As I said "better off researching" but I would still rather look at companies that already have exposure to Asia than a company that has gone from $1.75 down to .74 cents. It has dropped 10% in the last few months because it had already halved in price and now wants to pay 15 million dollars that is producing a profit of 1.3 million. Fairly long time before you see return on that investment!
The way the management has treated the small investor is pretty average.
LON knows that it is going to take a lot of time to grow the milk supply chain. I forget which poster identified this a while ago but I encourage any investor to find it and read it. It is time consuming to grow an organic heard. It can't be done on a whim.
I also put forward that there the company is flippant with its notion that with both Paris Creek and now St Davids a marketing campaign can improve sales dramatically. I know a lot of the business that is on the slide show that St David's supply. these are not major consumers of milk. Port Phillip Estate is a winery/restaurant not exactly going to fund a huge growth in sales.
They are going to be niche players at best. Even expanding into new markets it costs money. Money that will involve further share dilution. AND just because you expand into a market does not mean it will increase sales. The market for milk is highly competitive and you are not going to drive significant sales charging what they are!
But there are positives. They have outlined their intent to move into Asia, that's a good thing. And I suspect the play is to keep buying up business, to create a portfolio that will be attractive to a Chinese buyer down the track. They won't hit it big with the current strategy but they might get lucky if a Chinese company looks to buy them out at a premium.
OH and in terms of me being right, well I called that this was their strategy in a lot more detail than you give me credit for. You were the one who ridiculed what turned out to be an accurate call. But you are not the worst I wish Uboy was still around to take credit for his ramping.
LON Price at posting:
74.0¢ Sentiment: Sell Disclosure: Not Held
