DSK should be $5 by now

DSK should be $5 by now.

I was already suspicious when there was an influx of good news every time the share price had a little pullback.

• Early June - Sam Koch of WAM states, "Dusk is a strong buy for us. We really like it because we see multi-years of earnings growth ahead of it."
• End of June - Motley Fool recommends this stock after DSK slowly pulls back. Stock shoots up to around $3.90.
• Mid-July - Price drops slowly to $3.50 and suddenly Livewire recommends the stock, and stock peaks at over $4 - an all-time high, where it has slowly tanked from then on. Small articles sprinkled here and there recommending the stock during this period.

Guessing this is where allegedly, WAM begins their huge sell-off.

Their reasoning was "swapping out COVID winners for losers". Ironic as COVID lockdowns were a huge driving factor in Dusk’s recent success.

But of course, in saying that, the strength of the business is not due to the COVID factor alone. Dusk has consistently shown growth throughout the years. Now I'm not saying this was a pump or dump... Just a little coincidental. Do I believe in this company?

Absolutely. I’m a frequent customer and have a loyalty membership.

The products are beautiful and reasonably priced. The $10 two-year membership is a steal. People talk about their candles but I would say their reed diffusers are my favourite from them. Incredible scents and not too overwhelming. I remember visiting the website in 2017… I don’t think they even had online shopping -- it was just an online catalogue to browse products. I remember thinking this is way too expensive. Okay, I’m just going to shop somewhere else. Fast forward to 2021 and I discover how much cheaper their products have become, and a much more extensive range too -- I guess we should thank our current CEO for that.

What I hope to see for the future:

• Dusk selling its products through different retailers: our competitor brands like Glasshouse, Ecoya, MOR. They’re sold in places like Myer and Adore Beauty. Easy to do some other shopping and just pop a candle in your cart.
• Although not sure how this would work since the membership reward is exclusive to the Dusk website and is a big selling point.
• Maybe they could offer exclusive products to other retailers and then sell different products on their websites -- like candles in exclusive scents only for Myer. That way, the sales won’t compete with one another.
• Expansion of products - I want to see more homeware please. Every time I shop at Dusk I regret that they don’t sell any artificial flowers or plants.
• Those would sell out in a heartbeat and go so well with a candle/diffuser purchase. Perfume, bath/body products, hand sanitisers, with Dusk’s signature scents? Yes please.
• International expansion: I think Dusk would do well in New Zealand, China and Singapore. I am not so sure about the US because of all the competition.
• Either Dusk prices would need to be dirt cheap or market themselves in a more desirable way than other US brands.

Am I just mad that they did this stock dirty and this stock is so under-valued? Yes.

I’m worried because newcomers will see the steep downtrend of DSK on the chart and avoid buying it, regardless of all the research they do. The FY21 results and dividend will definitely push up the price but by how much?

Many frustrated buyers who entered at $3.50 and above might just use that chance to get out because of the uncertainty. It must be a horrible feeling buying a stock because of the great news and then it plummets from massive sell-offs.

I messaged Peter King on Linkedin last night voicing my concerns about how the share price is moving and public sentiment. I think he just forwarded me to the investor relations centre as I got this generic reply.

“dusk is currently in a “communications blackout” which commenced on June 30 and will end on Friday August 27 when the FY21 results are released to the market. As such, we are not in a position to communicate with the market and in turn to shareholders (both retail and institutional) during this period.”
Guess that’s why DSK has been so quiet.

Looking forward to the FY21 results next Friday. Too bad I have to work and won’t be able to listen in on the conference.

I have no doubt the results will be good. Just hope the market wakes up one day and realises Dusk's potential.