors compelling value at present, but it is still worthy of consideration as a long-term buy and hold option.

Kogan remains well-placed to leverage the growing adoption of online shopping, the increasing popularity of its Kogan-branded products and in particular, its fast-growing Kogan Marketplace.

Additionally, the company’s expansion into a broad range of verticals, including internet, mobile, energy, credit cards, super, travel, insurance and cars, provides it with a diversified business model and a wide range of future growth opportunities.

More reading

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• How to invest $1,000 like Warren Buffett today
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth

Motley Fool contributor Phil Harpur owns shares of Kogan.com 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.

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Telstra Corporation Ltd (ASX: TLS) shares have outperformed in 2020 despite broad market volatility. While the S&P/ASX 200 Index (ASX: XJO) has fallen 19.91%, Telstra shares are ‘only’ down 12.57% this year.

But despite holding value better than many of its ASX 200 peers, is the Aussie telco in the buy zone?

Why I’d buy and hold Telstra shares for a decade

Telstra has been a staple of Australian share portfolios for decades. The Aussie telco was favoured for its 100% dividend payout policy before slashing it lower in recent years. However, its shares currently yield a tidy 3.20% and, I believe, still have some serious upside.

Telstra is shaping up as a potential leader in the 5G network space. The group continues to invest heavily in the future which I think is key in this hyper-competitive industry. With NBN Co breathing down its neck, Telstra is focusing strongly on maintaining market share.

Innovation is also a key reason I’d buy and hold Telstra shares for a decade. The company’s ‘Telstra 2022’ strategy illustrates forward thinking and, furthermore, the group is also focused heavily on slashing its costs. 

Having said that, the changing face of its competition has the potential to negatively impact Telstra’s profitability. The proposed merger between TPG Telecom Ltd (ASX: TPM) and Hutchinson Telecommunications (Aus) Ltd (ASX: HTA) is shaping up to be a real threat to Telstra’s long-term future. 

The merger would combine Vodafone‘s and TPG’s capabilities and create another major player alongside Telstra and Optus. However, there is also the opportunity for Telstra to capture more market share amid an industry shake-up.

This means shares in the Aussie telco could see some real gains if its Telstra 2022 strategy pays off. Given its strong dividend yield in the short to medium term and a solid long-term growth outlook, I think there are worse buys than Telstra.

I also think the move towards working from home more could benefit Telstra. More remote working means increased demand for mobile infrastructure, which could benefit this market leader.

Foolish takeaway

Telstra shares have fallen lower in 2020, but it’s important to invest for the long-term. I prefer to drown out the day-to-day noise and look at Telstra as a company to buy and hold for the decades ahead.

More reading

• How to invest $1,000 like Warren Buffett today
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth
• David Tepper believes we’re in the biggest stock bubble since 1999

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra 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 Australian economy has just recorded its biggest monthly job losses since records began in 1978.

Today the Australian Bureau of Statistics released its employment data for the month of April. This was the first month which fully captured the impact of broad-based lockdowns implemented late in March.

According to the release, the 594,300 jobs were lost from the economy in April, bringing Australia’s unemployment rate to a seasonally adjusted 6.2%.

This compares to the 550,000 jobs that economists were expecting the economy to lose last month and the 450,000 jobs that Westpac Banking Corp (ASX: WBC) was forecasting.

Hours worked plunge.

Due to initiatives such as the JobKeeper program, this data doesn’t truly show the extent of the damage to the economy.

Arguably a more accurate representation is using the hours worked metric. The Australian Bureau of Statistics revealed that total hours worked fell by around 9.2% between March and April.

It commented: “When taken together with people leaving the workforce, around 2.7 million people (about 1 in 5 people employed in March) either left employment or had their hours reduced between March and April.”

As a result of this, the number of underemployed people rose by 603,300 people in April, to a total of 1.8 million people. This means the underemployment rate now stands at a record high of 13.7%, up 4.9 percentage points.

The Australian Bureau of Statistics also revealed a sharp increase in the underutilisation rate. This combines the unemployment and underemployment rates and rose to a record high of 19.9% in April.

In a press conference Prime Minister Scott Morrison acknowledged that this is a “tough day for Australia.”

He commented: “Almost 600,000 jobs have been lost. Every one of them devastating for those Australians, for their families, for their communities. A very tough day.”

But the Prime Minister remains optimistic on the future, saying: “Hard work, that’s the way out. It’s always been the way out for us. Australians hurting today, they can look forward knowing, on the basis of our national character and ingenuity and resolution, that we will see those better days.”

More reading

• What happens to ASX shares if Australian house prices do fall 30%?
• This is the best ASX big bank stock you can buy right now
• How can the ASX 200 soar with rising unemployment?
• Safe dividend stocks to buy today for the COVID-19 world
• 3 top ASX 200 shares you can buy on sale today

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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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