Agree. DSK is one of the most undervalued stocks on the ASX, which in turn is one of the most undervalued stock markets globally.
Not sure though, that doubling the store footprint from this point would pay - not in Aust anyway. I think they are getting close to market saturation. This is perhaps what is weighing on the SP (in addition to recessionary times). The market wants to see GROWTH. I think a better strategy would be to expand the product range into other related gift and homewares lines.
They are making their first tentative steps in overseas expansion with 3 stores in Auckland. However, discretionary retail is even tougher in NZ than it is in Aust, so will be interesting to see how that goes. After NZ it is hard to envisage where else they could go. The main possibilities - Nth America, the UK, and Europe - are all far away, and quite different markets from Aust/NZ (and from each other). The UK would probably be the the most receptive market, but the cost of doing business there is particularly high. The US would probably have the lowest cost of doing business, but market acceptance might be a barrier, especially as there is already a well established retailer in the space (Yankee Candles). Canada might be our best bet.
But even just a return to normal domestic trading conditions should see the SP rise substantially.
All IMO.
DSK Price at posting:
96.5¢ Sentiment: Buy Disclosure: Held
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