SML - Synlait Milk Ltd

[nextbigthing]

Just offloaded a few more at 319c ... this is an unbelievable run SML shares are having. The stock is now 99c higher than the IPO price of 220c , or a staggering 45%! . Market Cap is now a cool $467m closing in on $1/2B !!

Amazing !!!

Disc: hold 66,962 SML

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.

[FarmerHamilton]

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.

[CJ]

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

[FarmerHamilton]

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 ! )

[FarmerHamilton]

Might be selling some more SML today .... 320 bid , offer side looking very thin !!

[FarmerHamilton]

324 ... wow! this is just a monster performer at present

Disc: order in to sell 3087 at 328

[baller18]

wowwwwwww congrats!!!

[FarmerHamilton]

wowwwwwww congrats!!!

Cheers B18 ... we got involved with Synlait in 2003 so it's been 10 years in the making ... but now it has been well worth the patience and the waiting !!

[percy]

Cheers B18 ... we got involved with Synlait in 2003 so it's been 10 years in the making ... but now it has been well worth the patience and the waiting !!

Well I and I am sure all other posters have loved your posts.
A great investment success.
Well done,and thank you for sharing your knowledge with us.

[FarmerHamilton]

Well I and I am sure all other posters have loved your posts.
A great investment success.
Well done,and thank you for sharing your knowledge with us.

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 ...