Singapore “Flyer” Of The Week: Super Group


Ser Jing - Super Group First Quarter Results, Strong Brew of Profit (pic)It would probably have been easier to look for hen’s teeth than try to find outstanding stock market performers this week. But even in a down-market there are shares that can shine.

One share that did stand out was Super Group (SGX: S10). That said, you would not have guessed the food producer would even be on the fringes of the Singapore “Flyer” reserve list at the start of the week.

Shares in the food producer kicked off the trading week by dropping 5%. On Tuesday it had recovered some of its poise to register a 3% improvement. By Wednesday things were almost back to normal as the shares shot up 8.5% to $4.18.

On Thursday morning, Super Group climbed another 8% to S$4.50. So, at the time of writing, Super Group is one of the best performing shares in the Singapore market – up 14% on the week. By comparison, the Straits Times Index (SGX: ^STI) is 0.2% higher.

Question is: What has changed during the week that could have caused the company’s market value to swing a couple of hundred million Singapore dollars?

The answer is nothing at all has happened at the company. Super Group is the same today as it was a week ago. I can attest to that – I am drinking its Owl brand instant teh tarik now and it tastes as good today as it did last week.

In fact, it was only last month that the company posted a 24% jump in first-quarter profits on sales that gained 9%. The company attributed the improvement to higher gross margins, thanks to better use of its production capacity.

It would seem that Super Group had unwittingly become a victim of stock market volatility. Volatile share prices are one of the risks that we have to bear as stock market investors. That is why there is a premium for owning shares – the equity risk premium. That is also why the returns from investing in shares beats leaving your money in the bank as cash over the long term – we are rewarded for taking on the risk.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.

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