TEN RED today GREEN on SYNLAIT News.., page-20

Here's another beauty by the BP analyst in his SM1 buy analysis which recommended a buy on SM1 for $12.75 on Feb 6:

Myth #2: The margins on the A2M contract are unsustainableOne of the most common pushbacks we get on SM1 is the sustainability of the margingenerated on the A2M contract. While there is limited information on the terms of theagreement we have carried out an analysis looking at IMF contracts in the public domainas well as the implied price paid by A2M for COGS as indicated by the Lyttleton exportvalues to Australia. This analysis below would seem to challenge the widely held view thatA2M pays a premium for its product and if anything would suggest it has quite a generousdeal with SM1. This would be particularly so if we consider that SM1 should be generatinga return for developing and managing the A2M milk pool and the high degree of flexibilitythat A2M has in forward orders (i.e. only 3 months firm forward ordering). Given we havenot incorporated any value for dry blended ingredients in the canning costs we see ourcompetitor estimate as potentially conservative, yet still indicating a price point up to 30%higher than A2M pays SM1.

I think today's SM1 report demonstrates it's only a myth in Jonathon Snape's mind. Margins are shrinking at least in the A2M relationship. I think I mentioned previously, he spends time trying to connect bits of incomplete information like Lyttelton export values vs A2M COGS and then match up with incomplete information on commercial IF contracts in the public domain. Just an impossible undertaking which would provide a very confidence in accuracy (as shown today).

Pretty ridiculous really for an analyst to advise clients and come up with valuations with such poor analysis methodology. It's cost his clients big time.