5 Hot e-commerce stocks for July

Summary

  • E-commerce stocks gathered pace during the last year and quickly became the top performers in the stock market.
  • After the implementation of the recent lockdown in Australia, similar pattern is being observed in the online retail sphere.
  • Five e-commerce stocks to watch out for are Kogan.com, Temple & Webster, Redbubble, Mydeal.com and Woolworths.

Over the course of the pandemic, many e-commerce stocks gathered pace and quickly became the top performers in the stock market. The monumental growth of these online retailers came because of the closure of physical shops and limited functioning of brick-and-mortar businesses.

A similar pattern has been observed again, after the implementation of the recent lockdown in Australia. Customers are turning to online sellers for their everyday needs since lockdown restrictions have restricted movement.

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Some businesses have developed their online platforms to hop on the e-commerce bandwagon. Much of the physical traffic has been deflected to their online platforms. Companies have diversified in all types of retail goods, enabling consumers to depend solely on these online retailers. Here are 5 such e-commerce stocks for the month of July that investors can look at:

Kogan.com (ASX: KGN)

Kogan is the one-stop shop for all types of everyday goods, including appliances, clothes, electronic devices, and sporting goods. Apart from these physical goods, Kogan also provides investment solutions like insurance, superannuation, and credit cards.

Kogan was able to record high growth in the past year, which eventually built up the company’s excess inventory. Thus, the company has had to engage in promotional activity to facilitate the sale of the inventory. This has decreased the company’s overall margin growth, leading to a slowdown in its share price as well.

However, Kogan’s share prices have shown recovery as they rose by almost 7% over the previous month. With that, the company is expected to report EBITDA between AU$58 million and AU$63 million in FY21.

Temple & Webster Group (ASX: TPW)

The online furniture retailer was one of the top gainers amid the pandemic when work from home provisions were implemented. The work from home setup proved to be beneficial for TPW as excessive demand for office supplies started pouring in.

Temple & Webster could change the game for many customers who could permanently shift to online shopping even when restrictions are not in place. This could potentially pave the way for higher growth in the books of Temple & Webster.

Additionally, the firm may look at potential acquisitions in the coming future, securing an edge over competitors. The company’s stock market performance needs some good news to kickstart its journey towards higher growth, as seen last year.

In FY20, Temple & Webster saw annual revenue increasing by 74% to AU$176.3 million, while the company’s EBITDA shot up 467% to reach AU$8.5 million.

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Redbubble Ltd. (ASX: RBL)

One of the star performer of the pandemic ridden months, Redbubble has come a long way off from its initial highs. The company’s share prices have been on a decline over the last 6 months. However, the company may once again see an uptick in its share price as demand picks up in the current scenario.

The company’s revenue growth over 1H FY21 was a monumental uptick of 96% making it an investor favourite during the initial months of the pandemic. However, the Redbubble magic started to disappear as restrictions were eased.

Evidently, the current months see Redbubble positioned for high growth and could potentially see the stock soaring to its 2020 highs. Maintaining a low margin for some time could help Redbubble lock-in the same gains as last year.

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Mydeal.com.au Pty Ltd (ASX: MYD)

Mydeal has taken cues from its fellow e-commerce retailers to become one of the fastest growing online businesses in 2HFY21. The company reported record results during the second half of FY21, with its sales more than doubling.

The company recorded continued growth in active customers to reach a customer base of 894,225 by June 30th, 2021, a figure never seen before by the firm. The massive jump in customers allowed Mydeal to lock in sales worth AU$218.1 million during the 6 months.

The company has also benefitted greatly from the launch of its mobile application. This has translated into an almost 13% increase in the company’s share prices over the last month. The company plans to retain its customer base through super product quality and by providing enhanced shopping experience.

Woolworths Group Ltd. (ASX: WOW)

Woolworths is originally a retail business with stores sprawled across Australia and New Zealand. The firm is associated with Australia’s biggest retail brands and its performance remained considerably efficient even during the pandemic.

Woolworths is a retail giant with a share price of AU$37.89 per share. The company’s share price rose 3% over the previous month. Additionally, Woolworths recorded group sales worth AU$16,566 million for the 13 weeks till 4th April 2021.

Woolworths’ demerger with Endeavour Group, initially announced in 2019, materialized over the past few months. The company’s share prices took the news positively. Experts suggest that Woolworths share price remains positioned for growth owing to the company’s strong performance and the demerger.  

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