ATM - A2 Milk Corporation Limited

[Bjauck]

Trailing PE is 40 but Peat, take a peak into the future and the forward PE might only be 20 and then like a budgie it is still cheep cheep :D
The thing with great global brands growth is that they just keep GROWING ! The hound is like the cat that got the A2 cream!

[peat]

The hound is like the cat that got the A2 cream!

as long as he drinks it quickly coz cream goes off after a while

and I'm not suggesting doom and gloom , just thinking that maybe its time for a breather on this stock at these levels.

[Beagle]

$5.19 today / up 5.70% in one day. Noice....

$5.20 on the close so up 5.9% but it beat average analyst expectations by 14.4% so a further rerating in the short term wouldn't surprise me and then there's obviously ongoing growth ahead. I'm expecting N.Z. and Australian analyst upgrades on the back of this result.


12.7 cps well ahead of average 4traders analyst expectations for FY17 of 11.1 cps.

[Hoop]

My broker said that they value the shares around $5 what are your guys thoughts?
That was late last week.
ATM has grown since last week so your broker's price needs updating.:D

Disc ..back in

[Oliver Mander]

The cat is enjoying his cream on this one...

Good to see the growth, and nice that its "disciplined" as well - increasing revenue translating nicely to earnings growth. Will be VERY interested in revenue predictions for the next 12 months, and whether there is a significant increase in fixed costs as a result of it. The high PE is factoring in some big expectations...so it needs to at least meet it.

Nonetheless, while there is a distinct risk profile, today is a good day.

Disc: happy holder :-), and not selling yet...

[BlackPeter]

as long as he drinks it quickly coz cream goes off after a while

and I'm not suggesting doom and gloom , just thinking that maybe its time for a breather on this stock at these levels.

I guess you never know, and they do happen. But waiting for breathers with this stock can be a dear experience (considering all the lost opportunity cost). I talk from experience ... ;)

Discl: hold some (but wish I would hold more ...);

[sb9]

OK I'll stick my head our and do a forecast.....EPS in FY17 grew 188% over FY16 to 12.7c.
If we assume slower 100% EPS growth in FY18 to (say) 25c. (could be more with share buy-back??) at a P/E of 30 we get a forward value of $7.50
Looking good to this happy holder......

I'm actually thinking the EPS will more than double this FY. Reason being more production facility being added by Synlait through the plant in Akl along with further additions to the existing capacity in Canterbury.

I'm picking NPAT for FY18 to be around 27.5c based on NPAT of close to $200mln. By which time I expect the buyback to be completed and that will add bit more to the EPS.
So, based on 27.5c EPS and apply say PE of 30 we're looking at a valuation target of $8.25 and if market is generous and attributes the current 40 PE multiple, that gives us $11.00 which is best case scenario.
All in all we should be close to the $10 mark if all goes as per plan and my short term target for ASM time in Nov is at least $6.00.

Pls DYOR...

Disc: was tempted to sell a small portion y'day but resisted the urge strongly and after looking through the numbers bit more thoroughly and will continue to hold...

[Beagle]

I'm actually thinking the EPS will more than double this FY. Reason being more production facility being added by Synlait through the plant in Akl along with further additions to the existing capacity in Canterbury.

I'm picking NPAT for FY18 to be around 27.5c based on NPAT of close to $200mln. By which time I expect the buyback to be completed and that will add bit more to the EPS.
So, based on 27.5c EPS and apply say PE of 30 we're looking at a valuation target of $8.25 and if market is generous and attributes the current 40 PE multiple, that gives us $11.00 which is best case scenario.
All in all we should be close to the $10 mark if all goes as per plan and my short term target for ASM time in Nov is at least $6.00.

Pls DYOR...

Disc: was tempted to sell a small portion y'day but resisted the urge strongly and after looking through the numbers bit more thoroughly and will continue to hold...

Bullish post, I like it and hope you're right mate. It will be interesting to see where broker valuations are at once they have updated them.

[Leftfield]

Thanks for your thoughts on a fwd SP sb9. Much appreciated..... I was feeling lonely at $7.50!!

The November update is going to be very interesting.

[777]

$6 by November. The way they are going this morning it will be $6 by 2pm today. Sure is a lot of interest.

[sb9]

Bullish post, I like it and hope you're right mate. It will be interesting to see where broker valuations are at once they have updated them.

Yes its quite bullish and knowing myself I'm usually not that bullish in predictions, more conservative. However, I'm making an exception in this case. This is purely based on the fact that more production being available, stock is derisked of most threats (regulatory), UK operations being profitable (operating level) for first time in years and more opportunities in SEA market.

As an aside, the stage 4 (3+ years) seem to be picking up quite well in demand and apparently this does not need CFDA approval (source:hotcopper). And also reading on there, seems Blackmores have discounted their IF by upto 80% at sale price of AU$4.99 per tin, shocking, isn't it....on the other hand these guys can't keep enough on the shelves for customers, figure that.

Hence my reasoning for bullish post, I could be wrong but at least that's my workings anyway, happy to be challenged and corrected :)

[sb9]

$6 by November. The way they are going this morning it will be $6 by 2pm today. Sure is a lot of interest.

Yeah, looks like Aussies are picking this to be $5 soon and based on that we should be around $5.50 based on current exchange rate of .914...thx for weakening NZD against AUD, better for us kiwi holders :t_up:

[Leftfield]

Nice start to the day.
Aust Brokers Bell Potter have upgraded their 12 month buy rating to $A5.50
9101

[Beagle]

Nice start to the day.
Aust Brokers Bell Potter have upgraded their 12 month buy rating to $A5.50
9101

Thanks for sharing.

[misterx]

Well on its way to $7+... impressive

[Snow Leopard]

A $40M buy-back is only 1% of the current shares kicking around.
But if they did that year after year after year that would be something.

Best Wishes
Paper Tiger

Who stole my carriage returns?

[LegendOfRiot]

Happy that I topped up around the $4.90 mark recently.

[hardt]

Margins are everything.




A2 MILK COMPANY - NZ

FY13A

FY14A

FY15A

FY16A

FY17A

FY17F

RELATIVE PERFORMANCE ( +/- ) TO FORECAST























OPERATING REVENUES GENERATED - NZDm

94.5

110.8

155.1

352.8

549.2

546.0

0.6%



Cost of goods sold as a proportion of product trading revenues

64.30%

64.00%

64.80%

57.20%

52.03%

54.00%

2.00%



Cost of promotional marketing as a proportion of trading revenues

4.80%

8.90%

9.40%

10.30%

7.65%

9.00%

1.35%



Cost of logistics/shipping & freight as a proportion of trading revenues

7.90%

7.20%

6.00%

4.40%

3.67%

4.00%

0.33%



Cost of corporate + other as a percentage of trading revenues

10.70%

15.00%

15.30%

11.40%

11.47%

11.00%

-0.47%



OPERATING EXPENSES INCURRED - NZDm

84.8

106.6

151.0

297.3

410.9

425.9

3.7%























OERATING EBITDA GENERATED - NZDm

9.7

4.2

4.1

55.5

138.3

120.1

15.13%



Operating EBITDA to revenue

10.26%

3.81%

2.64%

15.73%

25.18%

22.00%

3.18%













ADJUSTED NPAT - NZDm

4.0

0.7

-1.1

31.4

90.6

81.9

10.62%



Adjusted NPAT to operating revenue

4.20%

0.60%

0.00%

8.90%

16.50%

15.00%

1.50%



Underlying EPS

-

-

-

4.32cps

12.29cps

11.27cps









ATM.NZX
FY17A
FY18F
FY19F
FY20F


ADJUSTED EARNINGS PER SHARE - CPS
12.29
18.00
23.00
26.50


SP AT FOREWARD EARNINGS OF 30x
$5.40
$6.90
$7.95
$9.00

[Leftfield]

Thanks for sharing Hardt.

Here's my summary of ATM FY18 SP guesstimates to date;
BP Brokers - $A5.85
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10

Going to be interesting to see where this one goes.

[Beagle]

http://www.4-traders.com/A2-MILK-COMPANY-LTD-11384022/consensus/
As expected, big broker upgrades. 2018 forward PE of 28 doesn't look too bad to me in terms of fundamental value considering their stellar track record of growth and upgrades to production this coming year.

[Leftfield]

http://www.4-traders.com/A2-MILK-COMPANY-LTD-11384022/consensus/
As expected, big broker upgrades. 2018 forward PE of 28 doesn't look too bad to me in terms of fundamental value considering their stellar track record of growth and upgrades to production this coming year.

Thanks for posting..... FY18 is going to be an exciting for ATM.

· New Stage 4 IF just launched; benefits yet to come. (Stage 4 could provide insurance as it apparently allows A2 to maintain supply of IF to China - if CFDA is not issued.)
· Production of IF to double from October 2017. Higher margins! Fresh milk used to outsell IF. Now it is the other way around.
· New A2 brand and market extensions; eg fresh A2 milk launched in Singapore etc.
· CFDA - Key China Certification pending; high probability of success…but SP will drop if not granted.
· Lion Court Case; Likely to be won or settled in ATM’s Favour. Likely that the cost of litigation will be recovered plus possible compensation boost. Again possible downside if A2 fails.
· Health and IP Benefits; Growing research and acceptance world wide. New Research in NZ and Aus looks impressive. Increased spending on Patent protection. Busy digging that moat.
· Special Dividend; TBA, a move to dividends in FY18.
· Share buy-back; increases SP and balance sheet strength
· Investment in Synlait; has already seen impressive appreciation. More to come.
· Double digit sales growth potential; USA, UK, Europe, Singapore with Triple digit potential in China

[Beagle]

Good synopsis Left field. Excellent summary of opportunities and risks. I am inclined towards thinking the Bell Potter sales and earnings projections look reasonably conservative and the risk on balance is to the upside an d we know they see fair value at $A5.50 approx. $6 Kiwi.

[blackcap]

https://www.stuff.co.nz/business/farming/opinion/96209989/keith-woodford-a2-milk-outperforms-once-again

[misterx]

Wow look at the jump.. sellers drying out

[sb9]

https://keithwoodford.wordpress.com/2017/08/27/a2-milk-outperforms-once-again/#more-1734

Great article by Prof Woodford...few snippets which echo my valuation the other day as follows:
"
- For the current 2017/18 year, Synlait has greatly increased processing capability for consumer-ready infant formula. Also, regulatory concerns relating to trade with China are now much less of an issue compared to the last 18 months.

- So, the prospects are that ATM could double its sales (my estimate), with market demand and logistics management being the key determining issues.

- One country that can make quick progress towards A2 milk is the USA. In that country, overall production is now dominated by large scale producers. These bigger farmers in the American barn-farming environment are also able to use breeding strategies, including sex-selected semen, that do not work so well in the New Zealand environment.

- Accordingly, it will be in the USA that ATM has potential to access the large volumes of milk that they will require, particularly for infant formula, if they are to achieve a global presence.
"

Onwards and upwards...should stop looking at market trading data for ATM or else there's always a temptation to sell...:p

[Beagle]

Yeap...Bell Potters analyst with a ~ $700m sales forecast for FY18 looks pretty conservative to me. Could do their FY20 estimate of ~ $850m of sales.

[flyer]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time.

[steveb]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time.
you could sell enough to cover your cost and then sit back for the free ride

[steveb]

SP now down to $5.60 from close to $6.00 anyone know whats going on?

[JeremyALD]

Probably just profit takers selling down

[BlackPeter]

Gosh - this SP got much ahead of itself. As long as it does not break through the MA 50 (and that's a long way to do down) would I not lose sleep because of a slight backdrop ...

[voltage]

Every week I wait for a correction to buy and the price keeps going up!!

[hardt]

We know how this works... on queue almost twice a week.

Trailing stops are forced out by intraday overselling.

All those day traders playing with ATM get toyed with by the firms.

[sb9]

SP now down to $5.60 from close to $6.00 anyone know whats going on?

A pullback is always expected after such a stellar run since wed last week. Correction/breather/profit taking is healthy sign for long term price movement.
Needs to consolidate at some stage, can't keep going up in a straight line for too long.

[Yoda]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time.
I made my money by selling too soon. Bernard Baruch
Read more at: https://www.brainyquote.com/quotes/quotes/b/bernardbar161320.html

[couta1]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time. Paper profits are only therhetical, locked in ones are real, which do you prefer?

[Nasi Goreng]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time.

Sometimes its good to both hold and sell. So you could sell 30% or 50% and lock in some profits. It might make you feel better and take some risk off the table.

[Ted2]

Sometimes its good to both hold and sell. So you could sell 30% or 50% and lock in some profits. It might make you feel better and take some risk off the table.

Sold about 15% of my holding 12 months ago at $2.25 to do exactly that, leaving the remaining holding almost at nil cost. Given the massive jump since, I do have the odd sick moment but this is balanced by the main holding doing so well! I just have to remind myself not to be greedy. Despite being far and away my largest holding, I did have some scepticism about the A2 price at that time, hence the sell, but can now only see upside for a fair while yet.

[Yoda]

https://www.stuff.co.nz/business/farming/96283285/cow-disease-spreads-north-to-rangiora-as-six-properties-now-infected

Does anyone know how far away this is from the A2 farms, and what affect it might have ?

[iceman]

I look at my holding and think I should sell to lock in my profits but it keeps climbing. What to do? It could still be cheap now looking back in 1 months time.

I was in ATM from almost the beginning and held through some serious ups and downs and accumulated right throughout. My friend the Beagle even recommended I accept an offer of 60 cents at one stage, which thankfully I didn't :-) Sold all some time ago with a very good return as the money was needed in another lucrative opportunity. Could be argued I sold too soon but the money was put to good work elsewhere. I do however wish I had not sold all of my ATM and based on that would recommend whatever you do, to keep some skin in the game with this one. A great company with a great product and nearly unlimited opportunities. It will all depend on execution and I for one want to see them grow faster outside of China and Australia. I will definitely join the share register again when the time is right for me

[BlackPeter]

https://www.stuff.co.nz/business/farming/96283285/cow-disease-spreads-north-to-rangiora-as-six-properties-now-infected

Does anyone know how far away this is from the A2 farms, and what affect it might have ?

I would be more concerned about the South Canterbury farms than Rangiora ... however it sounds like that Mycoplasma bovis occurs now towards the north as well as towards the South of the location of most A2 herds.

From some reports in the radio it sounds as well the MPI is treating the whole thing with its usual incompetence (suspected herds allowed to graze up to the boundary fence with not infected herds just over the fence). If this results in additional infections I am sure this will help to improve neighbourly goodwill for years to come.

Anyway - it is a disease which is endemic in most parts of the world - i.e. people and cows can live with it. No food safety risk, either. It just means affected farms will have a higher rate of sick animals - reducing the overall herd yield.

I assume NZ farmers will learn to live with Mycoplasma bovis as everybody else does. Similar like Varroa to honey bees. Not the end of the world, just another expense and pain.

[iceman]

UBS announcing it has been taking some profits, reducing holding from 6.14% to 5.03%

[BlackPeter]

UBS announcing it has been taking some profits, reducing holding from 6.14% to 5.03%

with a holding of their size it is just prudent portfolio management to take some money off the table .. I think they went in around $2 per share - nice profit for an 8 month wait ...

[iceman]

with a holding of their size it is just prudent portfolio management to take some money off the table .. I think they went in around $2 per share - nice profit for an 8 month wait ...

Absolutely agree. Good on them.

[couta1]

UBS announcing it has been taking some profits, reducing holding from 6.14% to 5.03% UBS and other big players continually short and manipulate this stock, it's just a game of cat and mouse to them. PS-BP, they didn't just buy in at $2, they have been buying and selling from around $2 right through.

[BlackPeter]

UBS and other big players continually short and manipulate this stock, it's just a game of cat and mouse to them. PS-BP, they didn't just buy in at $2, they have been buying and selling from around $2 right through.

Sure - I just picked one SSH which came handy ... does not change the story, though.

[sb9]

UBS and other big players continually short and manipulate this stock, it's just a game of cat and mouse to them.

UBS are the most notorious bunch when it comes to lending the stock for shorting...if they're accumulating I would be more worried as most of it is lent to shorters, but a reduction in holding is a healthy sign for ATM.

[Hoop]

I made my money by selling too soon. Bernard Baruch
Read more at: https://www.brainyquote.com/quotes/quotes/b/bernardbar161320.html
One very valuable quote not mentioned is the TA discipline quote..."Cut your losses short and let your profits run"

[hardt]

One very valuable quote not mentioned is the TA discipline quote..."Cut your losses short and let your profits run"

Took profits along the way to keep this one weighted under 50% of my portfolio.

Hindsight's a nightmare...

[Beagle]

Some nutritional information to consume with your morning tea :)
https://www.nzx.com/files/attachments/265153.pdf

[sb9]

Some nutritional information to consume with your morning tea :)
https://www.nzx.com/files/attachments/265153.pdf

Nice read...and pretty much what's been outlined at time of FY results, however FY18 outlook on slide 32 is the key...

[Beagle]

Nice read...and pretty much what's been outlined at time of FY results, however FY18 outlook on slide 32 is the key...









Yes I lapped up slide 32 like a thirsty hound...very satisfying drink it was too. For some strange reason I never get tired of reading phrases like "strong growth" :t_up:

[Ggcc]

Bought a small packet of these for the long term hold a couple of weeks ago. I think intolerances toward Lactose, Gluten and other things is hugely on the rise (although many, many, many, people self diagnose these things). This will definitely help A2 sell sell sell.

[Leftfield]

Nice rises in ATM SP recently. Possibly spurred by The Australian reporting that ATM is in a consortium looking at buying assets of the struggling Aus milk producer, Murray Goulburn.

I'm not too enthused by this speculation as I like the flexibility of the ATM business model to work with contractors rather than owning plant. Maybe ATM's partner SML will see this as an opportunity? Interesting times.

[vici]

Took profits along the way to keep this one weighted under 50% of my portfolio.

Hindsight's a nightmare...

Ah same with me, and yet I continue to do so.
Could be the time to sit back and enjoy the ride and see it become a 10x bagger all over again

[sb9]

Nice rises in ATM SP recently. Possibly spurred by The Australian reporting that ATM is in a consortium looking at buying assets of the struggling Aus milk producer, Murray Goulburn.

I'm not too enthused by this speculation as I like the flexibility of the ATM business model to work with contractors rather than owning plant. Maybe ATM's partner SML will see this as an opportunity? Interesting times.

Agree lf, I don't like our management going after that failed Murray Goulburn assets/plants...smells bad.

Nice to see some confirmation from posters on Hot Copper that it was just a rumour.

And we're inching close to another magic milestone of $6, onwards and upwards...

[sb9]

Holy cow..what happened there, strong open on ASX and ATM is past $6 mark, KACHING!!! BOOM :t_up:

[Beagle]

Holy cow..what happened there, strong open on ASX and ATM is past $6 mark, KACHING!!! BOOM :t_up:
lol makes up for SUM temporary disappointments elsewhere.

[sb9]

lol makes up for SUM disappointments elsewhere. I like Kaching Boom...need more of that and wish this was my #1 pick not SUM thing else right now but SUM will have their time in the SUN soon enough.

I see they are doing another investor preso in Hong Kong today and tomorrow following on from they had in London last week.

Must be all those international investors pouring onto this one....

[Beagle]

I see they are doing another investor preso in Hong Kong today and tomorrow following on from they had in London last week.

Must be all those international investors pouring onto this one....

It certainly has momentum !

[suse]

hmm yet again wondering if I should invest and dithering and watching the sp rise. I am glad I finally made the leap 3 weeks back with a very small shareholding. Reading the investor presentation I am reminded about the possible special dividend and buy back. If the shareprice is at what they consider it should be though, does that mean there wouldnt be a buy back. Is that good or bad? I wonder what sort of special dividend they are thinking about..

[Leftfield]

hmm yet again wondering if I should invest and dithering and watching the sp rise. I am glad I finally made the leap 3 weeks back with a very small shareholding. Reading the investor presentation I am reminded about the possible special dividend and buy back. If the shareprice is at what they consider it should be though, does that mean there wouldnt be a buy back. Is that good or bad? I wonder what sort of special dividend they are thinking about..

Welcome aboard the ATM ride Suse. I hope your holding is in profit, if so perhaps a good time to keep nibbling when/if the share market gets election jitters.

Re yr Q's - I suspect all will be revealed when ATM do their next market update (LY this was late Nov and Dec)

One thing you'll find about ATM is that the management are sound and there are few reasons not to trust them (unlike NTL's surprise cash raise, for example.) Perhaps if the SP rises to a level where ATM don't see any point in purchasing, then more is available to be distributed to SH via special dividend!! Time will tell.

Great to see ATM above $6.00 today and already well on the way to the FY18 predictions we made a month or so ago ie
BP Brokers - $A5.85 (now looking v conservative!!)
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10

[Ted2]

Welcome aboard the ATM ride Suse. I hope your holding is in profit, if so perhaps a good time to keep nibbling when/if the share market gets election jitters.

Re yr Q's - I suspect all will be revealed when ATM do their next market update (LY this was late Nov and Dec)

One thing you'll find about ATM is that the management are sound and there are few reasons not to trust them (unlike NTL's surprise cash raise, for example.) Perhaps if the SP rises to a level where ATM don't see any point in purchasing, then more is available to be distributed to SH via special dividend!! Time will tell.

Great to see ATM above $6.00 today and already well on the way to the FY18 predictions we made a month or so ago ie
BP Brokers - $A5.85 (now looking v conservative!!)
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10


I like sb9's prediction myself!!! :D :D :D :D

[Clints]

Welcome aboard the ATM ride Suse. I hope your holding is in profit, if so perhaps a good time to keep nibbling when/if the share market gets election jitters.

Re yr Q's - I suspect all will be revealed when ATM do their next market update (LY this was late Nov and Dec)

One thing you'll find about ATM is that the management are sound and there are few reasons not to trust them (unlike NTL's surprise cash raise, for example.) Perhaps if the SP rises to a level where ATM don't see any point in purchasing, then more is available to be distributed to SH via special dividend!! Time will tell.

Great to see ATM above $6.00 today and already well on the way to the FY18 predictions we made a month or so ago ie
BP Brokers - $A5.85 (now looking v conservative!!)
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10


Hey Left field - I am new to ATM (purchased about 3 weeks ago) and you seem quite knowledgeable in this holding. My question is why do these shares seem to go up during the day then seem to dip sharply towards the end of the day?

Thanks

[Yoda]

So why would the company do a buy back at an all time high, ? Does that make sense? Is that designed to keep the price up for any reason ,like management options coming on line or something ? Just asking ...... Isnt it done when the price is low?

[suse]

Welcome aboard the ATM ride Suse. I hope your holding is in profit, if so perhaps a good time to keep nibbling when/if the share market gets election jitters.

Re yr Q's - I suspect all will be revealed when ATM do their next market update (LY this was late Nov and Dec)

One thing you'll find about ATM is that the management are sound and there are few reasons not to trust them (unlike NTL's surprise cash raise, for example.) Perhaps if the SP rises to a level where ATM don't see any point in purchasing, then more is available to be distributed to SH via special dividend!! Time will tell.

Great to see ATM above $6.00 today and already well on the way to the FY18 predictions we made a month or so ago ie
BP Brokers - $A5.85 (now looking v conservative!!)
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10


Thanks LF for those thoughts and lets hope you and sb9 are totally on the money! :)
And yes, thank goodness for being in profit with ATM as it is taking the sting out of NTL losses at the moment. I definitely got caught up in the hype! - makes me feel like a fool and their money are easily parted, but I'm prepared to hang in there for now and hope for the best.

[Clints]

Thanks LF for those thoughts and lets hope you and sb9 are totally on the money! :)
And yes, thank goodness for being in profit with ATM as it is taking the sting out of NTL losses at the moment. I definitely got caught up in the hype! - makes me feel like a fool and their money are easily parted, but I'm prepared to hang in there for now and hope for the best.

Hi Suse - NTL - I too have been on this ride. My gut is that these will go up again after the Election / SPP so don't despair on this.

[Hoop]

Took profits along the way to keep this one weighted under 50% of my portfolio.

Hindsight's a nightmare...

Ah same with me, and yet I continue to do so.
Could be the time to sit back and enjoy the ride and see it become a 10x bagger all over again
Harry Markowitz has a lot to answer for..eh :(..

To be fair to Harry the key word in the Portfolio Theory is "allocate"..which suggests at commencement (or accumulate/sell during.. thus altering the portfolio metrics)...It's all the do with the level of risk you as an investor is happy to put up with and then mathematically find the maximised capital gain to that level of risk you assigned yourself to (usually the higher the level risk requires a higher level of return (maximised = most efficient way).. It says nothing about derisking during a huge capital gain event unless there's a sudden risk increase..It would make no sense would it as it would be contrary the Theory's principle of maximising capital gain..also derisking (selling) your lowest risk asset (best performer of making a capital gain) is contrary to the principle as it could dramatically lessen the portfolio maximising power of making a capital gain and also push the risk to the outside of your assigned risk perimeter resulting in a much less efficient portfolio..

I amazes me the investors (including myself sometimes) realising their profits (profit-taking) on their best performing stock and keep their dogs (badly performing stock) in the hope that some day they may get their money back. That is the exact opposite to the Principle..(Very inefficient portfolio = high outside assigned risk perimeter with minimising capital gain)

It is a complicated mathematical method that has to be recalculated very often as they are all variables... but there are simplistic methods for us plebs..There's a rule of thumb "buy/accumulate in up trending stock" ..and... "sell/don't buy downtrending stock" (high risk to capital gain).
Holding onto a downtrending stock can alter the risk/maximum capital gain metrics within one's Portfolio to the point that the resulting higher percentage risk becomes outside your established risk perimeter thereby creating a sell of the offending culprit to lower the risk back into the established perimeter thereby raising back up the efficiency of the portfolio (risk/maximised capital gain)..

Conclusion:..you should not have sold...

[Leftfield]

Hey Left field - I am new to ATM (purchased about 3 weeks ago) and you seem quite knowledgeable in this holding. My question is why do these shares seem to go up during the day then seem to dip sharply towards the end of the day?

Thanks

Hi Clints, I'm more of a long term trader, than a 'day trader' so I don't watch the hourly changes in SP. However; I note that morning trading in the NZX can change SP's in the afternoon with dual listed stocks, as the ASX opens at noon our time. The late aft trends you note might be to ASX short sellers or day traders having to exit quickly to avoid losses on a SP that is moving up against their expectations. If your late afternoon dip theory is right, then perhaps this is a good time to time your NZX purchases. My general rule in buying shares is simply to try and sneak a price lower than the VWAP of the day....then sit back and let the long term trend do its magic. Good luck out there!

[sb9]

I like sb9's prediction myself!!! :D :D :D :D


Great to see ATM above $6.00 today and already well on the way to the FY18 predictions we made a month or so ago ie
BP Brokers - $A5.85 (now looking v conservative!!)
Hardt - $NZ 6.90
Me - $NZ 7.50
sb9 - $NZ 8.25 to $10


I'll be looking forward to Synlait's results next week on 19th for further clues about how this going to move over next couple months until ASM time in Nov when there'll be a formal trading update from the company.

[Leftfield]

Thanks LF for those thoughts and lets hope you and sb9 are totally on the money! :)
And yes, thank goodness for being in profit with ATM as it is taking the sting out of NTL losses at the moment. I definitely got caught up in the hype! - makes me feel like a fool and their money are easily parted, but I'm prepared to hang in there for now and hope for the best.

Tricky decision to 'hang on' and hope. One of my proven tested rules is to "Take your losses quickly; make your gains long." Retaining a loss just ties up your money while other up trending stocks romp away. I too got caught in the hype of NTL, (a bit off topic on this tread) but, sure they have the gold, however given the political uncertainty, the difficulty of mining 'under water', and misleading statements by management I felt it best to get out quick.

[Snow Leopard]

I just wish I had bought more when they were sub 60c less than three years ago :mellow:.

Last buy was $2.39 in late Feb -even that is a 2.5 bagger - this is so awesome :).

Best Wishes
Paper Tiger

[Beagle]

Amazingly this stock was just $2 at Christmas. ATM...the gift that keeps on giving ! Wish I had more but my mother taught me a long time ago to be grateful for small mercies.

[RupertBear]

Yep wish I had more of these as well and less of SUM others. What a rocket ship! :D

[couta1]

Yep wish I had more of these as well and less of SUM others. What a rocket ship! :D I've held large holdings of this stock on and off until about a month ago and always felt nervous holding it in comparison to other large holdings. Have left mountain loads on the table over that time, however I see it as a high risk stock with multiple risks not common to other companies I have had, and continue to have large holdings in. I'm happy just to let it go now, don't know if I'll buy it again or not, I don't sweat the small stuff so much these days and quickly let regrets and wishes go, and move on.

[moka]

I sold all my ATM a year ago and just bought back in a few weeks ago. I have watched them rise and told myself I should buy but never did. With hindsight I identified that the reason I didn’t buy earlier was the belief that if it sounds too good to be true then it probably is. But I am a believer now. I remember watching XRO go up to over $40 and watching in disbelief.

You do not trade the markets. You can only trade your beliefs about the markets.—Van K. Tharp
http://www.vantharp.com/tharp-concepts/psychology.asp

[Snow Leopard]

...You do not trade the markets. You can only trade your beliefs about the markets.—Van K. Tharp...

Probably the most influential statement of my financial life. It really hit me when I first read that, many, many years ago.

Best Wishes
Paper Tiger

[couta1]

I sold all my ATM a year ago and just bought back in a few weeks ago. I have watched them rise and told myself I should buy but never did. With hindsight I identified that the reason I didn’t buy earlier was the belief that if it sounds too good to be true then it probably is. But I am a believer now. I remember watching XRO go up to over $40 and watching in disbelief.

You do not trade the markets. You can only trade your beliefs about the markets.—Van K. Tharp
http://www.vantharp.com/tharp-concepts/psychology.asp There are many that watched XRO go to $45 dollars in disbelief and now they don't believe it will ever get back to that price again, who knows if it will or not? ATM is a great company but one that makes me the most nervous holding in what I consider a meaningful holding ,so that's a red flag for me.

[moka]

I amazes me the investors (including myself sometimes) realising their profits (profit-taking) on their best performing stock and keep their dogs (badly performing stock) in the hope that some day they may get their money back. That is the exact opposite to the Principle..(Very inefficient portfolio = high outside assigned risk perimeter with minimising capital gain)

Conclusion:..you should not have sold...

I’m just reading Colin Nicholson’s book The Aggressive Investor. He says we are afraid to let a profit run, because of fear that it will evaporate. In investing, the saying that “you cannot go broke taking a profit” is WRONG. Our whole endeavour is to balance out all the small losses and the small gains, eliminate the large losses and let the large profits accumulate. If we take all our profits when they are small, the BEST result we can expect will be mediocre. It comes back to the psychology of investing – fear, greed, avoiding regret and ego.

Successful investors have a simple strategy: they try to buy into a trend once it has clearly started and sell out of it once it has clearly failed. As he says it is easy to say but devilishly difficult for most adults to do.

Hoop let me know when you think the trend is failing.

[Leftfield]

I’m just reading Colin Nicholson’s book The Aggressive Investor. He says we are afraid to let a profit run, because of fear that it will evaporate. In investing, the saying that “you cannot go broke taking a profit” is WRONG. Our whole endeavour is to balance out all the small losses and the small gains, eliminate the large losses and let the large profits accumulate. If we take all our profits when they are small, the BEST result we can expect will be mediocre. It comes back to the psychology of investing – fear, greed, avoiding regret and ego.

Successful investors have a simple strategy: they try to buy into a trend once it has clearly started and sell out of it once it has clearly failed. As he says it is easy to say but devilishly difficult for most adults to do.

Hoop let me know when you think the trend is failing.

Useful advice for us all - thanks for sharing Moka.

[hardt]

Harry Markowitz has a lot to answer for..eh :(..

To be fair to Harry the key word in the Portfolio Theory is "allocate"..which suggests at commencement (or accumulate/sell during.. thus altering the portfolio metrics)...It's all the do with the level of risk you as an investor is happy to put up with and then mathematically find the maximised capital gain to that level of risk you assigned yourself to (usually the higher the level risk requires a higher level of return (maximised = most efficient way).. It says nothing about derisking during a huge capital gain event unless there's a sudden risk increase..It would make no sense would it as it would be contrary the Theory's principle of maximising capital gain..also derisking (selling) your lowest risk asset (best performer of making a capital gain) is contrary to the principle as it could dramatically lessen the portfolio maximising power of making a capital gain and also push the risk to the outside of your assigned risk perimeter resulting in a much less efficient portfolio..

I amazes me the investors (including myself sometimes) realising their profits (profit-taking) on their best performing stock and keep their dogs (badly performing stock) in the hope that some day they may get their money back. That is the exact opposite to the Principle..(Very inefficient portfolio = high outside assigned risk perimeter with minimising capital gain)

It is a complicated mathematical method that has to be recalculated very often as they are all variables... but there are simplistic methods for us plebs..There's a rule of thumb "buy/accumulate in up trending stock" ..and... "sell/don't buy downtrending stock" (high risk to capital gain).
Holding onto a downtrending stock can alter the risk/maximum capital gain metrics within one's Portfolio to the point that the resulting higher percentage risk becomes outside your established risk perimeter thereby creating a sell of the offending culprit to lower the risk back into the established perimeter thereby raising back up the efficiency of the portfolio (risk/maximised capital gain)..

Conclusion:..you should not have sold...

Effectively, 90% of my net worth is in the markets... this year has been good to me and my net worth has doubled with that 50% in ATM the funds taken were used for my US holdings.

[moka]

I see they are doing another investor preso in Hong Kong today and tomorrow following on from they had in London last week.

Must be all those international investors pouring onto this one....

Yes 5 international trades this morning before open for $2,395,738

[see weed]

Bit of a sting in it's tail? Maybe under $6 today?

[misterx]

Any news? What's with the drops lately

[Ggcc]

Profit taking and apparently rebalancing by institutions

[kizame]

Any news? What's with the drops lately

It's had a big run,so taking a breather is normal,and yep even I took profits today,this is a wonderful stock,but it needs a bit of a rest.

[sb9]

Synlalit FY results for year ending 31 Jul 2017 released tomorrow.

Key things to look for me around increase in current production capacity and of more important is update on recently acquired plant in Auckland.
And with bit of luck, hopefully the CFDA approval comes through tomorrow as well.

[Leftfield]

SML's results out now. (https://nzx.com/companies/SML/announcements/307378)

Impressive results. As yet no CFDA approval. Plenty of good news for ATM including no mention of any issues with the new Auckland and Dunsandel plants, and exciting hints at new products to come;

"Synlait (NZX: SML; ASX: SM1) has reported their strongest performance yet with a net profit after tax of $38.2 million, double digit growth in profit margins and revenue increasing 39% to $759 million......

.....Underpinning the expansion of Synlait’s infant formula business is the acquisition of a second site in Auckland to double blending and consumer packaging capacity and a substantial investment to double the capacity of their wetmix kitchens in Dunsandel.

“Alongside our preparation for another phase of rapid growth, we’ve achieved a solid increase in profit and balance sheet strength in FY17. We intend to increase margins and operational efficiency, as well as canned infant formula volumes in FY18 to 30,000 MT – 35,000 MT, as a result of our preparation in FY17.”
“We expect to announce further plans in due course. These plans will allow us to keep up with medium to long term infant formula demand, as well as signal new high-returning product categories we intend to move into in the coming years.”

ATM well placed with its shareholding in SML looking v good.

[sb9]

Here are key takeaways for me from Synlait's report:

* Demand for higher margin products continued to rise, with finished infant formula volumes growing 17% to 18,776 MT and margins before tax increasing by $10 million.

* Underpinning the expansion of Synlait’s infant formula business is the acquisition of a second site in Auckland to double blending and consumer packaging capacity and a substantial investment to double the capacity of their wetmix kitchens in Dunsandel.

* “Investing in Synlait Auckland and our wetmix facility at Synlait Dunsandel will relieve any capacity constraints for the second half of FY18.” said Mr Penno.

* Alongside our preparation for another phase of rapid growth, we’ve achieved a solid increase in profit and balance sheet strength in FY17. We intend to increase margins and operational efficiency, as well as canned infant formula volumes in FY18 to 30,000 MT – 35,000 MT, as a result of our preparation in FY17.”

That should do wonders, nuff said.

[Snoopy]

* Demand for higher margin products continued to rise, with finished infant formula volumes growing 17% to 18,776 MT and margins before tax increasing by $10 million.

<snip>

That should do wonders, nuff said.

You left out the key questions. Synlait produces infant formula for other customers , not just A2. The real questions are:

1/ How much of Synlait's increased infant formula production capacity is contractually available to A2 Milk Ltd?
2/ How much increased raw A2 milk supply will be available to process? If the raw product is not available, it doesn't matter what the increased capacity of the processor is.

SNOOPY

[couta1]

Hey Snoopy, what's your valuation of these shares currently ? I remember when they were around $2.50, you said there was no little upside for holders, now they are around $6, that's a massive gain.

[BlackPeter]

You left out the key questions. Synlait produces infant formula for other customers , not just A2. The real questions are:

1/ How much of Synlait's increased infant formula production capacity is contractually available to A2 Milk Ltd?
2/ How much increased raw A2 milk supply will be available to process? If the raw product is not available, it doesn't matter what the increased capacity of the processor is.

SNOOPY

I recently asked these both questions to one of Synlait Senior Managers (as part of a factory tour).

Answer to 1: I may well ask, but he is not allowed to answer (funny ideas with commercial sensitivity);

Answer to 2: Lots of A2 herds (and milk) available to them - they currently put a lot of A2 milk into the standard supply .... but no - he didn't specify "a lot" (I asked for percentages ...).

[sb9]

You left out the key questions. Synlait produces infant formula for other customers , not just A2. The real questions are:

1/ How much of Synlait's increased infant formula production capacity is contractually available to A2 Milk Ltd?
2/ How much increased raw A2 milk supply will be available to process? If the raw product is not available, it doesn't matter what the increased capacity of the processor is.

SNOOPY

Unfortunately the breakdown of product mix isn't readily available from published records.

However, I would say its at least >80% for A2 Milk if not more.

You only have to look across ditch about stories and articles relating to A2 IF shortage right across all super market chains and chemist warehouse. With that in perspective one can only imagine the extra capacity mostly going to satiate A2 IF demand.

That's my take anyway...

[sb9]

Sorry forgot another bit of information to add...the strategic partnership agreement of 5 years between Synlait and A2 milk recently and A2's investment in Synlait shares goes a long way in explaining how close they work together...

[Nasi Goreng]

A few months ago I suggested SML could get to $10 within 5 years. I think my estimate may be a bit conservative now. Lots of opportunities for Synlait and with low debt and growth agenda, they can continue to grow and become NZs version of a true value add dairy manufacturer.

Im happy with 11% growth for a consolidation year. Wonder when they may think about divvies, 3-5 years maybe???

[BlackPeter]

Unfortunately the breakdown of product mix isn't readily available from published records.

However, I would say its at least >80% for A2 Milk if not more.

You only have to look across ditch about stories and articles relating to A2 IF shortage right across all super market chains and chemist warehouse. With that in perspective one can only imagine the extra capacity mostly going to satiate A2 IF demand.

That's my take anyway...

Would be interested on what assumptions you base your >80% for A2. It certainly is not based on volume or revenue ;)

Most of their product (per volume) leaves their factory in 25kg paper bags. None of them is labelled "A2"

The last time I visited (admittedly in winter) couldn't I see any truck delivering A2 milk ... despite 4 or 5 trucks being unloaded.

As well - if you look into the SML report - they say (page 75) "Revenues of approximately 48% (2016: 58%) are derived from the top three external customers". Obviously - A2 will be one of these external customers, but if they all three achieve only 48%, Than A2 milk can't have 80%.

I agree however that A2 will have a significant impact on their margin: A2 formula is (one of) their high margin products and the canning line looked pretty busy both times I visited (with A2 cans being filled). However, I very much doubt that A2 contributes >80% to their margin - in that case you would wonder why they bother with the majority of their other products making less than 20%? What would Fonterra live of (they don't have A2)?

[sb9]

Would be interested on what assumptions you base your >80% for A2. It certainly is not based on volume or revenue ;)

Most of their product (per volume) leaves their factory in 25kg paper bags. None of them is labelled "A2"

The last time I visited (admittedly in winter) couldn't I see any truck delivering A2 milk ... despite 4 or 5 trucks being unloaded.

As well - if you look into the SML report - they say (page 75) "Revenues of approximately 48% (2016: 58%) are derived from the top three external customers". Obviously - A2 will be one of these external customers, but if they all three achieve only 48%, Than A2 milk can't have 80%.

I agree however that A2 will have a significant impact on their margin: A2 formula is (one of) their high margin products and the canning line looked pretty busy both times I visited (with A2 cans being filled). However, I very much doubt that A2 contributes >80% to their margin - in that case you would wonder why they bother with the majority of their other products making less than 20%? What would Fonterra live of (they don't have A2)?

My assumption was more a guestimate, taking into account what's being put on slide 22 of the presentation.

[Snoopy]

Hey Snoopy, what's your valuation of these shares currently ? I remember when they were around $2.50, you said there was no little upside for holders, now they are around $6, that's a massive gain.


I got it wrong didn't I? My scepticism was because of my doubts about being able to repeat the success of China/Australia (I think you have to regard that as one market for baby formula, given that such a high proportion of Australian A2 baby formula sales end up in China) in the USA and the UK. I still hold those doubts. But guess what? Maybe it doesn't matter?

China is such a huge market that perhaps the 'exponential growth' implied by the A2 share price growth can be achieved in China alone? A2's marketing seems second to none. I really doubt that all the buyers of A2 are getting the benefit they think they are getting. But some obviously are. And if the others think they are, there is no reason that A2 won't continue to do well.

The problem with valuing something like ATM is that I like to think what benchmark I can compare it to? I don't think I know the China market well enough or the grocery market well enough to make an educated guess about choosing a benchmark. My valuation is: I don't know! All I know is the current share price incorporates a lot of hope and hype and I can't judge how much of that is justified. ATM is off my investment radar for that reason. I don't chase share price charts.

SNOOPY

[sb9]

Sourced from Hot copper...

https://www.fnarena.com/index.php/2017/09/20/synlait-milk-energised-for-growth/

Key highlight being...in relation to Synlait results and contribution of A2 to their sales and margin.

"Any new investment will be conditional on further growth in demand in advance of current projections but for the Bell Potter this highlights the optimism management has in the business. Furthermore, the broker envisages internalisation of the packaging of the a2 Milk adult nutrition product will be a potential profit driver in the second half. The broker estimates a2 Milk accounted for in excess of 80% of the company's consumer-packaged volumes and in excess of 30% of gross profit in FY17."

[Tee]

Bull markets are born on pessimism, grow on scepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.
John Templeton

I'll say that ATM is in the mature stage, and won't buy as the window of opportunity had long gone. It will appreciate as all market darlings do, but not forever.

[Beagle]

On a roll again. Grateful for small mercies that I have some. Glad I took a brave pill a few weeks back and topped up with some more at ~ $4.60...wish I had taken a double dose of that brave pill and topped up with twice as many lol

[couta1]

On a roll again. Grateful for small mercies that I have some. Glad I took a brave pill a few weeks back and topped up with some more at ~ $4.60...wish I had taken a double dose of that brave pill and topped up with twice as many lol Great stock, but not interested in it currently, doesnt suit my go big or go home disposition and nothing defensive about it in a correction.

[BlackPeter]

On a roll again. Grateful for small mercies that I have some. Glad I took a brave pill a few weeks back and topped up with some more at ~ $4.60...wish I had taken a double dose of that brave pill and topped up with twice as many lol

I know the feeling ... and just wondering, whether ATM might be right now the best place for some more spare cash ...

[couta1]

I know the feeling ... and just wondering, whether ATM might be right now the best place for some more spare cash ... Shame you didn't think about that when it was $2 only a year ago, horse has done a lot of hard laps since then.

[BlackPeter]

Sourced from Hot copper...

https://www.fnarena.com/index.php/2017/09/20/synlait-milk-energised-for-growth/

Key highlight being...in relation to Synlait results and contribution of A2 to their sales and margin.

"Any new investment will be conditional on further growth in demand in advance of current projections but for the Bell Potter this highlights the optimism management has in the business. Furthermore, the broker envisages internalisation of the packaging of the a2 Milk adult nutrition product will be a potential profit driver in the second half. The broker estimates a2 Milk accounted for in excess of 80% of the company's consumer-packaged volumes and in excess of 30% of gross profit in FY17."

Hi sb9, thanks for clarifying that. This is what I thought. I assume you realise that "80% of the company's consumer-packaged volumes" are different to 80% of their output? Most of their output (in volume) is milk powder going into large 25kg bags (i.e. not consumer packaged) - they have a huge warehouse full of them. Happy however to believe that the A2 cans ensemble around 80% of their 1kg can's (the consumer packaged volumes).

[BlackPeter]

Shame you didn't think about that when it was $2 only a year ago, horse had done a lot of hard laps since then.

I did ... just not enough ;);

[Yoda]

Hi sb9, thanks for clarifying that. This is what I thought. I assume you realise that "80% of the company's consumer-packaged volumes" are different to 80% of their output? Most of their output (in volume) is milk powder going into large 25kg bags (i.e. not consumer packaged) - they have a huge warehouse full of them. Happy however to believe that the A2 cans ensemble around 80% of their 1kg can's (the consumer packaged volumes).
What do they do with the 25kg bags ...stockpile?

[BlackPeter]

What do they do with the 25kg bags ...stockpile?

I guess the same thing Fonterra does - they sell them .... and as Fonterra they try to buffer seasonal differences - i.e. the fill level of the warehouse will be dependant on the season.

[Beagle]

I know the feeling ... and just wondering, whether ATM might be right now the best place for some more spare cash ...

Been super busy at work but in the very occasional quiet moment I have pondered the same thing...

[sb9]

Big close on ASX at day's high of 5.73 equates to NZ 6.27...massive break out :)

[couta1]

Been super busy at work but in the very occasional quiet moment I have pondered the same thing... Just keep pondering mate, no safety net and no where to hide if something/anything goes wrong. Although it's a good product, it's not an essential one like power.

[Yoda]

Just keep pondering mate, no safety net and no where to hide if something/anything goes wrong. Although it's a good product, it's not an essential one like power.
Really ? VCT. MCY. for example? 20-30 % + som div. in 5 years .-- a bit to slow for me
i think the safety net is to sell if it goes below the 50 or 100 MA, otherwise go with it ..... I think its a calculated risk one might consider.

[couta1]

Really ? VCT. MCY. for example? 20-30 % + som div. in 5 years .-- a bit to slow for me
i think the safety net is to sell if it goexs below the 50 or 100 MA, otherwise go with it ..... I think its a calculated risk one might consider. Because of my leaning toward large holdings I follow the Buffett rule and only buy shares that I would be happy to hold if the market shut down for 10 years, this stock doesn't fit that bill for me at it's current SP. PS-Boring, essential infrastructure stocks will continue to pay you in the form of divvies during those 10 years.

[Leftfield]

Just keep pondering mate, no safety net and no where to hide if something/anything goes wrong. Although it's a good product, it's not an essential one like power.

Interesting..... ATM not essential. I would have thought food/drink is a most basic essential. Perhaps you should talk to young mothers who use infant formula and others who suffer from Irritible Bowl Syndrome. ATM has a well proven 'unique proposition'.

I agree for those coming in now ATM may be looking a bit 'toppy', however for this long term holder/believer a 10 bagger is a welcome part of my portfolio. I agree with Yoda and will keep in my portfolio until it breaks below my TA MA indicators.

Lastly to understand ATM it helps to understand the Asian market and the impact of Daigou traders. Consider this quote from Hot Copper's poster Prophet's Insight.

"Saw some news on the Financial Review a few months ago that the biggest Daigou in Australia belongs to a low profile Vietnamese (most likely from a Chinese descendant) ... Nguyen in Regents park southwestern Sydney. Its net profit is around 300 mil a year and has become the biggest air freight customer for Qantas within a few years time. $300 mil is a astronomical figure for a daigou business it's greater than the net profit of A2m, Bal(which is making nothing for the previous year) and blackmores all combined. And more impressively is that he's only just one of the Daigous."

[couta1]

Left field, for most of the population water is the only essential drink, and for babies there is breast milk and other alternatives to ATM, so in that light it is not essential.

[Beagle]

Just keep pondering mate, no safety net and no where to hide if something/anything goes wrong. Although it's a good product, it's not an essential one like power.

Hi mate. Its nice to see you back on the forum posting regularly. I think to some extent that's fair comment but there is a large emerging middle class in China that want the very very best for their babies and are prepared to pay a premium price for that. Perhaps they see the best for their only child or if they are allowed / want to have two as really being essential ?

That said I think you make an excellent point about the dependability and reliability of utility companies through bad times and good.

[sb9]

Interesting..... ATM not essential. I would have thought food/drink is a most basic essential. Perhaps you should talk to young mothers who use infant formula and others who suffer from Irritible Bowl Syndrome. ATM has a well proven 'unique proposition'.

I agree for those coming in now ATM may be looking a bit 'toppy', however for this long term holder/believer a 10 bagger is a welcome part of my portfolio. I agree with Yoda and will keep in my portfolio until it breaks below my TA MA indicators.

Lastly to understand ATM it helps to understand the Asian market and the impact of Daigou traders. Consider this quote from Hot Copper's poster Prophet's Insight.

"Saw some news on the Financial Review a few months ago that the biggest Daigou in Australia belongs to a low profile Vietnamese (most likely from a Chinese descendant) ... Nguyen in Regents park southwestern Sydney. Its net profit is around 300 mil a year and has become the biggest air freight customer for Qantas within a few years time. $300 mil is a astronomical figure for a daigou business it's greater than the net profit of A2m, Bal(which is making nothing for the previous year) and blackmores all combined. And more impressively is that he's only just one of the Daigous."

Couldn't agree more lf, the word "essential" is very subjective and relative.

Some great insights on HC forum re Daigou traders from the mentioned poster and also robust discussion about Fonterra's position in overall dairy industry with insights from their ASM y'day.

[Leftfield]

Some more interesting speculation (and I stress 'speculation') about the news re Fontera bidding to takeover the Aust Milk producer, Murray Goulburn.

Here's what Hot Copper's poster, Working on Boats speculates today;

"My summary is that this is a great strategic move on account of both Fonterra and A2 should if it all come together for both parties. Coupled with the commentary of Fonterra possibly supplying a level of product (milk) to A2, Fonterra may have finally realised A2 milk protein could be the product of the future. So they're positioning themselves to gradually breed up the herds, and dispose of an "insignificant" amount of product to eagerly open armed A2 in the short/medium term. That's got to be a great help to A2's current & possible future supply problems. WIth A2's global patents already in place, competition may be a word we don't hear much about for a few years yet. In the meantime Synlait looking to open up the R&D facitilty here in NZ which one could assume is closely aligned with future growth/needs of A2. Fonterra has operated a R&D facility in NZ for years.

Fonterra s goal has always been to supply and sell as much milk based product as possible, obviously with huge variations in product, ie cheese butter yogurts etc. So if they manage to pull this off it's a win win. FOnterra supplies, A2 names/processes.

OMG the stars are more aligned than ever! I'm actually changing my sentiment today back to a "buy""

[777]

It wasn't long ago that Fonterra was rubbishing the A2 product.

[Yoda]

Some more interesting speculation (and I stress 'speculation') about the news re Fontera bidding to takeover the Aust Milk producer, Murray Goulburn.

Here's what Hot Copper's poster, Working on Boats speculates today;

"My summary is that this is a great strategic move on account of both Fonterra and A2 should if it all come together for both parties. Coupled with the commentary of Fonterra possibly supplying a level of product (milk) to A2, Fonterra may have finally realised A2 milk protein could be the product of the future. So they're positioning themselves to gradually breed up the herds, and dispose of an "insignificant" amount of product to eagerly open armed A2 in the short/medium term. That's got to be a great help to A2's current & possible future supply problems. WIth A2's global patents already in place, competition may be a word we don't hear much about for a few years yet. In the meantime Synlait looking to open up the R&D facitilty here in NZ which one could assume is closely aligned with future growth/needs of A2. Fonterra has operated a R&D facility in NZ for years.

Fonterra s goal has always been to supply and sell as much milk based product as possible, obviously with huge variations in product, ie cheese butter yogurts etc. So if they manage to pull this off it's a win win. FOnterra supplies, A2 names/processes.

OMG the stars are more aligned than ever! I'm actually changing my sentiment today back to a "buy""



Wow up 2% since you said that . You certainly have influence !

[Yoda]

Because of my leaning toward large holdings I follow the Buffett rule and only buy shares that I would be happy to hold if the market shut down for 10 years, this stock doesn't fit that bill for me at it's current SP. PS-Boring, essential infrastructure stocks will continue to pay you in the form of divvies during those 10 years.
Mmmmm you may have a point if Trump pushes the button .

[Ted2]

Hit the '+1000%' marker today! Understand that bad news might hit the price hard but this is one rollercoaster I'm happy to stay on. Is already the ride of my life............. :t_up: :t_up: :t_up:

[couta1]

Hit the '+1000%' marker today! Understand that bad news might hit the price hard but this is one rollercoaster I'm happy to stay on. Is already the ride of my life............. :t_up: :t_up: :t_up: Keep enjoying it, even if it halved in price you would still be up 500% so you have a football stadium sized safety net.:cool:

[Leftfield]

Wow up 2% since you said that . You certainly have influence !

LOL..... will have to post more!!

[777]

I have to keep going out so I don't hit the sell button.

[Leftfield]

I have to keep going out so I don't hit the sell button.

Just grab the champagne, sit back and enjoy!

... and still good news to come re the Lion case and China registration... or is it currently being priced in?

Amazing ride! GLH.

[sb9]

Hold onto your hats fellas, looks like the CFDA rego has come through...as per HC poster who checks the list regularly, better to wait for official confirmation from A2/Synlait tomorrow or in next few days.

[hardt]

Hold onto your hats fellas, looks like the CFDA rego has come through...as per HC poster who checks the list regularly, better to wait for official confirmation from A2/Synlait tomorrow or in next few days.

Was there ever any real doubt about this occurring?

This company is a real spicy meatball.

[Beagle]

I have to keep going out so I don't hit the sell button.
The first rule of investing is let your profits run.

[Leftfield]

Now official...... yee ha!!

28 September 2017
NZX / ASX MARKET RELEASE

SYNLAIT RECEIVES CFDA REGISTRATION OF THE a2 MILK COMPANY’S INFANT FORMULA
Synlait (NZX: SML; ASX: SM1) has received registration which will allow exports of The a2 Milk Company Limited’s (NZX: ATM; ASX: A2M) China label infant formula to China to continue.
All manufacturers of infant formula are required to register brands and recipes with the China Food and Drug Administration (CFDA) in order to import products into China, through traditional import channels, from 1 January 2018.

[Beagle]

http://www.sharechat.co.nz/article/0613ccef/synlait-gains-manufacturer-registration-for-a2-milk-s-china-label-infant-formula.html?utm_medium=email&utm_campaign=Synlait%20gains%20manufacturer%20regi stration%20for%20a2%20Milks%20China%20label%20infa nt%20formula&utm_content=Synlait%20gains%20manufacturer%20regis tration%20for%20a2%20Milks%20China%20label%20infan t%20formula+CID_0a186ad97bbbae4fb79dd154573eb845&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle0613ccefsynlai t-gains-manufacturer-registration-for-a2-milk-s-china-label-infant-formulahtml

Yipeee !!!!! Bring on $10 a share...only a matter of when, not if.

P.S. Disc Topped up a few more on the open this morning at $6.77, (no brave pill required)

[silu]

Well I'm going away from my normal Long Black and will make an extra frothy cappuccino with A2 Milk to celebrate.

[Ted2]

I need a seat belt................:eek2: :eek2: :eek2:

[steveb]

Do you guys keep saying to yourselves "why didn't I buy more".I keep saying it to myself every time I check my portfolio especially when I look at the dogs i've bought like MPG!

[ShouldHaveHeld]

Do you guys keep saying to yourselves "why didn't I buy more".I keep saying it to myself every time I check my portfolio especially when I look at the dogs i've bought like MPG!

or refer to name

[flyer]

Yes, even last week I still contemplated getting more but didn't. Is $7 still a good buy?

[Beagle]

Yeap, not happy with the mileage I am getting out of MPG, (you see what I did there :) ) time to cut and run and load up on this I reckon.

[Sideshow Bob]

Unbeliiiieeeeeeevvvvvaaaaaabbbbbblllllllleeeee! :t_up:

[Nasi Goreng]

I totally agree, having been a SML shareholder for a few years (and not ATM), its awesome to see both companies doing so well. SML now by far my biggest holding and breaking my loose rules on portfolio size.

[sb9]

I'm expecting a slight pullback in price today once the Aussie market opens, its case of buy on rumour and sell on fact as few funds would be locking in some profits at this level.

[Investor]

Is this still worth buying at the current price?

[Absolute144]

Is this still worth buying at the current price?

Well I bought in a few months ago at 4.80 thinking it was takeover target. I didnt have to wait for a takeover offer to see some nice gains.

[Leftfield]

Is this still worth buying at the current price?

Suggest you DYOR - there is a lot of information contained on past posts to this forum, plus ATM management have a strong history of delivering, so read ATM's past financial reports, updates and forecasts carefully.

In addition, several posters on this forum have forecast the levels where they believe the SP will be by end of FY18...... However, whether all that is enough to entice you, is up to you..... and then there is the question of a possible dividend yield.

[Beagle]

I'm expecting a slight pullback in price today once the Aussie market opens, its case of buy on rumour and sell on fact as few funds would be locking in some profits at this level.

Yes quite possible but I topped up just a little bit this morning on a five year view of how much growth this accreditation gives.

[Investor]

Actually i'm not decided on whether or not I will buy in.

[couta1]

Is this still worth buying at the current price? Call me whatever you want but I wouldn't touch it with a barge pole at the moment.

[Ggcc]

Call me whatever you want but I wouldn't touch it with a barge pole at the moment.
Smart until next figures and information comes out about stock level. We are dealing with a finite product after all

[Investor]

Call me whatever you want but I wouldn't touch it with a barge pole at the moment.

Yes I got a bit excited earlier. If I had bought in, it would of been a gamble rather than an informed decision.

[Tee]

The market value of ATM is $4.9 b, and that of Air New Zealand is $3.7 b. And Skycity is valued at $2.5 b. Now if I have the money, I'll buy Skycity.

[sb9]

The market value of ATM is $4.9 b, and that of Air New Zealand is $3.7 b. And Skycity is valued at $2.5 b. Now if I have the money, I'll buy Skycity.

Sorry no offence but your comparative analysis is totally flawed, could write few pages explaining..

[Beagle]

Three completely different industries. Bit like saying fresh tomatoes are expensive compared with canned beans and peanuts. Not a lot of fun trying to slice up peanuts and make a nice sandwich with them. Canned beans are barely passable in a sandwich if you're really struggling for ingredients :)

[JeremyALD]

SML going gangbusters. Is there a reason it's getting more of a lift out of the accreditation than ATM?

[BlackPeter]

SML going gangbusters. Is there a reason it's getting more of a lift out of the accreditation than ATM?

From a normally well informed source: funds buying. Might be due for some SSH soon.

[Clints]

Seems a bit volatile - fair drop from yesterdays high of 705

[kizame]

SML going gangbusters. Is there a reason it's getting more of a lift out of the accreditation than ATM?

Firstly accreditation was for SML, secondly ATM share price hit 7.05 that was a huge daily lift and unsustainable in the short term as PE ratio was already over 50.
SML PE ratio is 30 in comparison to ATMs 50+ for very similar growth as they produce what ATM sell.
So for the shorter term with that sort of daily trajectory with no new news for ATM,profit takers had to come in.

[iceman]

Firstly accreditation was for SML, secondly ATM share price hit 7.05 that was a huge daily lift and unsustainable in the short term as PE ratio was already over 50.
SML PE ratio is 30 in comparison to ATMs 50+ for very similar growth as they produce what ATM sell.
So for the shorter term with that sort of daily trajectory with no new news for ATM,profit takers had to come in.

I love both of these companies. But I am not sure that a PE comarison has any merit. One of them is a commodity producer, the other a marketing company ! Go figure !

[Beagle]

Historical PE of 51 as at Friday's close is irrelevant for a very high growth company. The market is always looking forward. If EPS doubles this year, (not saying that's certain but very strong growth looks like a given now) the company is on a forward PE of 25 which is actually very cheap for a company with their incredible growth rate.

[Snoopy]

Historical PE of 51 as at Friday's close is irrelevant for a very high growth company. The market is always looking forward. If EPS doubles this year, (not saying that's certain but very strong growth looks like a given now) the company is on a forward PE of 25 which is actually very cheap for a company with their incredible growth rate.


Can A2 management get enough A2 milk from the cows available to double sales? If they can, and since a PE of 25 is still high, can the A2 cow herd double again in two years to satisfy further implied growth? Looks to me like a lot of new 'future cow's are now 'priced in' to satisfy today's and next years A2 stock punters pick on where A2 sales are heading. How long do you think it takes a farmer to grow an A2 cow herd?

SNOOPY

[winner69]

That guru guy Ben Graham who many hold in high esteem would say ATM should be on a PE between 200 and 300

So 50 or 25 or whatever it is makes ATM cheap as

[Beagle]

Can A2 management get enough A2 milk from the cows available to double sales? If they can, and since a PE of 25 is still high, can the A2 cow herd double again in two years to satisfy further implied growth? Looks to me like a lot of new 'future cow's are now 'priced in' to satisfy today's and next years A2 stock punters pick on where A2 sales are heading. How long do you think it takes a farmer to grow an A2 cow herd?

SNOOPY

This hound is thinking long term with this one. Good things take time. I hear what you're saying BUT shortage of stock confers tremendous pricing power :)

[Tee]

A beginner’s attempt at TA.
As2onishing run from 23 August to 28 September. All SMAs pointing upwards. Candlesticks were mostly green. Even if you bought a week after the results were announced, and sold on 28/9, you would have made a higher return than that of most asset managers.
On 28/9, its price shot up and yet at the end of the day, the candlestick changed colour to red. And not your everyday candle, it was huge, blood curling red candle with a wick at the top. On the next day, a smaller red candle appeared. My eyes see the beginning of a X’mas tree in the charts. Hey this looks like a shooting star formation, a sign of a bear emerging.
Prediction, a correction this week. Support is expected at $5.49.

[Leftfield]

Nice one Tee...... like the 'blood curdling' red candle bit.

While I'm no expert, I've noticed a recent trend of ATM bouncing above its 10 day MA and see support a tab higher at around the $6.50 mark - that is until we get more news such as the Lion court case (which begins next week.)

Mind you all this could be trumped by Nth Korea.

[Beagle]

Nice strong day on solid volume on both sides of the Tasman. Ended here up strongly at $6.67 but interestingly closed the day at close to the day's high in Australia at $A6.17 up A31 cents or over 5%, (equal to $6.71 at the closing cross rate of 0.9198). Hounds have been known to quench their thirst by lapping on fresh A2 milk :)

[RupertBear]

Hounds are clearly braver than this little bear :D I sold off a few today....surely it cant keep going up at this pace :confused:

[couta1]

Nice strong day on solid volume on both sides of the Tasman. Ended here up strongly at $6.67 but interestingly closed the day at close to the day's high in Australia at $A6.17 up A31 cents or over 5%, (equal to $6.71 at the closing cross rate of 0.9198). Hounds have been known to quench their thirst by lapping on fresh A2 milk :) Lap it up Beagle, im more happy buying downtrending stocks like Spark(Getting my average price down slowly) than this volatile uptrending mother.

[gbogo]

Lap it up Beagle, im more happy buying downtrending stocks like Spark(Getting my average price down slowly) than this volatile uptrending mother.

I agree caution is required but that was a 10% pullback (7.05-6.40) and the way it snapped up this morning tells me there is still institutional buying. Perhaps index-related so more to come. Talk of $8 seemed fanciful but one local broker upgraded from $6.15-$7.65 (or thereabouts) last week. I've noticed slightly delayed reaction to those kind of upgrades before. Disc: long again. I've tried to take profits when it has been extended but every time, failed to get back in at a lower level because it hasn't go e lower. Finally, I'm not seeing relentlessly bullish optimism and headline news on ATM yet. I'll try to wait for that before selling again. Good luck with that!

[Snow Leopard]

Hounds are clearly braver than this little bear :D I sold off a few today....surely it cant keep going up at this pace :confused:

The words 'bear' and 'fear' should rhyme,
But they don't so no poem this time.

Keep your winners and sell the loss,
Great advice, but who gives a care?

The uptrend your friend, little bear,
Sell out when he's no longer there.


Best Wishes
Paper Tiger

[Leftfield]

Nice poem Paper Tiger. Interesting to reflect and (hopefully) learn. We ignore the trends at our peril.

Interesting to also reflect that back in July/Aug, over in the MPG forum, some were bullish noting a fall in SP as an opportunity to buy in, while others warned the down trend had not ended (along with the opportunity costs of tying up money in underperforming stocks.)

At the same time on this forum others were warning that ATM was overpriced and bound for a correction.

What has happened since? The following pic compares the ATM and MPG SP trends for the last 6 months.

9215

[gbogo]

i.e. the trend is your friend.. and if you are ever going to go against the trend, be very careful ie don't try to catch a falling knife. But really that's saying Momentum investing is the way to go. I used to always think that, but I see some cases where Value investing can make sense these days. MPG was perhaps more of a Value play.

[Beagle]

It matters not where I stare
neither here nor there I fear the bear

but one thing changes not that I have little care
never change one's stride to fight the tide and
go slow with the flow to make one's portfolio grow

[couta1]

i.e. the trend is your friend.. and if you are ever going to go against the trend, be very careful ie don't try to catch a falling knife. But really that's saying Momentum investing is the way to go. I used to always think that, but I see some cases where Value investing can make sense these days. MPG was perhaps more of a Value play. Catching a falling knife is fine as long as it's the right knife, think Air a year or so ago as an example, I'm currently catching the falling Spark knife, which I also consider the right kinda knife. MPG is only a play thing for me so have no real conviction about it other than it's a business that sells much needed and useful products and has cornered a good portion of the market.

[RupertBear]

Oh dear oh dear
This little bear
Got full of fear
And fought the tide
Instead of enjoying the ride

:D

[couta1]

Oh dear oh dear
This little bear
Got full of fear
And fought the tide
Instead of enjoying the ride

:D Good on you little bear, fear that ends in profit is a good kinda fear to have.:cool:

[Leftfield]

Nice bounce today..... Motley Fool has just reported on a Goldman Sach's BUY rec with a target of $A 7.25
See it here (https://www.fool.com.au/2017/10/04/top-broker-says-a2-milk-company-ltd-australia-shares-are-worth-7-25/)

(Sorry no rhyme - I have no thyme)

[Beagle]

Nice bounce today..... Motley Fool has just reported on a Goldman Sach's BUY rec with a target of $A 7.25
See it here (https://www.fool.com.au/2017/10/04/top-broker-says-a2-milk-company-ltd-australia-shares-are-worth-7-25/)

(Sorry no rhyme - I have no thyme)

LOL thanks for the info and don't be shy, just BUY :)

[Clints]

Interesting - let's see how close it gets to that target.

What the hell - don't sell!

[silu]

A2 Brute?
.
.
.
.
.
I'll get me coat.

[Clints]

This is going downhill rapidly (not the share price - that's my advice)

[Ggcc]

Nice rhyming guys. But on A2 today all I see are buys 😀

[peat]

.. Motley Fool has just reported on a Goldman Sach's BUY rec with a target of $A 7.25
See it here (https://www.fool.com.au/2017/10/04/top-broker-says-a2-milk-company-ltd-australia-shares-are-worth-7-25/)

A bit sus that this is given out for free , dont you think??

[winner69]

After being out for a while I'm back in big time.

Reckon it'll get to 10 bucks early in the new year.

Had to join in the fun

[sb9]

After being out for a while I'm back in big time.

Reckon it'll get to 10 bucks early in the new year.

Had to join in the fun

Good for you winner...hope you're also having fun with Pushpay :)

[Beagle]

Welcome back mate. Lapping up the rewards with this one.

P.S. You're on a winner here Winner :)

[whatsup]

$7.05 all time high !!

[Ggcc]

An acquaintance had 2,000,000 shares of these a few years back. He was wrapped to sell them for 25 cents a piece. Last time I saw him he was not too happy. Amazing how if only we could change the past haha.

Taking off like a Boeing 717........ $7.17

[silu]

An acquaintance had 2,000,000 shares of these a few years back. He was wrapped to sell them for 25 cents a piece. Last time I saw him he was not too happy. Amazing how if only we could change the past haha.

Taking off like a Boeing 717........ $7.17

Damn. I will never feel bad for selling some at $1.60 and $2.65 again.

[Clints]

An acquaintance had 2,000,000 shares of these a few years back. He was wrapped to sell them for 25 cents a piece. Last time I saw him he was not too happy. Amazing how if only we could change the past haha.

Taking off like a Boeing 717........ $7.17
i got a pit in my stomach reading that

[Ggcc]

i got a pit in my stomach reading that
he bought them for what I believe was 5 cents. So I am guessing a long long time ago.

[couta1]

An acquaintance had 2,000,000 shares of these a few years back. He was wrapped to sell them for 25 cents a piece. Last time I saw him he was not too happy. Amazing how if only we could change the past haha.

Taking off like a Boeing 717........ $7.17 The wasted emotion of regret,have my own A2 stories to tell but when I'm old I'm only going to regret not going skiing and fishing more as well as not enjoying my family as much as I should have.

[Rossimarnz]

What a ride!!!
Just sold a third of my holding (before you get excited I am a small player) at $7.21 (average cost of $0.63 from approx 2 years ago). The feeling that this run is getting stretched is beginning to grow on my conscience so have banked a very good return but have enough left at the table to enjoy whatever the future may hold.

[Joshuatree]

Nothing wrong with taking some money off the table Rossi. Very sensible in fact esp with a 12 bagger:D cograts.Mkt cap is $5.3 Billion atm :scared: Always looks too expensive to this loser.

[JeremyALD]

Nothing wrong with taking some money off the table Rossi. Very sensible in fact esp with a 12 bagger:D cograts.Mkt cap is $5.3 Billion atm :scared: Always looks too expensive to this loser.

Gosh seems like you can make a year's worth of interest every day with ATM at the moment!!

[suse]

i only got in a month ago with a very small parcel of shares after much dithering beforehand. Wish I had bought more and not put money in some other dogs. This must be an incredibly exciting ride for those of you with large stockholdings.

[fiasco]

A2 has been such a lesson learned stock. I wish I kept some play in the game, rather than selling back in the 2's and exiting completely. Anyway, amazing to see how it has moved in 12 months!!

[minimoke]

i only got in a month ago with a very small parcel of shares after much dithering beforehand. Wish I had bought more and not put money in some other dogs. This must be an incredibly exciting ride for those of you with large stockholdings.
I've dithered and didnt jump in. Not too concerned though as it seems to me the market is getting a bit ahead of itself. I'll wait until the profit takers have clipped their winnings and relook then.

[Beagle]

Behind the paywall article on NBR yesterday saying how ATM is knocking on the door of the NZX10 and ASX100 indices. Major index tracker funds appear set to join in the party in due course.

[Leftfield]

What a ride!!!
Just sold a third of my holding (before you get excited I am a small player) at $7.21 (average cost of $0.63 from approx 2 years ago). The feeling that this run is getting stretched is beginning to grow on my conscience so have banked a very good return but have enough left at the table to enjoy whatever the future may hold.

Good thinking. I did the same, took some $ off the table and am going to spread the love elsewhere in my portfolio, but will hold off any further buying till after 19 October (for those who can remember 1987.)

Happy to add to my cash till the election/ejection result is known and still a tab nervous about Trump v N Korea.

ATM remains over 50% of my portfolio so 'well positioned'. Phew what a day. What a ride!

[see weed]

I've dithered and didnt jump in. Not too concerned though as it seems to me the market is getting a bit ahead of itself. I'll wait until the profit takers have clipped their winnings and relook then.
Same here. Got off the bus to have a leak and they left me behind:). Been running after this bus since $2. Every time I decide to jump on, they take off again. They all in the back window waving me on. But still got a bag of 20,000@ 50c left on there from couple years ago. Next bus stop maybe. Noticed Aussi a2 coming off the boil a bit after nzx close.

[Beagle]

Same here. Got off the bus to have a leak and they left me behind:). Been running after this bus since $2. Every time I decide to jump on, they take off again. They all in the back window waving me on. But still got a bag of 20,000@ 50c left on there from couple years ago. Next bus stop maybe. Noticed Aussi a2 coming off the boil a bit after nzx close.

Be grateful for small mercies mate. I have less than I'd like but always grateful when A2 makes my life a bit easier.

[winner69]

Good call switching HLG and AIR into ATM over last week or so.

Reckon $10 bucks my year end?

[winner69]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say.

[silu]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say.

Isn't that the first sign that holders should sell out?

[pierre]

Isn't that the first sign that holders should sell out?

I think that's Winner's point.

[couta1]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say. After you told them it should hit $10 by year's end, they should all be pretty keen aye, I mean what could go wrong!!!

[Baa_Baa]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say.

Taxi driver this morning said the same thing. Going to check in with the shoeshine boy before open today, he's onto it picking tops.
;)

[Beagle]

On yesterday's close it trades at 34.8 times average analyst FY18 earnings. This for a company that tripled its EPS last year and by some accounts could double it this year.
Looking further out average analyst EPS growth is in the late 20's % per annum for FY19 and around 20% for FY20 which could be conservative.

Plenty of companies trading on similar multiples on the NZX with far less dynamic growth, e.g. and this is by no means whatsoever an exhaustive list, just examples that spring readily to mind AIA, POT, and FPH.
AIA 2018 PE 30, growth rates in eps for FY18, FY19 and Fy20 -23%, 5% and 5% respectively
POT 2018 PE 34 growth rates in eps for Fy18, FY19 and FY20 6% 8% and 6% respectively
FPH 2018 PE 38 growth rates in eps for FY18, FY19 & FY20 13%, 17% and 18% respectively
Source: All figures are average analyst numbers directly from 4traders.

ATM expensive compared to the growth rates of these companies or is it a case that some on here are not understanding how to price high growth companies ?, you folks be the judge ? Disc: Very happy holder !

[minimoke]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say.
down 2.9% so far today on that market news.

[pierre]

Some may be interested in knowing that my neighbours and his bowling club mates have decided to give up on Comvita (not as under water as a month or so ago) and bought into ATM yesterday ...will be better than term deposits they say.

Looks like they should have delayed their purchase till today - 21 cent drop at open!

[see weed]

Be grateful for small mercies mate. I have less than I'd like but always grateful when A2 makes my life a bit easier.
Just picked up some at 7.10.

[winner69]

After you told them it should hit $10 by year's end, they should all be pretty keen aye, I mean what could go wrong!!!

I almost cried when he told me what they had done

But this time it's different eh ...we will all be winners

[Beagle]

Good call switching HLG and AIR into ATM over last week or so. My rating HHH. (Happy hound holder) on those two. The way they keep my food bowl topped up is very pleasant

Reckon $10 bucks my year end?
Who knows mate but I'm very happy to ride the momentum, the trend is your friend until the bend in the end :) Confirmed 3 day breech of the 30 day MA would be my signal to reduce and certainly not at any stage before that.

[Pixelator]

Just picked up some at 7.10.

Probably mine sea weed!! �� Sold 50% of my holding which was bought September 2016 @ $1.98. To often I have been too greedy, needed to rebalance my portfolio from growth to divi stocks anyway...happy to hold the balance. If the cows stay aligned plenty more milk to flow yet.

[Snoopy]

On yesterday's close it trades at 34.8 times average analyst FY18 earnings. This for a company that tripled its EPS last year and by some accounts could double it this year.
Looking further out average analyst EPS growth is in the late 20's % per annum for FY19 and around 20% for FY20 which could be conservative.

Plenty of companies trading on similar multiples on the NZX with far less dynamic growth, e.g. and this is by no means whatsoever an exhaustive list, just examples that spring readily to mind AIA, POT, and FPH.
AIA 2018 PE 30, growth rates in eps for FY18, FY19 and Fy20 -23%, 5% and 5% respectively
POT 2018 PE 34 growth rates in eps for Fy18, FY19 and FY20 6% 8% and 6% respectively
FPH 2018 PE 38 growth rates in eps for FY18, FY19 & FY20 13%, 17% and 18% respectively
Source: All figures are average analyst numbers directly from 4traders.

ATM expensive compared to the growth rates of these companies or is it a case that some on here are not understanding how to price high growth companies ?, you folks be the judge ? Disc: Very happy holder !


Earnings growth for FY2018 to FY2020.

2 x 1.2 x 1.2 = 288%

A 288% incremental increase in the A2 cow herd in just three years is quite a few female calves to born. If half the cows born are female we are talking about:

2 x 288% = a 576% increase in A2 cows to be born.

And 'new' cows won't be ready top calve (compound in accounting terms) until 24 months is up, at the very earliest. So all the required growth needed to have started two years ago. You can't just rack the growth up year by year in cows by putting them on a spreadsheet Beagle. And I still have yet to factor in the removing of the old cows at the other end of their production life. One day you should venture south of the Bombay Hills, and have a look at a real cow. Then you will find out why your attempt to create one on your 3D printer hasn't worked!

SNOOPY

[see weed]

Probably mine sea weed!! �� Sold 50% of my holding which was bought September 2016 @ $1.98. To often I have been too greedy, needed to rebalance my portfolio from growth to divi stocks anyway...happy to hold the balance. If the cows stay aligned plenty more milk to flow yet.
That's right. And the shares you bought off me at 1.98 I bought a year earlier at 50c;). I did the same as you and sold 91,000 @2.38 to 2.52 last Feb., to buy div stocks, but the a2 bus left me behind, and will start picking up more a2 on the lows.:)

[Snow Leopard]

Earnings growth for FY2018 to FY2020.

2 x 1.2 x 1.2 = 288%

A 288% incremental increase in the A2 cow herd in just three years is quite a few female calves to born...

While you probably do need to double the herd size to double the raw milk produced (although I hear a rumour that they are talking of getting the cows to work weekends and do overtime!) and the actual sales revenue is probably closely correlated to this (exchange rates, product mix, usw, dll, etc) sales and earnings are not directly related.

I am fairly confident that FY16 to FY17 they about tripled profits on a less than 60% increase in sales.

Hopefully that sort of thing will continue for a few years or more.

Best Wishes
Paper Tiger

[peat]

You can't just rack the growth up year by year in cows by putting them on a spreadsheet

SNOOPY
Lol
I did some homework recently on the gene and this is very basic Mendelian genetics. Detect your A2 bull, and put it with a A2 cow and bingo. A2 calf.
But if you dont breed your A1's (with a view to becoming entirely A2) then your overall milk production will go down initially.
I was investigating whether this A2 concept could be franchised out to other countries etc, and i dont believe it can because you cant own the A2 gene. Its naturally occurring.

[BlackPeter]

Lol
I did some homework recently on the gene and this is very basic Mendelian genetics. Detect your A2 bull, and put it with a A2 cow and bingo. A2 calf.
But if you dont breed your A1's (with a view to becoming entirely A2) then your overall milk production will go down initially.
I was investigating whether this A2 concept could be franchised out to other countries etc, and i dont believe it can because you cant own the A2 gene. Its naturally occurring.

Correct - you can't protect the A2 gene - otherwise you would have IP on humans ;); However - there is a lot of protected IP around the methods to test for the A2 status of a herd ... and I believe that the term "A2-milk" is protected as well.

Not good to have A2-milk if you can't prove it and if you can't call it "A2".

[mondograss]

Not good to have A2-milk if you can't prove it and if you can't call it "A2".

A1-free milk?

[Snoopy]

While you probably do need to double the herd size to double the raw milk produced (although I hear a rumour that they are talking of getting the cows to work weekends and do overtime!) and the actual sales revenue is probably closely correlated to this (exchange rates, product mix, usw, dll, etc) sales and earnings are not directly related.

I am fairly confident that FY16 to FY17 they about tripled profits on a less than 60% increase in sales.

Hopefully that sort of thing will continue for a few years or more.


There may be more profit in selling A2 direct to supermarkets in China, rather than through the Daigou sales channels?
Maybe A2 can now sell direct to consumers over the web , boosting profits again?
Maybe the Daigou sales channels will start to promote other brands instead of A2, if A2 market direct?

Yes you don't necessarily have to double sales to double profits. But I would say there are quite a few unknowns as to how the changes in sales channels will work for A2 in the future.

SNOOPY

[BlackPeter]

A1-free milk?

not specific enough. A glass of water is A1-free as well and so is soya milk or coconut milk. None of them contain A2, though.

[mondograss]

not specific enough. A glass of water is A1-free as well and so is soya milk or coconut milk. None of them contain A2, though.

Hasn't stopped companies advertising products that have never and would never contain gluten as being gluten-free.

[Jay]

Hasn't stopped companies advertising products that have never and would never contain gluten as being gluten-free.

I see that all the time as well mondo and often comment about it out loud, but in a quieter voice!

[Rossimarnz]

Hasn't stopped companies advertising products that have never and would never contain gluten as being gluten-free.

I was surprised recently when I bought a packet of ground almonds that the label had a warning that it may contain traces of nuts!!! I was wanting more than just traces.

[mondograss]

I was surprised recently when I bought a packet of ground almonds that the label had a warning that it may contain traces of nuts!!! I was wanting more than just traces.

I blame the Americans. “You didn’t tell me these nuts contained nuts, I’ll sue you into next year!”

🥜

[BlackPeter]

I was surprised recently when I bought a packet of ground almonds that the label had a warning that it may contain traces of nuts!!! I was wanting more than just traces.

We are deviating from the thread ... however - almonds are not nuts ... i.e. the warning is justified (they probably use the same mill as well for nuts - and traces of nuts might be mixed with the almonds).

Back to milk: Of course - some companies make quite obvious but not value adding product claims like "gluten free mineral water". I don't know whether it increases their turnover .... personally I try to avoid companies who don't respect their customers (i.e. treat them as stupid).

I am however quite sure that the majority of concerned parents won't feed their baby's any white powder which claims to be "A1 free", but they will go for the real thing if they know that they want A2 ...

[iceman]

An acquaintance had 2,000,000 shares of these a few years back. He was wrapped to sell them for 25 cents a piece. Last time I saw him he was not too happy. Amazing how if only we could change the past haha.

Taking off like a Boeing 717........ $7.17

And he bought them for 5c you say. How many of the current cheerleaders of ATM have 5x their money do you think ? I was similar to your "acquaintance" but a little bit later. Quadrupled my money but sold out too much way too early. Lessoned learnt. The question is what these people did with the money since then. Most would have made more staying in ATM. Not all though. That is the real issue.

[couta1]

And he bought them for 5c you say. How many of the current cheerleaders of ATM have 5x their money do you think ? I was similar to your "acquaintance" but a little bit later. Quadrupled my money but sold out too much way too early. Lessoned learnt. The question is what these people did with the money since then. Most would have made more staying in ATM. Not all though. That is the real issue. Learning to be happy with whatever gain you make,whether it be optimal or not is a great attitude to have. Anybody basing their happiness on optimal sharemarket gains are in a very sad place IMO (Have been in that position myself in the past)

[iceman]

Learning to be happy with whatever gain you make,whether it be optimal or not is a great attitude to have. Anybody basing their happiness on optimal sharemarket gains are in a very sad place IMO (Have been in that position myself in the past)

Totally agree with that one mate. And a bit of skiing and fishing :-)

[hardt]

Earnings growth for FY2018 to FY2020.

2 x 1.2 x 1.2 = 288%

A 288% incremental increase in the A2 cow herd in just three years is quite a few female calves to born. If half the cows born are female we are talking about:

2 x 288% = a 576% increase in A2 cows to be born.

And 'new' cows won't be ready top calve (compound in accounting terms) until 24 months is up, at the very earliest. So all the required growth needed to have started two years ago. You can't just rack the growth up year by year in cows by putting them on a spreadsheet Beagle. And I still have yet to factor in the removing of the old cows at the other end of their production life. One day you should venture south of the Bombay Hills, and have a look at a real cow. Then you will find out why your attempt to create one on your 3D printer hasn't worked!

SNOOPY


NZ farmers supply Synlait - IF and Aussie farmers supply the wet-milk sold in Aussie supermarkets.

A2M would team up with or acquire an Aussie milk processor to also pump out IF with all that raw material being supplied by Aussie farmers.

A2M would also happily cannibalise their wet-milk sales for higher margin infant formula product if it came down to that...

There is no indication of a possible shortage of raw material

[Hectorplains]

There may be more profit in selling A2 direct to supermarkets in China, rather than through the Daigou sales channels?
Maybe A2 can now sell direct to consumers over the web , boosting profits again?
Maybe the Daigou sales channels will start to promote other brands instead of A2, if A2 market direct?

Yes you don't necessarily have to double sales to double profits. But I would say there are quite a few unknowns as to how the changes in sales channels will work for A2 in the future.

SNOOPY

Don't underestimate the role of the Daigou, trade with China is not a linear process. Bellamy's made this mistake last year and halved their share price.

[Beagle]

Earnings growth for FY2018 to FY2020.

2 x 1.2 x 1.2 = 288%

A 288% incremental increase in the A2 cow herd in just three years is quite a few female calves to born. If half the cows born are female we are talking about:

2 x 288% = a 576% increase in A2 cows to be born.

And 'new' cows won't be ready top calve (compound in accounting terms) until 24 months is up, at the very earliest. So all the required growth needed to have started two years ago. You can't just rack the growth up year by year in cows by putting them on a spreadsheet Beagle. And I still have yet to factor in the removing of the old cows at the other end of their production life. One day you should venture south of the Bombay Hills, and have a look at a real cow. Then you will find out why your attempt to create one on your 3D printer hasn't worked!

SNOOPY

I used to work on my Uncle's 5,000 acre sheep and beef farm in Gore, (that's Southland in case you don't know) :) to pay my way through University. Back in those days there was no work life balance and you worked 10 hours a day six days a week and went to Church on Sunday morning and were too tired on Sunday afternoon to do anything but rest. Ten weeks each summer. I flew home with a cheque for $600 for 600 hours work. Thankfully around 1980 $600 went a little further than it does today. I'm not making those growth numbers up my hound friend, they're the average of analysts on 4 traders so my experience or lack of in recent times is irrelevant.

[Beagle]

Learning to be happy with whatever gain you make,whether it be optimal or not is a great attitude to have. Anybody basing their happiness on optimal sharemarket gains are in a very sad place IMO (Have been in that position myself in the past)

Ain't that the God's honest truth mate.

[Hectorplains]

Don't underestimate the role of the Daigou, trade with China is not a linear process. Bellamy's made this mistake last year and halved their share price.

This AFR article from Jan outlines what happened:


Bellamy's big China mistake
by Angus Grigg (http://www.afr.com/business/angus-grigg-j7gbv.html)
Jumping at shadows is easy to do in China and judging from Wednesday's announcement, Bellamy's Australia did exactly this last year.
The infant formula maker appears to have been spooked by rumours, which began in April (http://www.afr.com/news/world/asia/china-customs-crackdown-may-hit-bellamys-organic-blackmores-20160516-gowpjb), suggesting China's Customs Bureau was set to tighten up on products coming into the country via courier, mail and the suitcases of tourists.
That's the so-called "Daigou" or personal shopper channel, which had been the main route into China for Bellamy's and plenty of other foreign products.
For a period in May it appeared authorities were serious about crimping this channel, as parcels were searched and additional import taxes demanded

But the crackdown didn't last.

Unfortunately for Bellamy's it had already changed tact. (http://www.afr.com/business/retail/fmcg/how-bellamys-organic-came-unstuck-in-china-20161205-gt4dgk)
According to the company's "Business Update", from April last year it decided to "restructure its rout to market".
This meant rather than encouraging the Daigou to clean out supermarket shelves in Australia and send the infant formula to China via courier, Bellamy's wanted to sell directly to "Chinese re-sellers" like JD.com and Alibaba's Tmall.
In hindsight that was a terrible decision.


Data gleamed from JD.com shows Bellamy's attempted to stimulate demand in China in late June by cutting prices by 10 per cent.
This clearly didn't work, but worse for the company the discounting appears to have annoyed the Daigou in Australia, who found their margins under pressure.
By October, as stocks continued to build up in China, the discounting went crazy. Prices on JD.com, the country's largest retailer, were cut by a further 30 per cent to levels similar to those in Australia.
That meant there was no margin for the Daigou, who quickly switched to other brands. This would have been tolerable if the product was moving in China, but this was clearly not the case as the discounting resumed after slower than expected sales during the Singles Day shopping festival in mid-November.


That now leaves the price of Bellamy's in China lower than in Australia. (http://www.afr.com/business/retail/fmcg/bellamys-stands-down-ceo-laura-mcbain-20170111-gtpbj9)
"The mistake they made was treating China and Australia as two separate markets," said one Daigou who asked not to be named.
"It's the one market."
She went on to explain that as soon as retail outlets in either Australia or China start discounting, those buying from the Daigou demand the price reduction be passed on to them.


"If a brand is continually running discounts then the Daigou will lose confidence in this brand and switch to another," she said.
For mothers in China this switch has been to A2's infant formula range, which now commands the premium once enjoyed by Bellamy's.
Worse for Bellamy's the discounting in China has spread to Australia, where both Coles and Woolworths are offering sizeable discounts.
This leaves Bellamy's facing the worst of all situations (http://www.afr.com/markets/equity-markets/investors-blindsided-by-bellamys-announcement-20170110-gtp8w2).


Its attempt to move away from the Daigou channel, in an effort to regain control of its brand, has actually left it with less control (http://www.afr.com/brand/chanticleer/heads-roll-as-bellamys-fights-for-survival-20170111-gtph34).
It is now at the mercy of China's big e-commerce retailers whose main priority is to clear excess stock rather than rebuild the brand.

[Snoopy]

We are deviating from the thread ... however - almonds are not nuts ... i.e. the warning is justified (they probably use the same mill as well for nuts - and traces of nuts might be mixed with the almonds).


Well I knew that peanuts were not nuts, but had not heard anything similar about almonds. A quick lookup on Mr Google yields this:

http://www.todayifoundout.com/index.php/2010/04/almonds-are-not-nuts/

------

"Almonds are not nuts. In fact, an almond is the seed of the fruit of the almond tree. This tree bears fruits with a “stone-like” seed within."

"Fruits with these characteristics are called “drupes”. Specifically, a drupe is a fruit that has an outer fleshy part surrounding a shell that contains a seed. Other drupes include fruits from walnut trees and coconut trees."

"The seed inside the almond fruit is what is commonly referred to as an almond “nut”, even though it’s not a nut. A nut is a hard shelled fruit that has an indehiscent seed; more simply, a hard shelled fruit that doesn’t open to release its seed(s). An example of a true nut would be an acorn or chestnut."

"Other “nuts” that aren’t include Brazil nuts, Cashews, Walnuts, Coconuts, Macadamia nuts, Peanuts, and Pistachios, among others."

------

So while BP is absolutely correct, it looks like almost everything else you can buy in the bulk bin section of the supermarket that mascarade as nuts, are not nuts either!

SNOOPY

[Snoopy]

I'm not making those growth numbers up my hound friend, they're the average of analysts on 4 traders so my experience or lack of in recent times is irrelevant.


The outrageous growth predictions made me think that whoever drew them up had never been on a farm.
I would suggest Beagle, that the average analyst on 4 traders knows a lot less about farming than you do! Just because an analyst wrote it down, that doesn't make it right.

SNOOPY

[BlackPeter]

The outrageous growth predictions made me think that whoever drew them up had never been on a farm.
I would suggest Beagle, that the average analyst on 4 traders knows a lot less about farming than you do! Just because an analyst wrote it down, that doesn't make it right.

SNOOPY

Snoopy, you are right that it takes time to breed new herds. However - what we both don't know is how much A2-milk they currently sell as "standard" milk in these 25kg paper bags. I asked this question re A2 supply several times (during AGM's and in site visits) ... and while they never come up with hard figures (apparently commercially sensitive) the message is always that their A2 supply is lots.

As well - standard herds supply a mix of A1 and A2-milk. If you need more A2 milk, in the first instance there is no need to breed more A2-cows, but you just need to sort and separate your cows - and within days you can turn a large "standard milk herd" into a A1-milk herd (and keep selling the milk as standard milk) and an A2-milk herd (producing premium A2 product).

You don't need to breed - just two seperate paddocks and separate milking equipment for the two milk sorts.

It is not like A2 being something new ... many herds always supplied mainly A2-milk (e.g. Jersey or Dexter) and even most NZ high performance herds produce to roughly 50% A2. If you want to sell that as A2, than you just need to make sure you separate the A1-cows .... and this is just some testing and organisation .... no need for lots of (time consuming) breeding.

Obviously - over time you will want to move your herd to "pure" A2. Saves the time and effort to test (and if necessary separate) every new heifer.

[Pipi]

You are definitely right BP, there are a lot of A2 cows out there, they either have been DNA tested and identified but the farmer can't get it picked up, so it just goes into the normal milk supply or they haven't been DNA tested yet, which would not take long.

[Snoopy]

As well - standard herds supply a mix of A1 and A2-milk. If you need more A2 milk, in the first instance there is no need to breed more A2-cows, but you just need to sort and separate your cows - and within days you can turn a large "standard milk herd" into a A1-milk herd (and keep selling the milk as standard milk) and an A2-milk herd (producing premium A2 product).

You don't need to breed - just two separate paddocks and separate milking equipment for the two milk sorts.

It is not like A2 being something new ... many herds always supplied mainly A2-milk (e.g. Jersey or Dexter) and even most NZ high performance herds produce to roughly 50% A2. If you want to sell that as A2, than you just need to make sure you separate the A1-cows .... and this is just some testing and organisation .... no need for lots of (time consuming) breeding.


The short answer BP, is that you are right. The problem is that your solution of 'two separate paddocks' and 'separate sets of milking equipment' is not going to work in practice for most dairy farms. That would be far too capital intensive and time intensive. Going from milking twice a day to milking four times a day would drive most farmers spare. I am not aware of a single farm taking up your suggestion, sensible though it is in theory. I guess you could flush your existing milking equipment out even more thoroughly than is the case now. But you would probably have to market that milk as "A2 (may contain traces of A1)" which kind of defeats the point.

SNOOPY

[Beagle]

So farmers who want to join in the supply of A2 milk will do deals with other farmers to rationalise the nature of their herds...no big deal is it to get more raw material.
The bottleneck has been in the processing and we have this from Synlait to consider - my emphasis added.

Synlait delivering on growth strategy and reports $38.2m
8:30am, 19 Sep 2017 | FLLYR
Synlait (NZX: SML; ASX: SM1) has reported their strongest performance yet with a net profit after tax of $38.2 million, double digit growth in profit margins and revenue increasing 39% to $759 million.
The results for the financial year ending 31 July 2017 (FY17) were achieved alongside several initiatives to prepare for future growth.
“Our shareholders supported this growth focus in September 2016 when we successfully raised $97.6 million to invest in our business,” said Graeme Milne, Chairman.
Mr Milne said Synlait’s current balance sheet is in a very good position with net debt down from $214 million to $83 million, and along with retained earnings, the company is in a good position to fund its growth strategy.
Demand for higher margin products continued to rise, with finished infant formula volumes growing 17% to 18,776 MT and margins before tax increasing by $10 million.
“We will continue to grow both top and bottom lines at pace. We see considerable opportunities to solidify our current ingredient and infant formula positions, and to enter new categories. A more profitable, more diversified and lower risk business is our goal and we will make good progress towards this in FY18,” said Mr Milne.
Innovating across the value chain has allowed Synlait to develop strong customer partnerships with category-leading customers and according to Managing Director and CEO John Penno, FY17 was a year of consolidation ahead of an expected period of solid growth.
“We own and control every step in our value chain, right from differentiating the milk supply behind the farm gate through to managing market access for our customers. We guarantee an unrelenting focus on quality, integrity and value in this system, offering a powerful point of difference for our customers and their consumers,” said Mr Penno.
“Our attention is on accelerating our infant formula business, and preparing to launch into new high returning dairy categories. We are also working to reinvigorate our ingredients business, and add value by systematically moving our milk products into consumer packaged formats.”
Synlait’s partnership with The a2 Milk Company has continued to grow in volume and value and both companies remain confident that registration of their infant formula with the China Food and Drug Administration (CFDA) will be received before 1 January 2018.
“We continue to be excited about the potential of our partnership with Munchkin Inc. and their range of Grass Fed™ infant formula products. Once we’ve completed the United States Food and Drug Administration (FDA) registration, it will be one of a very small number of imported infant formulas in that market,” said Mr Penno.
Synlait confirmed that their total average milk price for the 2016 / 2017 dairy season is $6.30 kgMS, consisting of a $6.16 kgMS average base price and a seasonal and average value added premium payment of $0.14 kgMS.
Synlait’s forecast milk price of $6.50 kgMS for the current 2017 / 2018 dairy season remains unchanged.
Mr Penno said the increase from FY16’s $3.91 kgMS will be well received by Synlait’s Canterbury milk suppliers and the premium payments totalling $8.9 million (FY16: $5.7 million) reward milk suppliers that create value behind the farm gate with programmes like a2 Milk™, Grass Fed™ and Lead With Pride™.
“Our milk suppliers go above and beyond by designing their farm practices to meet the needs of our customers. We’re coming out of a period of low prices and I want to acknowledge the relentless work they’ve done to adapt their business during this time and their on-going commitment to making the most from milk with us,” said Mr Penno.
Underpinning the expansion of Synlait’s infant formula business is the acquisition of a second site in Auckland to double blending and consumer packaging capacity and a substantial investment to double the capacity of their wetmix kitchens in Dunsandel.
“Investing in Synlait Auckland and our wetmix facility at Synlait Dunsandel will relieve any capacity constraints for the second half of FY18.” said Mr Penno.
“We are also investing in three high specification sachet packaging lines in Dunsandel. In the same way we offer our customers finished infant formula in retail-ready packaging, we will offer a range of modern sachet formats,” added Mr Penno.
To bring new product options and ever-improving product quality, Synlait’s increasing scale and earnings will see investment in research and category development rise from 1% of revenue to 1.5% in coming years.

“Focusing on new product development for existing and new customers and markets, improving production processes and reducing production costs will lift our earnings in the short to medium term,” said Mr Penno.
Building a world-class leadership team in FY17 saw the appointment of several international executives bring a range of highly sought after expertise to Synlait’s Senior Leadership Team.
“The added strength and capability in our leadership team positions us well to continue delivering on our ambitious plans. As well as a strategic focus on the future, we’re starting to see the benefits that a high calibre leadership team can bring to new and evolving areas of our organisation,” said Mr Penno.
“Alongside our preparation for another phase of rapid growth, we’ve achieved a solid increase in profit and balance sheet strength in FY17. We intend to increase margins and operational efficiency, as well as canned infant formula volumes in FY18 to 30,000 MT – 35,000 MT, as a result of our preparation in FY17.”
“We expect to announce further plans in due course. These plans will allow us to keep up with medium to long term infant formula demand, as well as signal new high-returning product categories we intend to move into in the coming years.”

[Snoopy]

So farmers who want to join in the supply of A2 milk will do deals with other farmers to rationalise the nature of their herds...no big deal is it to get more raw material.


Sounds unlikely. I wonder what farmer would seek out less profitable A1 cows to swim deliberately against the tide? If I was a farmer I would be gradually shifting to A2 myself via 'in house breeding' over a roughly ten year period. That would be the path of least effort.

SNOOPY

[Beagle]

Sounds unlikely. I wonder what farmer would seek out less profitable A1 cows to swim deliberately against the tide? If I was a farmer I would be gradually shifting to A2 myself via 'in house breeding' over a roughly ten year period. That would be the path of least effort.
SNOOPY

One that has legacy debt issues, of which there are vast numbers. I am sure their will be some cash involved in any herd type rearrangement.

[see weed]

Up again 23c. But very interesting. Have mentioned this before twice in the last year or so. The 30,000 man or woman is back again. Looks to me like depth massage? Am I right or wrong? 30,000 order moving up and down 10 times in 5 min. from 7.33 to 7.34 to 7.35 to 7.37 then back to 7.34 then up again repeating last sequence.Looks like big order coming up then goes back down again, pushing other buyers into buying. Has anyone else noticed this?:confused:

[couta1]

Up again 23c. But very interesting. Have mentioned this before twice in the last year or so. The 30,000 man or woman is back again. Looks to me like depth massage? Am I wright or wrong? 30,000 order moving up and down 10 times in 5 min. from 1.33 to 7.34 to 7.35 to 7.37 then back to 7.34 then up again repeating last sequence.Looks like big order coming up then goes back down again, pushing other buyers into buying. Has anyone else noticed this?:confused: This stock is highly manipulated with plenty of games being played out on a regular basis, even those setting the price targets are the biggest shorters of the stock.

[Beagle]

Must be our friend Winner dabbling in the market. He did he was back into this in a big way. Probably buying blocks of 30,000 shares here there and whenever.

[JeremyALD]

Must admit I've finally bought back a2 after selling out at $3. Decided I couldn't take it anymore and I'm happy to lose a bit if it doesn't work out just so I don't keep thinking about what I've missed!

So far up 3% in a couple of hours haha

[777]

Can you explain the small numbers being traded. When they go through the sell column reduces by the same number but the buy column doesn't. I was watching when there was one seller at 738 and their "wanting to sell" figure kept reducing 2 shares at a time.

[Beagle]

Must admit I've finally bought back a2 after selling out at $3. Decided I couldn't take it anymore and I'm happy to lose a bit if it doesn't work out just so I don't keep thinking about what I've missed!

So far up 3% in a couple of hours haha

The trend is your friend. All you have to do with this stellar growth company is keep an eye on the 30 day MA and don't ever sell unless it breaks down through that indicator. That's my strategy and for what its worth I think that's at least as good as any other one.
It crossed my mind this morning for about a millisecond to take a little bit of profit because this has now become bigger than SUM of my other investments that I strongly believe in their business case but why fight the trend when its your best friend !
Beagle best wisdom is your paws get sore swimming against the tide so almost always try and swim with it !

[couta1]

Can you explain the small numbers being traded. When they go through the sell column reduces by the same number but the buy column doesn't. I was watching when there was one seller at 738 and their "wanting to sell" figure kept reducing 2 shares at a time. Bot trading.

[RGR367]

Bot trading.

Whatever, took some money off the table as the temptation was to great at higher than 730. But may it continue some more as I got more to sell :t_up: Looking like a mini version of XRO on its way up then :p

[777]

Bot trading.

Thanks.That got me googling.