Can Super Group continue its super performance?
If you have bought Super Group during the financial crisis, congratulations, you have got a 10 bagger.Super Group has been disposing its non core assets and using the cash plus cash from placement shares, invested in their new line of business of selling ingredients which have reaped dividends. They are debt free presently and new ingredients lines will start production in the next few years.
However, their share price is too high for my liking. If other companies also learn the trick of producing food ingredients as good as them and muscle into their business, can Super Group sustain its double digit growth in earnings?
Growth stocks like Super Group will ultimately suffer a fall in price drastically not because of poor business but because expectations of their business prospects are too high. Sure, Super Group shares can zoom higher but remember Apple?