Thanks for the info. So Synlait does not have any consumer end products? Who is taking Synlait's milk powders? Are they mostly foreign dairy consumer product makers, whose products won't be impacted by this crisis at all?
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Well today is the day, that yesterday we worried about,and all is well.!!
So true percy and there must be a bit of Winston Churchill in that quote.
Not sure where the quote came from,but have remembered it.
I thought on Sunday night SML share price could drop below $2.To see it was down only 1 cent reminded me of the quote.
"Remember, Today is the tomorrow you worried about yesterday" Dale Carnegie
Awesome performance from SML since the Fonterra botulism scare ... stock is actual up 7c I think. I thought $2.71 ( may have been $2.74 ) was the closing price on the Friday afternoon before the weekend Fonterra announcement , SML dropped to $2.60 the next morning but ever since then buyers have been pushing the price back up. Really impressive.
Disc: hold 74,875 SML
Another very impressive week & a new record closing high tonight ... 292c , a whopping 72c above the IPO price or 32.7% !!
Stunning performance and with the lack of sellers we may be above $3 this time next week.
Little interest on this blog tells me very few people own SML so who knows how high it could go ...
Disc: hold 74,875 SML
Fab , White Gold guys, Chai, boiling milk witha teabag thrown in, and stirred with a cinnamon stick; Milk-ings. I hold considerably less than both of you combined ;hee.
This should be a great long term hold. More exciting (and volatile perhaps) than boring retirement stocks . Liquidity good too.
I'm a happy holder
Small volume!!!!
Oh dear , just as i thought , this is turning into a bit of a bun fight ... 305 bid , best offer 314 , and all sorts of pushing and shoving going on in behind.
"COME ON PEOPLE ... BEHAVE YOURSELVES" !!!
Disc: hold 74,875 SML
Only if I held even 10% of what you have... sighs...
The indicative price range for the float was 2.05 to 2.65. It has now gone well beyond the top end of the range. The driver does seem to be popularity and demand, rather than any lift in performance of the company. It must be another 2-3 years before the new plant is up and operating. In the meantime, how much higher than the share price go without the extra production that will come on stream with the new drier, etc. I hold so I am very pleased with the performance of the company, and the appreciation of the share price so far.
Baller,
CNU pay around a 9% fully imputed dividend. The current floating mortgage interest rate is under 6%. There's 3% for free if you can make that work somehow and are willing to risk it with shareprice movements etc. :) :) :)
Disc. Own CNU. Don't bet the farm and don't take this advice :)
CNU is down 2.5% today , that's your dividend vs mortgage rate margin gone in an hour. Borrowing money to buy dividend stocks is a VERY risky game. I would not recommend.
Today's announcement that SML will process more milk than forecast has push the SP over $3.12.
Wish you had not asked me that!!!!!! Do not know!!!
Yet on Yahoo chart the trend is up,the MACD and Relative Strength are both positive.
So I am staying with the trend which is up.No sell signals that I can see.
Where/when the uptrend will stop I don't know. I brought in with the view that SML would be a good investment over the next 5 to 10 years,so I find it very difficult to judge what is fair value at this point in time.
Well done FarmerHamilton,
Certainly has been amazing.
This is a great company in a great industry. Do you believe the current price is justified? Do you believe it still has more to go in the near future or do believe it's starting to get a bit silly?
I don't think any one doubts this will be a justifiably $10 company in a few years. The question is how many years and is this still cheap or is the share price getting ahead of itself?
Who knows.
Disc; don't hold. Accepting donations.
There were some pretty smart cookies running the numbers on this during the IPO process and RoyalFreisland Campina came in and snatched a 7.5% stake at 220c because they obviously were unwilling to pay up to that price for it ( may have been trying to outsmart the Synlait team and trying to bag a bargain ... OUCH !! Expensive mistake now !! ) Well done RF C !!
At 319c I am very comfortable selling although I do think the company has a great future ( I will keep a decent number ). From 220 to 319 in a couple of weeks is a very rapid rise and the higher payout forecast of $7.80kgMS will keep the pressure on to sell product for top dollar. From a few months ago my Synlait investment is now up over $1.05m over both Milk and Farms so I am just playing with profit but to existing holders or potential new investors at $3.19 I wouldn't be rushing in to buy any / more just yet.
FarmerH - Do you intend to buy back in if the price goes down or is your sell down due to a diversification strategy (albeit accelerated due to the share price)?
If so -whats is your re-entry price
If not -I recommend you invest in the physical product of MOA rather than the shares - a much better investment ;)
Hi CJ,
It is a diversification strategy ... we still hold $450,000 in Synlait Milk & Farms after selling $960,000 worth of both over recent weeks. We have reduced our mortgage, have bought shares in the US,UK and Australia and my wife is planning on doing a few spec house builds without the need for bank funding ...
I don't have a re-entry price , I will keep selling if the shares keep rising to maintain our holding at around $400k ( I currently am looking at selling some more Farms shares after the 30% jump in the last few days ).
Only own 4,285 MOA so it is literally a drop in the bucket ( which is full of lovely cold creamy milk ! )
Might be selling some more SML today .... 320 bid , offer side looking very thin !!
324 ... wow! this is just a monster performer at present
Disc: order in to sell 3087 at 328
wowwwwwww congrats!!!
Cheers Percy, I always had the belief that investing in the dairy sector back in 2003 when it wasn't easy to get in and didn't have much interest in the general public's investment attention was the way to go. I could see the demand growth coming from Asia , supply issues out of Australia with the water shortages becoming worse and that NZ would be the "Go-To" destination for the world's leading infant nutrition companies looking for quality milk supply.
Synlait was a little different from Fonterra , I knew the management , I knew Canterbury land was relatively cheap compared to the North Island , and that water was plentiful and easy to get ...
The rest is history really ...
326 .... when's it gonna stop !!
FarmerHamilton, this is unlikely to stop anytime soon. ATM is running over 100 PE on the basis of some unfounded theory. It is a bubble in my view but Synlait still has plenty room to go. The demand is super strong. Don't forget China Bright Dairy wants to rebuild their holding to pre-IPO level and hasn't really started their purchasing yet. The market is booming and I assume it is not too hard for Synlait to eat into Fonterra's market shares. From its recent announcement, the constraint is more on its own infrastructure rather than the market. I was not able to get any shares from IPO (ASB Securities is useless in getting any allocation of good IPOs). But purchased on the market pretty much immediately after its listing, now one of the top three holdings in my portfolio. I wish it doesn't rise too fast so I can free up funds and make it my NO 1 holding with a good price.
This looks to be the float of the year so far and you don't have to be a genuis to see the demand for shares in the Dairy industry here in Godzone. Enjoy the ride !
Just sold another 2000 at 333 ... up 9c on the day , a small number left ( 1087 ) and then I am done selling until next September due to the escrow agreements with the old Synlait shareholders written into the IPO.
Amazing run ... up about 28% from the Monday morning after the Fonterra botulism scare !!
Absolutely enjoy reading about your successes FH - are you able to tell us what your overall gains were over the 10 year investment?
Initial investment in Oct 2003 : $400,000 , also an additional $25,000 investment in 2006
Sales proceeds since May listing of Synlait Farms ( on Unlisted market ) and IPO of Synlait Milk of NZX : $1,053,700
Remaining holding in Synlait Farms (SNLF) : 155,000 @ $1.55 = $240,250
Remaining holding in Synlait Milk (SML) : 64,962 @ $3.30 = $214,374
Net gain $1,083,324
Hey Farmerhamilton, what is the agreement you mentioned in your post? How much do you need to sell and is there any timeline? How much shares would be forced to sell on the market like this? It basically means there are some artificial selling pressure and once this is removed, it will go up even faster.
Post the IPO existing holders were allowed to sell a maximum of $300,000 worth of shares ( using $2.20 as the divisor ) in the period up to the release of the 2013/14 results expected next September.
Disc: I have sold my allowed number and now MUST hold the balance until this time next year.
On behalf of all of us, may we offer a warm welcome to the buyer at $3.38, and congratulate the person who brought a small parcel of SML at $2.40.
ditto Percy
and lets not forget those who just joined at $3.50. What a ride!
Looking very thin on the sell side. Good times.
When is their annual result due out? I think it may be next week. If so, todays increase could be people speculating on a good result and good outlook.
Or fear of missing out on what everybody else has been getting.... Jump on!
Disc still accepting donations of SML shares
352 ... result due any day now . Amazing !!
I think Emirates Team NZ were 8-1 up when someone last posted on this thread !!!!
Annual results out , look good , beat prospectus forecasts despite missing sales volume on the high margin infant formula due to Chinese red-tape.
Shares unmoved on $3.30
Glad to see I'm still well within the top 75 shareholders
I can't sell Percy. The escrow agreements forbid me selling anymore shares now until this time next year when the 2014 results are released.
C'mon Team NZ ... I'm a nervous wreck at present and need a decent nights sleep !!!!!
Just wonder how EPS of 19.74 cents is calculated. Given NPAT is $11.5m and number of shares is 146,341,197. My calc is EPS at 7.9 cents.
Their largest single supplier ( Synlait Farms Ltd ) is in a trading halt on Unlisted .... v interesting !!
SML shares looking rock solid at 335c
Disc: hold 64,299 SML and 128,000 SNLF
Yes .. to justify a trading halt it would have to involve a pretty big cap raising ... many holders of Farms are big holders of Milk so if its a "hand in pockets boys" type cap raising , ie rights issue ... watch this space.
This may have something to do with the strength in SML today
WCB recommends Saputo bid of $7 per share
- Business Spectator
- October 08, 2013 11:47AM
WARRNAMBOOL Cheese and Butter Factory has recommended a takeover bid from Saputo, Canada's largest dairy processor, after earlier spurning an offer from local rival Bega Cheese.
In a statement to the Australian Securities Exchange, WCB said it had entered into a takeover bid implementation deed with Saputo, which will make an all cash off-market takeover offer of $7 per share for all shares on issue, valuing WCB at $392.7 million.
The offer is subject to conditions including Foreign Investment Review Board approval and a minimum acceptance condition of more than 50 per cent of WCB shares.
The companies have agreed WCB may declare and pay fully-franked special dividends of up to a maximum of $1.31 per WCB share, with a corresponding reduction in the offer price, on Saputo reaching specified relevant interest thresholds in WCB.
This would enable distribution of franking credits that could deliver up to an extra 56 cents per share in value.
The WCB board unanimously recommended the offer and each director and executive intends to accept the offer for all shares they hold, the group said.
WCB has agreed to exclusivity restrictions that stop it from entering discussions with any competing bidder, and must also pay a break fee if the board changes its recommendation.
WCB directors last month unanimously recommended shareholders reject Bega's offer of 1.2 Bega shares and $2 cash for each WCB share, saying the $320 million offer was inadequate.
Saputo believes its offer is highly compelling and said excluding any extra value from franking credits, the all-cash offer price represented a 21 per cent premium to the implied value of Bega's offer, based on Bega's share price on the last trading day before its offer was announced.
Saputo said its offer also gives WCB shareholders the certainty of 100 per cent cash for their shares and fewer conditions than the Bega offer.
The bidding war comes as companies vie to supply Asia's growing appetite for diary.
The suitor said its strategy in the acquisition is to position WCB as the centre of its operations in Australia and its main platform to service demand for dairy in the Asia Pacific region.
Saputo said it can assist WCB's future development and accelerate its growth nationally and internationally, which should lead to a greater demand for milk and benefit WCB's suppliers.
- See more at: http://www.theaustralian.com.au/busi....Chp0akpO.dpuf
344 +10
No US Government shut-down effect here !!
360 ¢ (NZD) 15 4.3%
10/10 10:38 NZT
What's going on Farmer Hamilton ?
Wished I had more !
Cheers
RTM
White gold is only part of it wait till Lactoferrin kicks in.
I can't sell any until Sept'14 due to the escrow clause in the IPO so I will just sit and watch until then. I guess the very fact that so many shares can't be sold by all the larger shareholders and a large chunk of the IPO went to long term institutional holders such as ACC or the SuperFund, and index trackers who need to actually buy more as the price keeps rising means the demand/supply equation is pretty tight!!
I would love to see $4+ by this time next year.
Market Cap us now over $530m !!!
Best guess-timate for Synlait Milk of payout for 13/14 season is now .... $9.00 !!!!!
Info gleaned from Synlait Farms takeover documents received today. Holy Cow the NZ economy could go ballistic and RB will be raising rates sooner rather than later.
Hard to say , you would think it would make it tough to hit the budget but prices for the end product such as AMP,SMP,WMP are obviouslt incredibly strong so as long as margins are maintained it should be win/win for everyone. It will certainlt provide incentive for their suppliers to glean every last drop of production from the herd over the rest of the season ... I imagine the price of feed/supplements is climbing rapidly at present as farmers look to building stocks for the late summer / autumn period. A decent summer with good rainfall and the numbers going into the NZ economy could be eye-watering !!
Interesting!. lets hope, as you say, it is a win,win situation!
Cheers kiwigold
from the NBR on Friday:
"New Zealand shares rose, led by retirement developer and operator Metlifecare and milk processor Synlait after MSCI announced the stocks be added to its Global Small Cap Indices at the close of Nov. 26, increasing demand for the stock by professional investors who track the global benchmark."
Best Wishes
Paper Tiger
Wow , end of day $3.95 on good volume too.
You realise you're talking to yourself here Kiwigold , dont you!
Yeah but nevermind at least we're happy, beats HNZ hands down!!
Happily sold my SML at $3.85 as I thought ratios were stretched.
Will continue to hold HNZ as I see better value in them.Trading at approx NTA, while SML trades about four times NTA.I don't expect SML to pay a dividend for some time while HNZ are paying an excellent dividend.
Forward growth prospects are good and steady for SML, all the potential in the world, but we seem to be pretty fairly valued now about here I think too.
SP has been tracking at an extraordinary rate of 108%pa since the IPO, well above forward revenue growth rates, and my FA is providing me with a HY14 valuation of $3.85
The trend is your friend so long as it tracks the same direction and at the same rate as the fundamentals.
DISC: Caution
I thought the shareprice was getting a bit ahead of itself too, but as you say endless potential here and the company seem to be on track to meet their forecasts and are investing heavily in increasing production .
But I think its overseas money that keeps pushing the shareprice higher and with that influence $4 looks a cert.
Late News Item from stuff.
"Synlait Milk to beat targets"
Looks like this was the reason for todays high closing price. We'll see what happens tomorrow.
Still holding 64,299 .... but the ones I sold below $3 ... wish I could have those back !!
Projected profit of SML.
As per prospectus; $19.67 mil = eps .1344cents gives a PE of 28.87
As per prospectus,plus 20% ;$23.60=eps .1613 cents gives a PE of 24.05.
As per prospectus plus FarmerHamilton's $15mil;$34.67=eps .2369 vents gives a PE of 16.38.
No dividend forecast.Market cap.$567,803,844.
Projected profit of HNZ $34mil to $37mil
PE either 9.93 to PE 9.12.Dividend 6cents,yield 6.98% Market cap $337,596,938.
So SML is valued at $230mil more than HNZ,is earning less [even with FarmerHamilton's extra $15mil of earnings] and is not paying a dividend.
I think SML is a fine company,that is why I brought into them,it is just as I posted earlier that I thought ratios had got a bit stretched,so I sold.
Not 100% sure how many kgMS they will process this year. Fonterra announcement was probably worth between 50-70c / kg MS of milk solids processed to SML ... at 30,000,000 and 70c my $10-$15m might be more like $21m at the top ed of my very rough calculation. SML are 100% powder ... no cheese ( AMF is cream by-product which pricing is extremely firm ) and Fonterra made specific mention that they make too much cheese and not enough powder to achieve maximum return on each litre of milk processed.
SML just traded at 420c ... almost a double on 220c IPO now !!
Still holding 64,299
Yes, but they have already announced ( 30/08/13 ) that they will process more milk than the prospectus forecasts and every extra litre I am guessing could be worth quite a bit of extra $$ to them , especially now that they are "having Fonterra for lunch" on the product split revenue per tonne.
The 2013/14 profit could be a real BLOW-OUT of huge proportions in the right direction ... a few years ago it was in the wrong direction on half the volume and cost a heap !!
Holy cow !!!
Percy. They're always said it will be a number of years before they even consider paying a dividend. FirstNZCap. had a price target of $4.00, before the latest announcement. Hope the weather in Christchurch is as good as up here in Auckland, and all the cows are grazing contentedly in lush Canterbury pastures.
I was mentioning dividend as I thought it was important when I was comparing SML to HNZ for Kiwigold.
Looks as though First NZ Cap are right ,again.!!!
Bit of wind here today.Suppose to have showers,but have not seen them yet.Also suppose to get to 27 today,which will be a hot for the cows too!!!.Next few days are for hot dry conditions.