Sold out of Destiny Media (OTC BB: DSNY.OB)@ $0.45 today. In the comment thread to the previous post, Paul Price brought up some points I had been thinking about for a while, and which I had discussed with other commenters here on previous occasions. The last two quarters have established Destiny as a viable company, and one that I think may be consistently profitable going forward. But do its future earnings justify its current price? I don't know. As I noted in the comment thread of the previous post, with an inherently high margin business, profits should grow nicely, but they are starting from a low base. At $0.305, having a feel for the stock, it looked cheap ahead of what I expected would be a positive report, so I increased my position by about 50%; at $0.46, I'm not so sure. I took advantage of the high volume today to exit at $0.45.
I still like the company's story, and I expect it will post relatively impressive numbers in its upcoming fiscal Q1 (seasonally, its strongest quarter), but I got the sense from the reaction of some Destiny longs to the guidance the company issued back in October that some of them had overly optimistic ideas about the company's growth potential next year. Some seemed to assume that the sequential growth the company had predicted from Q4 to Q1 would continue at the same clip going forward. They also seemed to ignore that Destiny's fiscal Q2 is its weakest seasonally.
I'd like to see what that Q2 looks like. Depending on those results, I may buy back into this if the price looks attractive relative to my sense of the company's forward earnings prospects.