SML - Synlait Milk Ltd

[winner69]

Wonder if the carnage will continue today ......Synlaits shareprice sure is taking a beating.

Reckon 650 could be the bottom this time around - 100% retracement from all high time highs has a nice ring to it

Overvalued at 650 a year or so ago and the milk hype doubles the shareprice to about 1300 and the ‘bubble’ bursts and it goes back to about fair value of 650.

Just checked ...jeez it hit 1365 intraday once ....madness prevailed ...Milk was addictive

[BlackPeter]

...

For the record I don't buy into all the teasing about pink fonts, rainbow, diversity or even the doom sayers supreme court outcome. This is a good company with locked in supply into a growth market for a long time, all I focus on now is a buy-in point ... it will come.

You are right ... the day to buy in again will come, and I might at some stage be as well back on the share register.

Looking at the causes for teasing SML - sure, not all that important, but you (well, at least me ); still wonder whether the new CEO has got his priorities right. I personally prefer managers who care about customer satisfaction and shareholders funds, rather than about creating pretty ugly pink dots and panels in presentations.

While I fully accept the old Latin saying "de gustibus non est disputandum" - fact is that the priorities of the new CEO clearly didn't help to keep the SP up. And sure - it is always nice for companies to do good (no matter whether this is related to human rights or to the climate change), but if they forget about that to look after their bottom line and the key interests of the shareholders, we (and shareholders in particular) do have a problem.

I think SML is a good company, but I think as well that the board made a number of potentially quite catastrophic mistakes. The mishandling of the legal situation around Pokeno and hiring the Ex Fonterra CEO are only two of them. Notice as well that the key decisions related to Pokeno have been made before Clement took up his job - i.e. just replacing him won't resolve the current situation.

[winner69]

Good positive start Synlait today

Suppose punters think it’s fallen enough so it’s all upwards from here

[sb9]

Good positive start Synlait today

Suppose punters think it’s fallen enough so it’s all upwards from here

Looks like you're very fixated on the minute to minute movement on this for some reason.

[Beagle]

You are right ... the day to buy in again will come, and I might at some stage be as well back on the share register.

Looking at the causes for teasing SML - sure, not all that important, but you (well, at least me ); still wonder whether the new CEO has got his priorities right. I personally prefer managers who care about customer satisfaction and shareholders funds, rather than about creating pretty ugly pink dots and panels in presentations.

While I fully accept the old Latin saying "de gustibus non est disputandum" - fact is that the priorities of the new CEO clearly didn't help to keep the SP up. And sure - it is always nice for companies to do good (no matter whether this is related to human rights or to the climate change), but if they forget about that to look after their bottom line and the key interests of the shareholders, we (and shareholders in particular) do have a problem.

I think SML is a good company, but I think as well that the board made a number of potentially quite catastrophic mistakes. The mishandling of the legal situation around Pokeno and hiring the Ex Fonterra CEO are only two of them. Notice as well that the key decisions related to Pokeno have been made before Clement took up his job - i.e. just replacing him won't resolve the current situation.

Excellent post and as you quite rightly point out this ~ $300m (plus all downstream supplier, staff and customer effects) game of Russian Roulette was started by John Penno who is now a director.

I agree with the vast majority of your post but a good company surely includes good management clearly focused on what really matters to shareholders and good directors focused on ensuring management don't expose shareholders to any extraordinary untoward risks. $300m is more than the total profit this company has made in the last 6 years so if they lose at the Supreme court then this has indeed been a catastrophic failure of management and the board.

To me it looks like the directors gave Penno free reign to do whatever he liked and you know the old saying, if you give someone enough rope, they eventually hang themselves. That he's now a director presiding over and therefore sanctioning the current culture of the company gives me no comfort whatsoever.

"Good company", really ?

[winner69]

Looks like you're very fixated on the minute to minute movement on this for some reason.

Could be I’m having a punt ..or maybe just an insatiable morbid fascination with slow motion train wrecks

[winner69]

Bots or sharesie punters doing well ....got share price up to 814

17 trades worth $2000 and price up 14 cents

[Beagle]

Could be I’m having a punt ..or maybe just an insatiable morbid fascination with slow motion train wrecks[

I don't know about you but I am definitely guilty as charged on that count !

[winner69]

I don't know about you but I am definitely guilty as charged on that count !

You learn heaps from watching slow motion train wrecks eh

Pre-mortems (as opposed to post-mortems) are also great. Like at the time Synlait hit 13 bucks plus one asked the question ‘jeez, the share price just hit 8 bucks’ and did a post-mortem as to what happened we might have foreseen all this.

[BlackPeter]

Excellent post and as you quite rightly point out this ~ $300m (plus all downstream supplier, staff and customer effects) game of Russian Roulette was started by John Penno who is now a director.

I agree with the vast majority of your post but a good company surely includes good management clearly focused on what really matters to shareholders and good directors focused on ensuring management don't expose shareholders to any extraordinary untoward risks. $300m is more than the total profit this company has made in the last 6 years so if they lose at the Supreme court then this has indeed been a catastrophic failure of management and the board.

To me it looks like the directors gave Penno free reign to do whatever he liked and you know the old saying, if you give someone enough rope, they eventually hang themselves. That he's now a director presiding over and therefore sanctioning the current culture of the company gives me no comfort whatsoever.

"Good company", really ?

Fair enough. I probably should have said "Synlait used to be a company I thought to be good" ;

I used to have a lot of respect for the likes of John Penno, Nigel Greenwood and Graeme Milne (and met all of them several times in person), but must admit that I am not quite sure where they have been on the decisions to build Pokeno where it now is and to hire the new CEO. Wondering as well whether all the commercial agreements with ATM have always been in Synlait's best interest.

I know their premises in Dunsandel quite well und think that they are well planned and managed. Staff is switched on and makes the impression it is standing behind the company. I guess this would be as well part of the "goodness" of a company.

In terms of business - they started a lot of "test-balloons" with supposed high value ventures (A2 IF - worked, normal milk powder - volume but small margin, Interferon - sort of worked, night milk - haven't heard from that for some time, grass fed - not sure) and moving now into the normal low margin side of the milk business (Pams, cheese manufacturing). Clearly - some of their attempts worked and others didn't.

Not sure, whether their success rate is particular great, but more concerned that with A2 IF being their as far as I know only reliable high margin product they are critically dependent on ATM. So dependent that they are in my view not anymore able to act in their own interest (even if they would know what this is) every time ATM asks them to bend over ... and dependence on one major customer is probably not how you recognize a good company.

So yes, quite difficult to say how "good" they really are.