Great post BP.
I would never have thought that a lower oil price would lower the milk price.!!
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Great post BP.
I would never have thought that a lower oil price would lower the milk price.!!
Thanks for the summary BP. Shame on those directors who couldn't leave their phones alone, not very professional hey.
Thanks for the feedback from the AGM BP. Really appreciate you taking the time to write it up.
Cheers
RTM.
I'm quite happy with the price action over the last few days. SML has definitely had a trend reversal and I'm glad I picked some up at $2.13 when it all looked pretty grim, overall I've added to my position a few times and I'm now in the black which is nice. I have big hopes for this company and the situation today looks way better than it did when they reported in January. I'm looking forward to a great 6 months, better looking cashflow situation and the set up for a really strong 2016.
any one has a price target for sml this year
Difficult. Analyst consensus was $2.71 last time I checked, but I would expect they update that number sooner rather than later. If you put their forecast EBIT and CAGR into the Graham formula, than it comes up with $5.87.
Personally I would think that the real number is somewhere in between ... if things keep ticking on nicely, than IMHO a "4" in front of the SP towards end of next year might be achievable.
Anyway - just guessing. Don't spend the money before you earned it, DYOR and all these things ...
I think it depends a lot on what NPAT they deliver this year and that they don't disappoint shareholders (2014/15 was a shocker). If they can deliver a profit of around $25M, then I think that the valuation could easily go up to $4. If the outlook beyond looks good, then we could be looking at $5+. I'm not in it for a trade, I'm looking at it long term so I'm not too concerned at the moment with price or where it goes in 2016, things will take care of themselves if SML deliver.
Anybody noticed the Golden Cross we passed on Christmas day;)? Analysts seem to have trouble to update their consensus forecasts fast enough, but they move into the right direction (consensus forecast is now $2.92, up from $2.71).
They are probably not the only ones wondering how much the indicated margin improvement (more tin's, less bags) will really bring to the bottom line. The rain over the last couple of days must have been good (more grass for the summer / autumn season - i.e. less risk to run out of milk).
Anyway - holding and enjoying the ride ...
This is good news(ish) for SML but bad for farmers https://nzx.com/companies/SML/announcements/277035, they only need to pay around the Fonterra farm gate price. If they can execute their proposed changes in product mix then should deliver improved GP.
Actually - I don't think that the price of milk really matters to SML - they make their money with the volume they process and the margins they get for their value-add.
However - I do see this as a chance for them to get more Farmers into their "lead with pride" program:
http://www.synlait.com/about/milk-su...ad-with-pride/
This program pays farmers a premium for behaving environmentally responsible, for raising their standards of animal welfare and for ultimately producing better quality milk, and milk responsible consumers want to buy.
Great opportunity for them to differentiate themselves from the ugly and mass producing Fonterra, who does not seem to care about animal welfare or environmental issues.