Why do think that Super Group is still good to hold? Your opinions are definitely going to be useful for others :)
This fund Matthews International Capital Management, LLC has just bought 1654,000 shares in Super group. Not sure if it has some info that we do not know about.
On the other hand, I don’t see Thailand economy is going to pick up steam anytime soon and this is one of Super group’s key market. I think it will drop further to $1.00 give us a margin of safety for us to enter.
The company enjoyed good and consistent ROE, Net Profit margin etc for a number of years and now the momentum is stalled. Some of the questions to ask are:
1. Has the investment moat being being breached? by competitors or high cost of sales due to forex?
2. if these factors in 1 is likely to be permanent?
You are right that Super’s momentum has stalled. We bought it back in 2011 because of the growth in their their Ingredient Sales business segment. Currently that segment has remained stagnant and the Thailand market has been affected by political unrest. This resulted in them missing analysts’ earnings estimates. Hence, you can see the share price dropping due to analysts downgrading the stock. Super does have a good consistent ROE and profit margin compared to their peers but at the current price I would personally wait for a wider margin of safety like you mentioned.
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