Why Fundamental Investors Love Synlait Milk Limited (NZE:SML)

I’ve been keeping an eye on Synlait Milk Limited (NZSE:SML) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe SML has a lot to offer. Basically, it is a company with great financial health as well as a an impressive track record of performance. Below, I’ve touched on some key aspects you should know on a high level. For those interested in digger a bit deeper into my commentary, take a look at the report on Synlait Milk here.

Flawless balance sheet with solid track record

Over the past year, SML has grown its earnings by 96.38%, with its most recent figure exceeding its annual average over the past five years. Not only did SML outperformed its past performance, its growth also surpassed the Food industry expansion, which generated a 40.34% earnings growth. This is what investors like to see! SML is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that SML has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. SML’s has produced operating cash levels of 1.47x total debt over the past year, which implies that SML’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

NZSE:SML Income Statement Jun 14th 18

Next Steps:

For Synlait Milk, I’ve compiled three important aspects you should look at:

1. Future Outlook: What are well-informed industry analysts predicting for SML’s future growth? Take a look at our free research report of analyst consensus for SML’s outlook.

2. Valuation: What is SML worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether SML is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of SML? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.