Old Town Berhad and Super Group - different state of affairs

Super Group dropped another 3-4% on 15 May 2015. So i shout with GLEE, YES! Having bought at $2.95, why am i happy when it closed at $2.84 the next day? Shouldn't i be a bit affected  if not emotional? Actually, i exaggerate and i am not happy but i am definitely not emotional and i stand ready to buy. 

Firstly, looking at the number of short sellers,

15 May 2015 - Volume of  transacted shorts 630,685

14 May 2015 - Volume of transacted shorts 421,000

12 May 2015 - Volume of transacted shorts 90,000

09 May 2015 - Volume of transacted shorts 70,000

08 May 2015 - Volume of transacted shorts 173,000

It is obvious that this price plunge is due to people playing the market and not due to the long term fundamentals of the company.

Secondly, my partner- in -crime alerted me to a somewhat opposite state of affairs across the Straits of Malacca in our friendly neighbourhood of Malaysia, Truly Asia. Old Town Berhad's shares has been acquired by Artisan International Small Cap Fund ,Matthew International Capital Management and Mawer Investment management pretty aggressively since March 2014. And Old Town Berhad is a direct competitor of Super Group especially after Super Group ventured into the cafe business under the brand of Owl Cafe (link.).( The other one is VizBranz but it has been taken private some years ago and it doesn't have cafes).

Old Town doesn't have better ratios , more of comparable ratios to Super, if not lousier than Super Group slightly.(Bloomberg Mobile) So, why are funds buying into Old Town? A logical answers would be there must be some value in this FMCG space.

Super Group

P/E - 16.55

P/B - 3.29

P/S - 2.88

Div yield-3.17%

Old Town Berhad

P/E - 19.29

P/B-3.22

P/S-2.58

Div yield - 1.44%

I am taking a risk, yes. Let's wait to see if there is any announcement over the weekend of any news.Not too long ago (Jan 2014), Bloomberg ran an article of possible acquisition of Super by Suntory or Kirin. , with many analysts reports placing target prices of $4-6. Now, they are reversing their target prices, after the FACT. Really lame. Maria, get me a cup of Nanyang White Coffee. You give me more value than these analysts!

Super Group - A Home Grown Company Getting Shorted

Super Group dropped about 8-9% on 14 May 2014. They released their financial statements on  12 May 2014 and frankly, it wasn't a very bad set of results. Revenue decreased 6% and profit reduced 19% and dividends were XD on 9 May 2014. This drastic plunge in price perked my attention, especially when i do enjoy their products such as their Super Charcoal Roasted White Coffee.

I looked at their dividend policy and it looks good, with the Super Group management committing at least 50% of net profits to shareholders and furthermore, the recent $0.07 dividend is higher than the previous same period amount of $0.051 which could possibly point to a higher annual dividend this year than last year. 

Yearly revenue, net profit and dividends has been steadily increasing and gross margin is about 38%. This company has very low debt-to-equity ratio and with $94.7 m in cash, it is able to nearly fully repay all its liabilities (current and long term)  of $99.6m so why the steep plunge in price in just one day?

Could it be a Muddy Waters kind of event ?

Looking at the  daily short sell report, my questions were answered. Yes there indeed are people shorting this company. RSI chart shows a very deep selling. AND SHARES SHORTED MUST BE BOUGHT BACK EVENTUALLY.

If this was a S-share, i would think there is a very high chance that something scandalous has happened and the risk for me is just too great. Given that Super Group is a Singapore- based company with most of its higher management residing in Singapore and that i do actually like their products and most importantly, i do see with my own eyes their products being sold in all supermarkets and them venturing into the cafe business at Bedok Point, Republic Plaza and Star Vista, under the brand name Owl, i bought into their shares, my virgin ownership @ $2.95, giving me a dividend yield of about 3.05% ( based on last year's annual dividend amount of $0.07). It's 52 week high was $5.05 btw.

Hope i will be 'ji' happy like this viral marketing video by OWL-Super Group. Let's Support Home Grown Singapore Companies!