Unfortunately, DUSK trades in the consumer discretionary retail...

Unfortunately, DUSK trades in the consumer discretionary retail sector. For those who have been long term investors in this sector you know that you just have to accept the fact that this may never trade at a high PE ratio. The upside is it could be a nice little dividend earner.

Remember we are looking at embarking on the first cycle of interest rate rises in over a decade. Alot of new traders have entered the space in that time will not have experienced the challenges to consumer discretionary products if times get a little tough as rates increase.

In saying that if people need to make cuts to discretionary spending and stay close to home to accommodate higher loan repayments then maybe spending money at Dusk to keep their home a pleasant environment to do so could see Dusk continue to benefit.

For any of you who have been long term holders of retail stocks like HVN you will know the potential value in holding these type of stocks is the ongoing dividend payout.

In regards to DUSK specifically for me the real appeal is in the low share count, good cash flow and numerous opportunities (pipeline) to maintain margins. As such, one would hope this rewards long term holders with some above average dividend returns with the potential for CG if they are able to significant increase these returns for a sustainable period.

For those looking for “significant” SAAS like CG that ship might have sailed if we enter a cycle of interest rate increases.

Of course it can not be discounted and if we use HVN as an example it will have it short moments in the sun every few years where the PE ratio runs into the low teens providing an opportunity to also ST trade the stock. So hold long enough and you might be able to hold and trade once a pattern is established.

Just keep in mind that these stocks are great for providing a continuous income for institutions needing to produce returns on an annual basis.

So don’t be surprised to see certain institutions entering and exiting large positions through the year to collect dividends to pay out their members.

I did top up this week but will watch now as there are to many geopolitical issues that need to settle down. I am also wary of the technical correction the ASX entered today so it’s anyone’s guess where the bottom may be especially, if it looks like we could enter a bear market.

Anyway, I am just a random individual sprouting words so please DYOR.