Good finish today albeit on light volume. Some punters are keen perhaps?
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Looks like an uptrend forming...anyone here have an opinion about the possible capacity upgrade?
I think there is plenty of scope for growth over the next few years. Not sure about capacity and where they are currently at vs demand.
One thing for sure, the uptrend is already in place. You won't find many better examples than how this has bounced off the 100 day moving avg. Looks to be strong.
I think an independent like Synlait has so many options going into the future. If they can stay on track, I think we could see profits triple over an extended period. PE of 18 is cheap in my opinion.
Not sure about the current excitement ... I guess SML is a good company, great management but certainly a cyclical stock in a cyclical sector. I'd see their current share price as fair ... and as history shows they have a tendency for over- and under swingers.
So - yes, traders still might be able to make a dollar of the current SP - for investors I would see the current entry as a bit high.
They might well rise to the $4+ they reached before, but until they reduce their quite high level of debts and move into a position to pay dividends would I expect the share price to oscillate depending on the markets mood of the day.
I probably go at some stage back in ... but would hope that this is when the price has again a 2 in front. Who knows - another Chinese tremble, a deterioration of the world milk price or just some local jitter might do.
Even if their income is not really milk price dependent ... their balance sheet is. They have already at current a lot of additional debt in their books just to prop up the accounts of their farmers. Good on them to support their suppliers, but not sure, whether this is the time to pay top dollars for their shares.
Hoping that the PGW and FSF will have a contagious affect on this one too...
https://nzx.com/companies/SML/announcements/287131
Just one word..."Stupendous"....
Looks to be a milk shortage , ahem, i mean share shortage.
On a second thought - did their leverage ratio really improve? What baseline do they use? They finished FY2015 with a liabilities to assets ratio of 70.4%; Assuming their forecast leverage ratio is now 2.5 ... this would mean liabilities (2.5) to assets (2.5+1) = 71.4%;
I know, there are many creative ways of accounting ... which one do they use? For me this looks like an increase (though small) of an anyway high leverage, certainly not a healthy change of the balance sheet.
What would you guys like to see done with the profit? They could announce dividend policy. Shareprice should climb substantially. Then, after some time, offer SPP to raise capital for further investment in drying plant.
Well, in the last handful of AGM's I remember they always indicated that they are a growth company - i.e. intending to reinvest any money earned (and I think 2 years ago they even mentioned that they still might need more money to keep growing).
Looking into their books I think that paying off debts (leverage above 70%) and any investment into growth clearly must be priority over paying dividends.
Anyway - just the view from the sidelines ...
Awesome! I have been busy all morning and just saw this now. I've been a believer for a while and think there is way more potential. Its funny how this is one of the quieter threads on ST and IMO one of the best investments.