ATM - A2 Milk Corporation Limited

[King1212]

With a PE of around 44,ask yourself, would you buy at current prices? Has run ahead of its fundamental value IMO.As KW mentioned on the other forum, don't buy the rumour but rather the fact after the next results announcement at a much cheaper price than the current one.

couta1, are u saying the current price is overvalued?

[sb9]

With a PE of around 44,ask yourself, would you buy at current prices? Has run ahead of its fundamental value IMO.As KW mentioned on the other forum, don't buy the rumour but rather the fact after the next results announcement at a much cheaper price than the current one.

Well hence the reason I bought much much earlier than those buying currently. For you and me it might be overvalued, however those currently buying may have different opinion and like to be get onboard.

If things go as planned and expected for A2, in 6 months time current price might look quite cheap. Anyway, am happy to watch from sidelines and not prepared to let any of mine go anytime soon.

[Beagle]

With a PE of around 44,ask yourself, would you buy at current prices? Has run ahead of its fundamental value IMO.As KW mentioned on the other forum, don't buy the rumour but rather the fact after the next results announcement at a much cheaper price than the current one.

Its a growth company mate. They're spending $35m launching into the U.S. market which they will expense this year. The market is already looking well past the current year PE to forecast 2018 PE of ~ 26...which seems very reasonable to me considering they recently quadrupled their interim profit. Lot of potential here. From a TA perspective, there's nothing but blue sky ahead.
Letting my profit run on this one..and run and run until (if ever), it breaks down through the 100 day MA.
Average brokers forecast according to 4traders is for EPS of 10.3 cps for 2017, 14.0 cps for 2018 and 18.0 cps for 2019.

[couta1]

Its a growth company mate. They're spending $35m launching into the U.S. market which they will expense this year. The market is already looking well past the current year PE to forecast 2018 PE of ~ 26...which seems very reasonable to me considering they recently quadrupled their interim profit. Lot of potential here. From a TA perspective, there's nothing but blue sky ahead.
Letting my profit run on this one..and run and run until (if ever), it breaks down through the 100 day MA.
Average brokers forecast according to 4traders is for EPS of 10.3 cps for 2017, 14.0 cps for 2018 and 18.0 cps for 2019.

Hey it's a great company which I've made money out of(Only about a third of what I could have admittedly) I just think there will be a better re entry price. PS-No where to hide with the current PE in any market correction if you paid much over $3 IMO.PPS-Sb9, lots of people wanted to get on board XRO too, when it was over $40, remember that great wall of money?

[hardt]

Hey it's a great company which I've made money out of(Only about a third of what I could have admittedly) I just think there will be a better re entry price. PS-No where to hide with the current PE in any market correction if you paid much over $3 IMO.PPS-Sb9, lots of people wanted to get on board XRO too, when it was over $40, remember that great wall of money?

It is all about intrinsic value, managements performance, ROE/ROA/ROIC and debt, earnings growth and future dividends - it is clear to see why the market is prepared to place a premium on the trailing p/e as they do with stocks considered to be on the top shelf.

The Chinese household equates for just under half the world's total consumption of infant formula

Xero is an overvalued tech stock that does not turn a profit... two very different stories.

[couta1]

It is all about intrinsic value, managements performance, ROE/ROA/ROIC and debt, earnings growth and future dividends - it is clear to see why the market is prepared to place a premium on the trailing p/e as they do with stocks considered to be on the top shelf.

The Chinese household equates for just under half the world's total consumption of infant formula

Xero is an overvalued tech stock that does not turn a profit... two very different stories.

XRO is indeed a very different story, yet the thing they both have in common is a sentiment driven share price, take a look at the retirement sector of late, regardless of the fact that the sector has strong tailwinds and excellent long term prospects, sentiment has driven the prices down of late. XRO was overvalued but seems around fair value these days, what is a fair value for A2 is yet to be determined, time will tell.

[hardt]

XRO is indeed a very different story, yet the thing they both have in common is a sentiment driven share price, take a look at the retirement sector of late, regardless of the fact that the sector has strong tailwinds and excellent long term prospects, sentiment has driven the prices down of late. XRO was overvalued but seems around fair value these days, what is a fair value for A2 is yet to be determined, time will tell.

If a2 milk stops growing tomorrow, maintains its 2.5% market share in China [ current target is 5% market share by 2022 ]- we will still see immense earnings growth over the next 5-10 years.

19% growth in China
Asia is the fastest growing region in infant nutrition, at an annual rate of some 19%, largely driven by China. In China, improved living standards amongst the growing middle class and increased health awareness are stimulating purchases. Demand for imported products, regarded as safer since the recent melamine scandal, has been pushing prices up. Currently there are 160 million children aged between 3 and 13 years old in China. A 2012 baby boom in the year of the dragon, together with China’s one child policy, means demand for premium products will continue to grow in the coming years. In China, the number of mothers who breastfeed exclusively for 6 months is reported to be less than 30%. This is partly because baby formula is thought to be healthier and help babies bulk up – which is important in Chinese culture with many people believing that a large baby is a healthy baby.

Retirement sector is growing steadily and unless we see a plague, the growth wont stop! - but it does not offer a huge platform for exponential growth as the world offers to consumer goods..

[sb9]

It is all about intrinsic value, managements performance, ROE/ROA/ROIC and debt, earnings growth and future dividends - it is clear to see why the market is prepared to place a premium on the trailing p/e as they do with stocks considered to be on the top shelf.

The Chinese household equates for just under half the world's total consumption of infant formula

Xero is an overvalued tech stock that does not turn a profit... two very different stories.

Couldn't agree more on your comparison, right on the money.

Couta1- they're two very very very different companies and its flawed right along to compare ATM alongside Xero even be it on trading sentiment which in itself is incorrect too.

The price movement on Xero was quite rapid and quick fire when compared to the price movement of ATM. While Xero went up like 5-10% everyday during that infamous price rise to over $40 it happened on no news but purely on speculation and hype.

Contrast that with ATM they've just upgraded their forecast, Chinese cross border e-com rules relaxed recently, they've appointed new business head for SE Asian region to further their growth in that part, did their presentation at Macquarie Conf to potential investors with deep pockets, outlined their ambition to grab 5% of Chinese IF market and new product launches to happen soon. And this list go on and on. Not to say how many times in the last 3 years or so they've beaten their own forecast, something any corporate would be proud of.

Finally on the fundamentals and financials, wouldn't even worth starting a debate on that. One is hugely profitable and keeps getting more profitable and the other after more than a decade in business still to breakeven on cash flow let alone make a dollar profit.

Think I leave it there for now.

[Beagle]

Very well said sb9 and hardt.

[Ninefingers]

After holding since 60c I've been selling some small packets recently to fund on going house renovations, keeping a majority of the holding though...this just keeps rocketing on up.