SML - Synlait Milk Ltd

[hardt]

Should do well from a declining dollar. Not sure I would be a buyer at these prices, but a very happy long term holder.

Question: what do you value Synlait at currently?

Correct me if I am wrong, but If you wouldn't buy at these prices, you must then feel like it is fairly/overvalued and will not outperform the market moving forward.

[BlackPeter]

Question: what do you value Synlait at currently?

Correct me if I am wrong, but If you wouldn't buy at these prices, you must then feel like it is fairly/overvalued and will not outperform the market moving forward.

For what it is worth: NTA $2.16; Analyst consensus $5.80; Value based on Graham's formula: $12.58; value based on 10 forward PE: $3.50; SP $7,96;

I guess this indicates that the analysts don't believe that they can stick with their roughly 15% CAGR - or that they factor in a risk premium. I guess the A2 story could either end at some stage, or alternatively it could take over the world. Interestingly - both options would be bad for SML. Option 1 would mean nobody wants their top line product anymore and option 2 would mean that there are lots of competitors selling the same stuff.

Very difficult to define a fair price for such a company without having a flawless crystal ball. Personally I think they are at the moment a bit too hyped up considering the potential risks, but then - if everything goes to plan they are still undervalued.

Discl: still hold some, but sold most of them. Might have been the wrong decision - or maybe not.