The Synlait Milk Ltd (ASX: SM1) share price is getting crunched, trading 10% lower today.

With today’s losses, over the past month shares of Synlait Milk are only down 11%. For comparison, the S&P/ASX 200 (INDEXASX: XJO) has risen 1% in the same time.

About Synlait Milk Ltd

Synlait Milk is a New Zealand based dairy processing company which produces a range of milk and milk powder related products such as infant formula.

Synlait also has exclusive supply rights for The a2 Milk Company Limited’s (ASX: A2M) canned infant formula products in the Australia/New Zealand and China markets. As of March 2019, a2 Milk was a 17.4% shareholder of Synlait.

What’s Happened?

As Rask Media’s Jaz Harrison reported today, Synlait released its 2019 financial results to the market showing a 17% jump in revenue and a 10% rise in net profit to $NZ82 million.

However, analysts surveyed had expected the company to report a profit of closer to $NZ88 million.

Meaning, some pundits might say ‘Synlait failed to meet expectations’. As we like to say, ‘analysts got it wrong’.

As Synlait’s CEO Leon Clement said, “…we invested in our future by bringing on new facilities and people capability that position us well for continued growth.”

“…our team delivered a strong result, invested in our future, and clarified our direction.”

Buy, Hold or Sell?

While no-one likes to see their shares fall, when a well-run, high-quality company gets sold down it can be an opportunity for savvy investors. This has happened to other similar companies like Blackmores Limited (ASX: BKL), a2 Milk and Bellamy’s Australia Ltd (ASX: BAL) in recent years.

With long-run potential, it could be time to take a closer look at Synlait shares. But first, click here to read the full results coverage from earlier today on Rask Media.


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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).

Disclosure: At the time of publishing, Owen does not have a financial interest in any of the companies mentioned.