Oldtown: Large funds are for easy to be understood companies

Usually large funds may seem to be going after difficult companies - in actual fact, they are not. Fidelity made large investments into Jobstreet only to reduce its holdings upon announcement of the sale to Seek.com. Just announced, Oldtown is invested by Franklin, a fund managed under Franklin Templeton (one of the largest funds in US).

Oldtown may seem to be complex but in actual fact it is a very easy to be understood company. It is one of the better performing IPOs of recent times and for a company to reach its current size in a short period of time, it is no easy feat. Recently, Oldtown has experienced a stagnation in revenue and income but over the long run I suspect it will be able to adjust itself. Oldtown is no doubt the type of company which I like - still.

Because South East Asia is one of the few pockets of growth for many foreign companies, typically companies such as Oldtown would be an attractive target for them. Over the last few years, companies like Heineken over its purchase of Asia Pacific Breweries, insurance companies in looking for targets in South East Asia, it would not be a surprise if over time some of these brand names are acquired at a high PE premium.