Q: I have owned KXS for several years and although I am not unhappy with its performance it is rather volatile. DSG which is in a similar business seems to experience more price stability. I am ok with volatility and tend to hold equities for the long term. Using long-term growth prospects and current valuations as a guideline would you favor one over the other to any great extent? Taxes are not an issue so I could easily switch to DSG if the metrics suggest this is the better stock.
Appreciate your insight.
Paul F.
Appreciate your insight.
Paul F.
5i Research Answer:
DSG is twice as big as KXS which can help its stability. Both are expensive on earnings, both are well-run, both have potential and both have very strong balance sheets. We do like KXS, but would be OK with a tax-free switch as DSG looks to have much higher EPS growth over the next two years (50% vs 20%).