I have previously written posts about Super Group (read here and here).
It appears that Super Group’s financial is taking baby steps improving (read here). Main weakness appears to be due to weakness in the Thai baht and Malaysian ringgit, and expenditure on advertising and promotional activities for its new products.
I don’t view the currency weakness as detrimental to the financial fundamentals of the company. It is a constant threat, and it fluctuates.
The expenditure on advertising and promotional is only justified in the long run if it bears fruit. This is probably the bane of this highly competitive industry. The initial promotion for new products would be high, however, if the products are welcomed and accepted by the consumers, the long term benefit would be great. And the recurring cost can be reduced.
As the 5 years, EPS growth is -4.47, the trailing PEG would be negative.
However, the free cash flow has been increasing in recent years.
I did a quick intrinsic calculation of the share, it appears that the current share price ($0.775) is below the intrinsic value.
The above intrinsic value is around the same value as the intrinsic value I calculated in Jan 2015 which was 0.9 (read here).
I have started to nibble at this stock.
Super also have strong balance sheet. Use to be loved stock of STI. Now it’s the Unlove stock falling 50% of it’s peak share price!
In those past years, in free preview seminars on value investing; Super was also often quoted by seminar “Gurus” as one example on how one can pick multi-bagger using value investing method.
It has since lost that status. Which to me is great.
Branded Consumer: It lacked the pricing power due to the commodity like product and competition from Nestle.
However, in recent times it has tried to move into more niche products (Essenso and nutritional sector).
Food Ingredients has also been inching up slightly.
I don’t view the currency weakness (Thai baht and Malaysian ringgit) as detrimental to the financial fundamentals of the company.
CW, u r right! Several years ago, I attended a seminar. An auntie also asked the trainer about Super saying this is a super good stock!
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