SML - Synlait Milk Ltd

[winner69]

Chart shows a steady down trend from March last year .....was that panic dip to 4 something in feb/March but even so SML price only retraced back to that trend line and has continued down since ...with no sign of stopping.

Doesn’t inspire much confidence.

[Beagle]

I'm sorry mate but the market is telling you that its unimpressed with your ideal and Synlait's of putting people and the planet on exactly the same level as shareholders. Ever since their obsession with this process began the share price has been going steadily downhill. Plenty more pain to come for hapless shareholders in my opinion, still I am sure the planet and staff will be happy so two out of three isn't too bad is it and if shareholders have to swallow a few dead rats for the team that's okay isn't it and as long as I'm not one of those "lucky" shareholders that's fine with me too

[Nigel]

I think the uncertainty of Pokeno is keeping on the sidelines. I'm happy to hold (foolishly bought more at 5.88 this week) as long term I think this will surpass its previous highs. I like the Dairyworks acquisition - will be interesting to see how that has impacted financial performance next week.

[winner69]

Hey. Beagle me old mate ..feeling a bit less grumpy about Synlait today?

Whatever that was a cool comment you added to Damodaran’s piece on ESG titled ‘Sounding good or Doing good? A Skeptical Look at ESG’

Virtue signaling is now ubiquitous. Good to see a data-driven debunking of the drivel.

[Beagle]

Aswath Damodaran is well respected finance guy and his work always worth a read.

He seems rather skeptical on this ESG stuff

'Sounding good or doing good' a good title

http://aswathdamodaran.blogspot.com/...skeptical.html

Bit of a long read - might print it off and read properly and give it thought when having the oysters and chips down on the beach ....not today in the wind and rain (destructive storms according to the media - brought on by the irresponsible behaviour of corporates over the years)

Thanks for the link mate. I need to carve out some time to read that and mull over this at quite some length. Back in the 1980's when I was at Uni studying investment analysis Milton Friedman's pure capitalist view was front and central and certainly shaped my thinking at the time. His view if I remember correctly was that maximization of profit was the sole responsibility of a company and provided whatever they did to achieve that was within the rules that was okay.

Many brighter minds than mine have pontificated at some length over the decades about environment, social and governance responsibilities. To me it seems embracing social responsibility so that nobody feels discriminated against, equal opportunities for all races regardless of gender and being as kind as possible to the environment seem like worthwhile ideals.

Less clear is whether paying a living wage of over $21 an hour to a new 16 year old recruit at say MacDonald's is fair and reasonable to business and its customers.

My beef (should that be synthetic meat made with carbon free processes now ) with Synlait on the ESG front is they have elevated the planet and people to exactly the same level as shareholders which is what you've been alluding too on here as a great goal. That's fine if they set that goal up as the clear objective when the company is formed or seek a mandate from shareholders to change to that fairly extreme ESG view.
What mandate did they seek from shareholders to fundamentally upend the purpose of the company ? Surely if shareholders rights are going to be so substantially subverted and undermined a special resolution should have been sought such that a 75% approval process was sought from shareholders ?

It seems to me that Synlait directors play fast and loose with shareholders money and are shirking their responsibility to mitigate risk. Might be worth the directors time to read this https://corpgov.law.harvard.edu/2018...f-directors-5/

I think Synlait have taken ESG to the extreme and risk taking with Pokeno as well. No doubt shareholders can "look forward" to Synlait endlessly pontificating in their annual report and shareholder presentation about how they're meeting the most stringent carbon neutral processes, implementing widespread inclusiveness policies within the company, paying a living wage and they will wax lyrical about all the ways they are benefiting the planet and people because remember, these are just as important as shareholders...but all that time they fiddle while Rome burns and the risks they have taken with Pokeno are extreme to say the least and their debt level's keep on rising.

ESG is all about environment social and Governance. Shareholders could be easily forgiven for thinking the directors have almost completely overlooked governance.
Maybe there is wisdom in their methodologies but I struggle to see it and the market seems to agree with me.
The trend is not shareholders friend and it would seem that neither are management or the directors which begs the question seeing as capital is mobile with many other choices for a better home, why bother ?

I'm calling it. Leon Clement's appointment has been a complete failure for shareholders. He has presided over a massive destruction in shareholder value and his obsession with all things ESG has been massively harmful to shareholders. He needs to go ! (Very early on I called it that Herdlicka was a very bad fit for ATM and that call was bang on the money).

[winner69]

Friedman is old hat beagle

Recall what I put on the Oceania thread once -

The world in a sorry state today because guru economist Milton Friedman said “the only responsibility of business is to maximize shortterm profits, regardless of the social and environmental costs.”


We’ve got to change that “Maximize short-term profits, regardless of the social and environmental costs” attitude to “maximize long-term benefits for all people and nature.”

I don’t give a stuff what Oceania’s (or any company) short term profits are as long as they work towards creating a better life for all of us in the future.

[Beagle]

Oceania did very well looking after its residents physical and mental health during the Covid lockdown and probably made no money in the final quarter of the year just gone. I am proud of how they looked after their staff and residents. (See I have got a bit softer over the years)...might have gone soft in the head too lol

[RTM]

I think it’s primarily the Supreme Court decision that is weighing on Synlait. That and their relationship with ATM to a lesser extent. Clearly it’s not cut and dried, there is something to consider, because the deliberations have been going on for a while now. Once that’s behind them, as long as it’s in their favour, the SP should be related.

[BigBob]

I think it’s primarily the Supreme Court decision that is weighing on Synlait. That and their relationship with ATM to a lesser extent. Clearly it’s not cut and dried, there is something to consider, because the deliberations have been going on for a while now. Once that’s behind them, as long as it’s in their favour, the SP should be related.

I don't think you can infer too much from the time it is taking the judges to deliberate. It appears to me that 6 - 12 months is the norm - and it's only about 4 months since they were in court.

[RTM]

I don't think you can infer too much from the time it is taking the judges to deliberate. It appears to me that 6 - 12 months is the norm - and it's only about 4 months since they were in court.

Good to know....thx. So people are just nervous about the outcome.
Personally I think it will go in favour of Synlait.