Just a quick fact check - a2 milk only doubled in value in the past 12 months - over the past 3 years it grew by 12x from trough to peak.
We're all pretty much agreed that when stage one is complete, we're likely to see the company trading multiples of where it is now. What we're having trouble with is determining how many multiples. I believe we're likely to see a reasonable enterprise value between 1-3 billion, which would put the SP in a range between 80 cents to $2.
There is still a long way to go, however, a trade war between China and the USA, feed, infrastructure risks, weather, capital risks, FIRB approval risks, project timeline problems, add to that the simple reality that pretty much everything that goes wrong in Northern Australia (where everything costs twice as much to do and takes three times as long as one would reasonably expect) and I can see why one doesn't want to bet the farm. I, perhaps foolishly, though am very risk on, at about 20% of my portfolio sitting in SFG- enough to buy a reasonably nice new car.
If we get to where I think we're going to get, though, my hope is that I'll have enough to buy a reasonable two bedroom apartment in Melbourne, or borrow a bunch of money to buy a couple of investment houses.
I'd be lying, though, if I didn't say that I'm really impatient for the company to get there.
SFG Price at posting:
7.7¢ Sentiment: Buy Disclosure: Held
