Why the Kogan.com Ltd share price jumped 7% today

The Kogan.com Ltd (ASX:KGN) share price jumped 7% this morning, bringing its year-to-date return to 63%. Here's why…

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The Kogan.com Ltd (ASX: KGN) share price has been one of the biggest movers on the market today, rising 7% to $2.19.

This brings the e-commerce company's year-to-date gain to an impressive 63%.

What happened?

This morning Kogan provided the market with a trading update which revealed that the company had a strong fourth-quarter.

According to the release, strong trading momentum continued in the quarter with the business exceeding its revised management budgets and producing net operating cash flows of $9.9 million.

As a result, the company finished the year with a cash balance of $32 million, up from $23 million at the end of the previous quarter.

Should you invest?

As I mentioned yesterday, I have been very impressed with Kogan's performance since listing on the ASX and feel management should be commended.

As well as this, I feel its move into providing mobile phone and NBN plans is a great way to diversify its business.

But the elephant in the room remains Amazon. Although nothing has been confirmed as of yet, the retail behemoth is widely believed to be planning an Australian launch in the very near future.

I believe an Amazon launch could have a significant impact on Kogan and fellow retailers JB Hi-Fi Limited (ASX: JBH) and Harvey Norman Holdings Limited (ASX: HVN).

So as much I would love to invest in Kogan, I'm going to sit on the sidelines and wait to see what impact Amazon has on its business in the coming 12 to 24 months.

Motley Fool contributor James Mickleboro has no position in any 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 Bruce Jackson.

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