Super Group

Anyone know whats the reason for the sharp drop in Super's prices?

(12-11-2013, 09:34 AM)heifien91 Wrote: Anyone know whats the reason for the sharp drop in Super's prices?

Poor result release and likely some brokerages' downgrade?

The detail of the 3Q result. May be mostly due to missing expectation...

Super Group sees 3Q net profit fall 33% to $19.5 mil

Super Group, the manufacturer to 3-in-1 beverage products, reported net profit for 3Q13 ended 30 September 2013 slipped 33% to $19.5 million from $23.6 million in 3Q12 due to higher other income and a share of profit of associated in the corresponding quarter a year ago.

In 3Q13, sales improved 2% to $133 million from $130 million. Gross profit margin for 3Q13 improved marginally to 37% from 36%. Branded Consumer sales fell 3% to $86.9 million but Food Ingredient sales grew 13% to $46.1 million from $40.97 million.

The previous corresponding quarter of 3Q12 saw an Other Income of $2.3 million and a $1.1 million share of profit of associated and joint venture companies.

The “other income” arose mainly from the gain of disposal of an overseas subsidiary company’s fixed assets.

Excluding the above effects, net profit for 3Q13 would have declined marginally by 3% due primarily to higher general and administrative expenses as well as higher selling and distribution expenses arising from continued brand transformation campaigns.
http://www.theedgesingapore.com/the-dail...5-mil.html

down close to 10% today, painful for investors who had paid to high PE for super

another 10% today. Hope not many here are affected by this

all of a sudden, shareholders realise this company is grossly overvalued??? Hmmmmm....

I think this is called 'back to reality'. Even with the current drop, shares trading at a PE of 18+x. Not cheap unless you're willing to believe its going to be the next Nestle.

(13-11-2013, 10:28 AM)sunrocker Wrote: all of a sudden, shareholders realise this company is grossly overvalued??? Hmmmmm....

Could be short sellers?

(13-11-2013, 02:05 PM)NTL Wrote:

(13-11-2013, 10:28 AM)sunrocker Wrote: all of a sudden, shareholders realise this company is grossly overvalued??? Hmmmmm....

Could be short sellers?

I looked at it today, good NAV growth, good cashflow, good earnings growth, low debt, high ROE ROA, high net profit margins

The financials are perfect.

but at a rolling PE of 21, i am not going to buy it!
investors have already paid well in advance of its future profits.

Just a personal investment exercise.

For Super group, my personnel feel is ascribing a PE of 12-14 is fair value for the company. Hence using the above figure current "market is pricing Supergroup at a rolling PE of 21x". This means Mr. Market is expecting its earnings to grow by 50% in the near term (2-3 yr timeframe).

Hence to me the investment question: Is the current price under or over-valuing Supergroup; If you think the coy is capable of growing more than 50%, one should consider investing. However, if you think earnings will not grow by 50% in the near term (as what the market is pricing), Supergroup is overvalued at current prices.

Secondly, you must ask if anything in its balance sheet will be realised soon (aka spinning off or sale of an asset)