ATM - A2 Milk Corporation Limited

[Beagle]

Just go for a run MM and pontificate on the joys of A2 milk. That's what I'm about to do!
Hound heading out for a walk too with, "for some strange reason" more than usual spring in my paws :)

[Vagabond47]

.... the market is clearly saying the deal with Fonterra the (world's biggest dairy company)....

Errr, nope. Fonterra is #6 Nestle is twice as large, Lactalis, Danone etc. https://research.rabobank.com/far/en/sectors/dairy/Dairy-top-20-2017.html

Also, in my mind this is one stock that will be very hard hit if there is a global recession.. when money starts getting tight people will stop looking at Organic/Free-range/A2/GMO free etc and just buy what is cheaper.

[Beagle]

A huge percentage of the Asian population in particular are lactose intolerant or believe they are lactose intolerant and cannot have regular A1 milk products regardless of whether we're in a recession or not.

[flyer]

$14 plus, surely I should sell???

[Balance]

$14 plus, surely i should sell???

If you listen to Forsyth Barr (of Feltex fame), then it is time to let go?

:)

:D :D :D

[sb9]

$14 plus, surely I should sell???

Reluctantly sold a 10th of my holdings at $14+ just now...

[silu]

There's gold in them cows I tell ya

[silu]

On a serious note. Last night I didn't want to sell any but today it just seems to be a bit silly. Maybe take some cream of the top so to speak.

[Vagabond47]

A huge percentage of the Asian population in particular are lactose intolerant or believe they are lactose intolerant and cannot have regular A1 milk products regardless of whether we're in a recession or not.

lol wut?

A1 & A2 are proteins.
Lactose is a sugar.

They are not related..

A2 milk has just as much lactose as regular (A1 + A2) Milk.

[bull....]

5 dollars in 2 days haha rediculous , i follow it in aus now more volume better trading

[Ggcc]

I am thinking I need a beer. Too many heart beats per minute are happening to me 😊

[tipsy]

I'm not sure what i should be doing now.

[777]

5 dollars in 2 days haha rediculous , i follow it in aus now more volume better trading

Yep up 57+%

[bull....]

I'm not sure what i should be doing now.

i be buying some skirt to go with many beers:p

[t.rexjr]

I'm not sure what i should be doing now.

Do as your name suggests. it's after 12:00

[steveb]

I have not got into the details of the tie up with Fonterra,but is this going to be something the commerce commission is going to stick there beak into??

[Beagle]

If you listen to Forsyth Barr (of Feltex fame), then it is time to let go?

:)

:D :D :D

Gave up listening to them years ago mate.

[mfd]

I have not got into the details of the tie up with Fonterra,but is this going to be something the commerce commission is going to stick there beak into??

Seems unlikely, A2 milk is basically insignificant in terms of the NZ grocery market. Hopefully this will improve with fonterra's attention.

[Sideshow Bob]

Hound heading out for a walk too with, "for some strange reason" more than usual spring in my paws :)

Your walk should have been as good as my run Beagle. Glorious Central Otago day, sun in the sky, and come back and well through $14 bucks.

Giddy-up

[winner69]

Your walk should have been as good as my run Beagle. Glorious Central Otago day, sun in the sky, and come back and well through $14 bucks.

Giddy-up

Can you please go for another run Bob ....weathers good

[Malpaso]

I'm having flashbacks, is this Xero Mark II, pump and dump????

[LAC]

I was just about to say the last time I saw something take off like this was XRO. Dont see many people dumping this as fast a XRO though...this one is making money:)

[Balance]

lol wut?

A1 & A2 are proteins.
Lactose is a sugar.

They are not related..

A2 milk has just as much lactose as regular (A1 + A2) Milk.

A1 protein triggers the lactose intolerance.

There has been concerns too that A1 protein is also an allergy inducer and inhibits immunity. Watch this space!

[blackcap]

A1 protein triggers the lactose intolerance.

There has been concerns too that A1 protein is also an allergy inducer and inhibits immunity. Watch this space!

Correct, anecdotally I know people that cannot drink A1 milk but are happy enough with A2 milk.

[bull....]

5 dollars in 2 days haha rediculous , i follow it in aus now more volume better trading

must have jinxed it , it fallen dollar since the post ... sorry

[Filthy]

back down to $13.20. DT doing well today. stops to trigger shortly? maybe finish the day mid-12s?

[Sideshow Bob]

I'm having flashbacks, is this Xero Mark II, pump and dump????

I don't know much about Xero, but A2 has a seriously unique proposition, exponential growth, growing profitability, well-managed, under-promises/over-performs, strategic alliances and cost of acquisition of customers is minimal - they are fixing a need.

But does seem to be getting a tad frothy.....

[Filthy]

9524

chasms between buy and sell depth now eh!

[longy]

I am thinking I need a beer. Too many heart beats per minute are happening to me 😊

I am still keeping caffeine away from my system as doctor has instructed but I have not told her about A2 milk stock probably be worst for my palpitation condition. Lol.

[alistar_mid]

wish I was in it directly!

pretty amazing to see still

[dobby41]

chasms between buy and sell depth now eh!

Where do you get the depth view from?
Is it something that is readily available or something you pay for?

[Filthy]

it is free with ASB Securities (albeit delayed by 20mins) - not sure about what other brokers supply

[ohpark0119]

Where do you get the depth view from?
Is it something that is readily available or something you pay for?

ASB. If you trade on their platform, they provide live data for 3 months (not sure, could be 1 month?).

[toucan22]

Where do you get the depth view from?
Is it something that is readily available or something you pay for?

On ASB you get depth view for 3 months after making a trade. If you haven't made a trade in the last 3 months and want to see depth you have to initiate a buy or sell order, go down to step 4 and click on view depth to see whats going on.

[see weed]

Talk about the come back king. Those poor bast..... who bought at 14.62. Typical, Its just typical, as Mr Faulty would say, A2 just doing what it always has, with a nice sting in its tail. Can't sell anymore though, would make too much profit for this year:).

[couta1]

Talk about the come back king. Those poor bast..... who bought at 14.62. Typical, Its just typical, as Mr Faulty would say, A2 just doing what it always has, with a nice sting in its tail. Can't sell any though, would make too much profit for this year:). They won't be that poor when the SP is $20, as the song goes "It's only just begun". Sit back, relax and watch the games.

[Sideshow Bob]

They won't be that poor when the SP is $20, as the song goes "It's only just begun". Sit back, relax and watch the games.

Still up almost 9% or $1 for the day!

[Onion]

Where do you get the depth view from?
Is it something that is readily available or something you pay for?

Log in as an ANZ Securities client and you'll get real time depth (I think it is real time as you can see your own orders drop into the mix after a couple of minutes -- presumably the time it takes for ANZ Securities to validate the order and submit to the market).

[Bazingaboy]

Just when I was able to stock on on lobster, crayfish and caviar, then the market corrects itself :/

[Ggcc]

Well my heart rate has come down back to reality. While the company is running like clockwork I have no intention of selling. I may even buy more, but I have no idea when the right time to buy more will be.

[Balance]

Fantastic trading stock!

[voltage]

anyone buying at these prices

[Beagle]

I topped up with small parcels at the open yesterday at $10.75 and later in the day at $11.40. I'd be very keen for more at anywhere near that price range.

[see weed]

Well my heart rate has come down back to reality. While the company is running like clockwork I have no intention of selling. I may even buy more, but I have no idea when the right time to buy more will be.
I have been trying to figure that one out since it broke through $1.10c:D.

[longy]

I am wondering if shorters were buying or selling yesterday, but 20.8% were shorted on ASX.

[TideMan]

mmm if I sell 1,000 at $14, I'll recover twice my original capital investment. Hard to resist that.

[silu]

Couldn't resist and sold 10% of my holding at $13.50 today. Needed the money towards the mortgage and credit card bills.

[numbersman]

I was wondering if I should buy more at 5,6 & $7 ha ha. Shouldnt have sold so many at $4 ;(. But I'm at +1800% so cant complain :)

[see weed]

I topped up with small parcels at the open yesterday at $10.75 and later in the day at $11.40. I'd be very keen for more at anywhere near that price range.
Be patient Beags. It will always come back, but to what depth is the $64,000 question. I tried waiting for it to get back $3 and ended up jumping in at $7 reluctantly. Give it a week or two and let the dust settle, yeah right:D.

[Beagle]

Yeap good advice mate...just keeping a watchful eye on it waiting to pounce. Got back on the AIR roller-coaster today. Probably just a silly old dog going back to play with familiar toys. Can't help myself mate, those juicy dividends...there's no getting away from one's true character is there...a real dividend hound at heart.
Happy to make an exception for some stocks though :)

[Leftfield]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

[winner69]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

Betcha no science in those valuations ...just a gut feel methinks

[couta1]

Betcha no science in those valuations ...just a gut feel methinks Leave the Science to the Scientists, the Gutometer is your best valuation tool.

[Beagle]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

Thanks mate, please note folks those are $A valuations, here's McQuarie's research note http://www.macquarie.com.au/dafiles/Internet/mgl/au/apps/retail-newsletter/docs/2018-02/A2M220218e.pdf
Behind the paywall article on NBR today. Very brief synopsis:-
1. Average analyst targets raised 30% - about a third of this is due to the Fonterra deal, the rest fatter margins and sales growth exceeding expectations.
2. Knocking on the door of inclusion in the ASX top 50 index
3. Fonterra has effectively capitulated
4. Masterstroke by Geoff Babidge and demonstrated beyond any doubt that the I.P. behind A2 milk is real.

18 January 2018 behind the paywall article
The company admits it still struggles to get ahead of demand for its A2 Platinum infant formula. This despite Synliat doubling drying and canning capacity in November 2017.

One can but wonder how exceptionally strong demand for this product is now that its one of the few accredited suppliers into China ?

My thoughts on EPS for the second half.
1. Net profit after tax for the first four months of the year as announced late in 2017 was $52.3m.
2. Net profit just announced inclusive of November and December 2017, (note company was heavily supply constrained for much of Nov) was $98.5m therefore net profit for Nov and December combined was (98.5m - 52.3m) = $46.2m or $23.1m per month.
Assume supply constrained month of November was conservatively 15% below December when production and delivery from new Synliat's plants was in full swing suggests profit on approx. $21m in Nov and $25m in December.

Add a conservative 10% per month to that $25m per month on average for the six months to June this suggests monthly earnings on average of about $27.5m for the next six months = $165m, less extra spend on marketing in northern hemisphere in 2H to drive long term growth suggests net profit about $140m in the second half. This suggests an annual EPS of 13.7 cps for the first half and about 20 cps for the second half a total of 33.7 cps.

Above includes a lot of my own estimates and thoughts and my EPS estimate is ahead of Mcquaries which at 27.9 cps Aust = approx. 30 cps
As always DYOR.

[Leftfield]

Thanks mate, can you please note which if these is $A and which is $N.Z, (if any).


The only one I'm reasonably confident of is the Deutsche Bank at $NZ14 hence the 'DYOR' and as I'm out celebrating tonight, I won't be doing any more research for awhile!

Cheers all.

[minimoke]

Well,what a wild couple of days that has been. I'm a firm believer in locking in some profits - or at least making the most of an increase in personal assets. So no guessing what I've been up to tonight.

But how hard was it. There I was looking at $14. What do I do. Lock in profits or let profits run, or buy more or sell or what too many decisions and teh market moving way too fast.

So I had to take a step back and deliberately think that I am not a trader. I am no good at picking highs or lows. And I made the original buy decision with a five year window in mind. So I'm sitting here enjoying the last of my evening. not ruing the lost profits I didn't lock in and not worried about the market tomorrow. I know its going to drop
but the long term prospects are looking too good to be a worry.

[iceman]

Well,what a wild couple of days that has been. I'm a firm believer in locking in some profits - or at least making the most of an increase in personal assets. So no guessing what I've been up to tonight.

But how hard was it. There I was looking at $14. What do I do. Lock in profits or let profits run, or buy more or sell or what too many decisions and teh market moving way too fast.

So I had to take a step back and deliberately think that I am not a trader. I am no good at picking highs or lows. And I made the original buy decision with a five year window in mind. So I'm sitting here enjoying the last of my evening. not ruing the lost profits I didn't lock in and not worried about the market tomorrow. I know its going to drop
but the long term prospects are looking too good to be a worry.

I think taking a "step back" is a good idea mm. I got into A2M in December 2012 and another lot Feb 2013 for combined 100k shares at an average price of 51c. It was a rocky ride for 3-4 years with wild swings and years between 30 something cents and $1, including a takeover offer for 60c or 65c if I remember correctly.
At the time, not many had much faith in the company or its product. Snoopy kept telling us we were stupid as his calculations showed a PE of 36,000,000 at one stage, while some of us happily bought. He upadted his PE calculation a year later and it had dropped to 36,000 which he thought was an improvement :-)

Then she took off. After the stress of wild swings and continuous questioning of whether ATM (changed theticker by then) was the real thing or just fake science as many claimed, yours truly caved in eventually when SP started taking off and sold all at an average price of about $3.50 from memory. Was very happy with that return from 51c. But see where its gone today.
My lesson. By all means lock in some profit to make you feel good but never sell all your shares in a company that you still have belief in. This of course is not a recommendation but just a little story for you to think about, based on your above post.
Well done all holders of this great company.

[Raz]

Nice post Iceman.

[dobby41]

My lesson. By all means lock in some profit to make you feel good but never sell all your shares in a company that you still have belief in.

And a simple way is to sell enough to pay back the initial investment then the rest is free money - no worries.

[Leftfield]

Found this ABC news report interesting...... ABC News (http://www.abc.net.au/news/programs/the-business/2018-02-21/a2-milk-company-shares-are-on-the-boil/9475000)

[sb9]

Here's latest from Prof Keith and it starts....

"The joint venture agreement between Fonterra and The a2 Milk Company (A2M) to work together producing dairy products free of A1 beta-casein is a seismic shift for both the New Zealand and global dairy industries."...

https://www.interest.co.nz/rural-news/92287/keith-woodford-discusses-implications-a2-and-fonterra-working-together

[hardt]

Here's latest from Prof Keith and it starts....

"The joint venture agreement between Fonterra and The a2 Milk Company (A2M) to work together producing dairy products free of A1 beta-casein is a seismic shift for both the New Zealand and global dairy industries."...

https://www.interest.co.nz/rural-news/92287/keith-woodford-discusses-implications-a2-and-fonterra-working-together

Fonterra has essentially conceded a decade long dispute of the impact A1 beta casein has on certain peoples stomachs.

Even though this is purely Fonterra jumping on-board the money train, the agreement has put a nail in the coffin of this long dispute between the two parties.

[minimoke]

Found this ABC news report interesting...... ABC News (http://www.abc.net.au/news/programs/the-business/2018-02-21/a2-milk-company-shares-are-on-the-boil/9475000)
I like the bit where they have a stated preference to keep the $240m war chest intact for future possible capital purposes rather than handing back to shareholders. On the basis they can do a better job on capital return than a shareholder could if they got a dividend. So maybe there is a plant purchase in China on the horizon

[hardt]

I like the bit where they have a stated preference to keep the $240m war chest intact for future possible capital purposes rather than handing back to shareholders. On the basis they can do a better job on capital return than a shareholder could if they got a dividend. So maybe there is a plant purchase in China on the horizon

The appeal of overseas food brands in China... is that they are from overseas.
Made in New Zealand and Australia is seen as premium over there.

[Leftfield]

I like the bit where they have a stated preference to keep the $240m war chest intact for future possible capital purposes rather than handing back to shareholders. On the basis they can do a better job on capital return than a shareholder could if they got a dividend. So maybe there is a plant purchase in China on the horizon

I hope they steer well clear of plant in China......I can't think of many company's that have made China work. Better to use NZ/China/Aus free trade agreements and export into that market for the next few years. The premium for foreign brands will continue.... remember the melamine scandal!!??

In the video Peter Nathan said, "there was no capital used in the Frontera Deal." When you think about that.... and the benefits.... that's a huge steer to the way ATM should go. JMHO!!

[Beagle]

Well,what a wild couple of days that has been. I'm a firm believer in locking in some profits - or at least making the most of an increase in personal assets. So no guessing what I've been up to tonight.

But how hard was it. There I was looking at $14. What do I do. Lock in profits or let profits run, or buy more or sell or what too many decisions and teh market moving way too fast.

So I had to take a step back and deliberately think that I am not a trader. I am no good at picking highs or lows. And I made the original buy decision with a five year window in mind. So I'm sitting here enjoying the last of my evening. not ruing the lost profits I didn't lock in and not worried about the market tomorrow. I know its going to drop
but the long term prospects are looking too good to be a worry.

Amen to that. Yes there could be a slight pullback but why sweat the small stuff ?. We're all "in clover" with this, just sit back relax and take a 5 year view and let your profits grow. I do find myself easily obsessed with looking at the SP though, hard not too in the last couple of days and like you I got tempted when it hit $14.50 the other day. But I slapped my own hand and said stay away from the sell button. This will be $5-6 or possibly even more in a few years time after the 5:1 share split along the way. Why dismount from a thoroughbred horse to ride some donkey that's not growing at anything like the pace ?

[777]

Just remember Babidge leaves later this year. His replacement will have her own agenda.

[westcoaster]

My gutometer has served me well since entry with an average buy in of 36c.
I have deliberated on an almost daily basis over the past 3 years whether to sell or not all the way until yesterday. Many times dollars in the bank seemed like the "right thing to do", lucky I didn't listen to myself then. instead Ive relied on the masters to speak so refer back to this post I made all the way back then.

http://keithwoodford.wordpress.com/category/a1-and-a2-milk/ The science is what I believe gives this stock its value.


And because of that, I am still in. My reasoning has always been, "could I afford to buy back in for the price I sold?
And more to the point, how would I feel when this reaches $30-$45 next year.
GLTH...hang in there

[Beagle]

My gutometer has served me well since entry with an average buy in of 36c.
I have deliberated on an almost daily basis over the past 3 years whether to sell or not all the way until yesterday. Many times dollars in the bank seemed like the "right thing to do", lucky I didn't listen to myself then. instead Ive relied on the masters to speak so refer back to this post I made all the way back then.



And because of that, I am still in. My reasoning has always been, "could I afford to buy back in for the price I sold?
And more to the point, how would I feel when this reaches $30-$45 next year.
GLTH...hang in there

Nice post, well said.

[Sideshow Bob]

Just remember Babidge leaves later this year. His replacement will have her own agenda.

I hope they offer him a place on the board.

[hardt]

As ATM bounces around looking for 'support', it will be interesting to see where it settles after the next update due 21 Nov 17.

Here’s the updated summary of ST valuations including Snoopy’s, PT’s and Hardt’s latest…..

Snoopy - $NZ 3.00
PT - $NZ 4.72
BP Brokers - $A 5.85
Left field - $NZ 7.50
Hardt - $NZ 8.60 to …..$51.58 ( open to interpretation - am I being fair Hardt?)
sb9 - $NZ 8.25 to $10


In the meantime I expect more volatility.

3 months later...

[couta1]

My gutometer has served me well since entry with an average buy in of 36c.
I have deliberated on an almost daily basis over the past 3 years whether to sell or not all the way until yesterday. Many times dollars in the bank seemed like the "right thing to do", lucky I didn't listen to myself then. instead Ive relied on the masters to speak so refer back to this post I made all the way back then.



And because of that, I am still in. My reasoning has always been, "could I afford to buy back in for the price I sold?
And more to the point, how would I feel when this reaches $30-$45 next year.
GLTH...hang in there Love that price target, but it does highlight your point that going long is best(Unless trading is your main game) Think of all those people that bought XRO at $1 in 2007, it then reached $45 in 2014 from memory, and even after it's drop back, it's currently trading near $34 NZ, serious coin has been made by those using their Gutometer.PS-If XRO can reach those prices, A2 most certainly can.

[sb9]

3 months later...

All ST valuations are in water....thanks to the deal with Fonterra, but for that some us would've been bit closer to real price ;)

[Leftfield]

https://www.sharetrader.co.nz/images/misc/quote_icon.png Originally Posted by Left field https://www.sharetrader.co.nz/images/buttons/viewpost-right.png (https://www.sharetrader.co.nz/showthread.php?p=691751#post691751)
As ATM bounces around looking for 'support', it will be interesting to see where it settles after the next update due 21 Nov 17.

Here’s the updated summary of ST valuations including Snoopy’s, PT’s and Hardt’s latest…..

Snoopy - $NZ 3.00
PT - $NZ 4.72
BP Brokers - $A 5.85
Left field - $NZ 7.50
Hardt - $NZ 8.60 to …..$51.58 ( open to interpretation - am I being fair Hardt?)
sb9 - $NZ 8.25 to $10

3 months later...

3 months later... who would have thought eh?

I love being on the conservative side of wrong.....tho' I do recall my subsequent prediction of $NZ 12.00 (?) in 2018 made after the Nov 17 results. That too now looks way to conservative!

$NZ 20 by Dec 2018 now likely..... as for an end 2019 estimate SP I'll delegate that to Hardt!

Well done Hardt your forecast (or my interpretation of it) now looks the most realistic!!

[RGR367]

And a simple way is to sell enough to pay back the initial investment then the rest is free money - no worries.

Yup. It's all about free money when we talk about ATM now :t_up:

[RGR367]

............, serious coin has been made by those using their Gutometer.PS-If XRO can reach those prices, A2 most certainly can.

I'm with you on gut feel especially about XRO couta1 :) But it's more about "speculative deduction" then for ATM when I first heard/read it here. Still Gutometer, but looking like A2 will beat XRO to the high price of $45 sooner.

[Ggcc]

I don’t mind that the price is dropping as I am hopefully accumulating once funds become available. Long term plan on this share for me, but I am hoping more $11-$12

[hardt]

*Reposted without trying to sabotage format*

Marginal expansion is alive and well with A2M, forecasted to continue expanding as economies of scale takeover.
CAPEX is almost negligible, huge possibility they will put capital to earnings accretive opportunities (not forecasted possible upside)
Assuming* that 4M18 will be a higher proportion of FY18 revenues than 4M17 was to FY17... lower Q seq. growth.
4M17/FY17A = 28%
4M18/FY18E = 32%
Room for upside if sequential growth performed similarly with last year.
31% revenue growth over the next 3 years, I am told, is on the conservative side as well.
However the marginal expansion forecasted could be considered optimistic as net profitability rises to 24%



ATM.NZX

2017

2018

2019

2020



EARNINGS PER SHARE

12.29

22.95

31.55

40.75



FORWARD PER AT $850

37.00

26.94

20.86

19.54



SP AT 30 x FORWARD PE

688

946

1223

1500



PEG RATIO AT 30 x EARNINGS

0.35

0.80

1.03

1.22



SP AT 40 x FORWARD PE

918

1262

1630

2000



PEG RATIO AT 40 x EARNINGS

0.46

1.01

1.37

1.63










FORWARD EARNINGS GROWTH

90.01%

35.09%

29.17%

22.70%





How horribly wrong I was... thankfully not to my detriment as it usually is.

Left Field quickly revised his PT up to the teens while I thought I was keeping mine grounded at $9 :D

My target for the year is now $16.50



ATM.NZX

2017

2018

2019

2020



EARNINGS PER SHARE

12.29

29.00

44.00

55.00



SP AT 30 x FORWARD PE

870

1320

1650

1500



SP AT 40 x FORWARD PE

1160

1760

2200

2000



PEG RATIO AT 40X TTM EARNINGS

0.29

0.77

1.60

1.63



SP AT 60X TTM EARNINGS

737

1740

2640

3300



SP AT 40X TTM EARNINGS

491

1160

1760

2200

[moka]

https://www.cnbc.com/video/2018/02/20/china-and-the-us-are-key-markets-for-this-dairy-products-firm.html?play=1

(https://www.cnbc.com/video/2018/02/20/china-and-the-us-are-key-markets-for-this-dairy-products-firm.html?play=1)Goeff Babidge interview on CNBC

[winner69]

https://www.cnbc.com/video/2018/02/20/china-and-the-us-are-key-markets-for-this-dairy-products-firm.html?play=1

(https://www.cnbc.com/video/2018/02/20/china-and-the-us-are-key-markets-for-this-dairy-products-firm.html?play=1)Goeff Babidge interview on CNBC

They doing a good job promoting themselves (market wise) in the US ...must have a good local person on board who knows how to get this market exposure

Well done

[Ted2]

I like the bit where they have a stated preference to keep the $240m war chest intact for future possible capital purposes rather than handing back to shareholders. On the basis they can do a better job on capital return than a shareholder could if they got a dividend. So maybe there is a plant purchase in China on the horizon

Just don't let Fonterra make the decision on any purchase.................

I just realised that most of the, shall we say, just to be nice, lesser performing companies in this country, all start with F. Fletchers, Fairfax, Fonterra - and don't forget Feltex and Fortex! There you go - be wary of ever buying anything starting with an 'F'!! :laugh:

[Beagle]

Just don't let Fonterra make the decision on any purchase.................

I just realised that most of the, shall we say, just to be nice, lesser performing companies in this country, all start with F. Fletchers, Fairfax, Fonterra - and don't forget Feltex and Fortex! There you go - be wary of ever buying anything starting with an 'F'!! :laugh:

Oh my goodness you had me desperately doing a quick check of my portfolio to make sure nothing started with an F lol.

[777]

F&P in mine.

[Joshuatree]

Fark as Snapiti would say:t_up:
FPH is the exception here, looking good atm but not quite through the 60DMA yet.

[minimoke]

Just don't let Fonterra make the decision on any purchase.................

I just realised that most of the, shall we say, just to be nice, lesser performing companies in this country, all start with F. Fletchers, Fairfax, Fonterra - and don't forget Feltex and Fortex! There you go - be wary of ever buying anything starting with an 'F'!! :laugh:
You know why? The brokers recommending these come from a firm starting with F

[t.rexjr]

Seems LIC is onboard too, adding this page to their website

https://www.lic.co.nz/products-and-services/animal-health-and-dna-testing/a2-gene-test/

For the bulls amoung us, it’s all about “happy endings”

[Sideshow Bob]

Also posted on the Synlait page. Interesting re Fonterra.

https://issuu.com/farmersweeklynz/docs/farmers_weekly_nz_february_26_2018/1?ff=true&e=30768707/58629275

[peat]

Seems LIC is onboard too, adding this page to their website

https://www.lic.co.nz/products-and-services/animal-health-and-dna-testing/a2-gene-test/


And LIC were murmuring about having a public float so lets keep our ears open for that one.

[hardt]

Theo Spierings reiterated the fact that developing a supply of milk free from the A1 protein will not be very difficult.

Larger farms will be able to identify A2 only cows and split the herds accordingly. (guessing a lot of tests are going to be bought)

[whome]

Theo Spierings reiterated the fact that developing a supply of milk free from the A1 protein will not be very difficult.

Larger farms will be able to identify A2 only cows and split the herds accordingly. (guessing a lot of tests are going to be bought)

About 25% of the NZ dairy herd are Jersey breed. In reply to my query ‘Why not simply test all Jersey milking cows as a quick way to gear up A2 production, Prof Keith Woodford from Lincoln, a long time A2 advocate in his reply subdivided Jerseys into 3 categories, and said ‘Approximately 66% of NZ Jerseys are A2, 53% for Kiwi Cross, and 44% for Friesians.


A2 herds can come from any breed, but the difference between the breeds is significant in terms of length of time to complete the conversion.


In my opinion, the current situation is, to borrow from Mr Churchill, just the end of the beginning. it is easy to get a good supply of A2 where a farmer or farm group have multiple herds but a long journey where a farmer has only one farm. Given this situation, China and America can produce considerable amounts of milk quickly, but for Europe it will be a long journey.’

so, as Keith says, it can be done but individual cow testing and certification is still required.

LIC, Ambreed and others have long been able to offer A2 genetics. It’s more about dairy farmer uptake and their decision to make a major change to their dairy setup, as A2 certification then requires total separation, similar to deciding to go ‘organic’. In reality it is a whole herd or nothing situation, so it is the larger farmers or groups with several farms ina position to fast-track conversion. They can assign one whole farm as A2, then select A2 certified cows from their existing herds. The breeding option takes 6 to 10 years, and remains the long term option.

Keep in mind, all of Synlait’s present A2 production is supplied by just 60 farms. There are about 12,000 total dairy milk suppliers in NZ, and about 5,000 in Australia.

For Fonterra, it is the long term outlook. They have to manage the A2 message to their dairy farmers so their present market supply remains intact and unaffected. At the same time, they need to respond to the market demand generated by the perceived ‘more healthy’ A2 milk option, and be able to supply mainstream demand WORLDWIDE.

ATM is in the box seat at the moment, but it would be naive to think that advantage will last forever. Other brands touting the ‘healthy option’ will arise as ‘A1 free’ becomes mainstream, and any gap in supply will be quickly filled by the large dairy farms in US and China. No doubt the ATM patents will come under severe competitive challenge.

A2 is one of only 15 brands approved by Chinese authorities to supply IF to China. Removal of the China ‘one child’ policy and distrust of local suppliers are the drivers of this huge market which accounts for half of all IF global consumption. Long may NZ Inc. enjoy the advantage, but the clock ticks.

discl. Happy ATM holder.

[Beagle]

Thanks for sharing your thoughts whome. The reminder that no company is immune to long term competitive pressure is both timely and appropriate.
What will be fascinating to watch is how Fonterra go about managing the process of moving towards encouraging, (assuming any farmer needs it) their farmers to transition to A1 free herds without in any way wanting to besmirch the veracity of their long promoted health benefits of A1 protein.

Any way you slice and dice this thing though, this is a really major flip-flop by Fonterra and underscores the value of the science behind and I.P. of the A2 brand and ATM are the beneficiary of that.

Disc: Also a very happy ATM holder.

[Nasi Goreng]

awesome post whome.

I was thinking about how much of A2's value is based on IP and how much longer it is until patents run out and other companies start to supply A2 or A1 free milk. It's not really an if but when. A concern is that up until now, A2 have used contract manufacturers to produce their products which has allowed them to keep capital costs to a minimum. As these patents fall off, you have to wonder where the negotiating power will go with agreements with likes of SML / Fonterra etc who could potentially re-brand the product as their own. As well as that, all the other dairy players are going to want a part of the action.

A2 is generating a mountain of cash right now yet NTA is only $0.51 per share. Once the party is over, what will keep the growth engine going from here? and does this justify high PE.

[Sideshow Bob]

awesome post whome.

I was thinking about how much of A2's value is based on IP and how much longer it is until patents run out and other companies start to supply A2 or A1 free milk. It's not really an if but when. A concern is that up until now, A2 have used contract manufacturers to produce their products which has allowed them to keep capital costs to a minimum. As these patents fall off, you have to wonder where the negotiating power will go with agreements with likes of SML / Fonterra etc who could potentially re-brand the product as their own. As well as that, all the other dairy players are going to want a part of the action.

A2 is generating a mountain of cash right now yet NTA is only $0.51 per share. Once the party is over, what will keep the growth engine going from here? and does this justify high PE.

Patents is definitely one aspect to it, but also brand is the other. Would be interesting when have a product that would have another companies name on it.....unless they said "Free of A1 Protein" or something similarly obtuse. If others then promote that selling point, they are also broadening the market and bring attention to the genuine article.

Must admit, I always like a good solid asset backing. But can also look at it alternatively that in the meantime, generating growing profits and sales from minimal tangible assets, which is great for investors in that the company does not have a large amount of capital tied up in stainless steel and processing plants.

[Nasi Goreng]

Patents is definitely one aspect to it, but also brand is the other. Would be interesting when have a product that would have another companies name on it.....unless they said "Free of A1 Protein" or something similarly obtuse. If others then promote that selling point, they are also broadening the market and bring attention to the genuine article.

Must admit, I always like a good solid asset backing. But can also look at it alternatively that in the meantime, generating growing profits and sales from minimal tangible assets, which is great for investors in that the company does not have a large amount of capital tied up in stainless steel and processing plants.

I agree. But remember, this is milk we are talking about here. In the oil industry, its the guys with the wells in the ground which make the money.

[couta1]

I think I'll start worrying about these technicalities after the SP goes over $20, until then I'll just enjoy the rollercoaster.

[minimoke]

Patents is definitely one aspect to it, but also brand is the other. Would be interesting when have a product that would have another companies name on it.....unless they said "Free of A1 Protein" or something similarly obtuse.
"gluten Free". "Sugar Free" "A1 Free" all pretty much of a muchness

[dobby41]

If others then promote that selling point, they are also broadening the market and bring attention to the genuine article.

You imply that only product from ATM would be genuine when other market milk with only the A2 protein.
Can't see how that would stack up - easily copied when you are allowed to.
Probably also easy to get around with marketing - what is stopping other (in the world) from making A2 milk (apart from getting the cows which isn't that hard as discussed)?

[Beagle]

I think I'll start worrying about these technicalities after the SP goes over $20, until then I'll just enjoy the rollercoaster.

Company has a great track record of positively surprising the market AND updating guidance that significantly exceeds previous guidance and I note they said they were happy with January's trading.
Considering Synlait have only just been able to start doubling their canning and drying capacity I think the market is in for a BIG surprise with 2H results and I think the research I posted recently from Bell Potter $A13 valuation which contained therein an earnings estimate for FY18 of just 30 cents per share $N.Z. is likely to be very conservative, notwithstanding the significant extra marketing spend in the U.S. in this second half to set the company up for more growth in FY19 and beyond. Odds on favorite to hit $20 sometime in the next few years, possibly much earlier than anyone on here might imagine.

[hardt]

You imply that only product from ATM would be genuine when other market milk with only the A2 protein.
Can't see how that would stack up - easily copied when you are allowed to.
Probably also easy to get around with marketing - what is stopping other (in the world) from making A2 milk (apart from getting the cows which isn't that hard as discussed)?

In biopharma for instance.

Often times when 1 company has the only treatment for a small and misunderstood illness, there is an untapped portion of the public (and the professionals that diagnose them) who 1) aren't aware of an illnesses existence - 2) the treatment available on the market and 3) those who are misdiagnosed that know they are not getting any better.

Sales teams in orphan drug companies have a better understanding of the illness their drug treats than any medical professional out there.

Competitors come into the space and pump funds into developing understanding and awareness of what is on offer to patients and doctors, this expands the base of demand of all products in the space as more people are diagnosed... this benefits both the original sole treatment and competitors moving into the space.

[couta1]

Will be interesting to see how the price holds up over the next few months before the full year result. Depends on Insto game playing trying to scare retail holders out of their shares plus of course those pesky shorters, another thing might be Mr Babidge selling a good number of his shares before he steps down, that will scare a few noobs to cough up their holdings.

[Nasi Goreng]

Nasi is loving this debate.

My understanding of pharmaceutical companies is that when they have a major scientific break through, they are able to make supernormal profits as demand increases for their product and while their patents last. Over time, demand may still increase as more players enter the market but this does tend to have a negative impact on price. I imagine pharmaceutical companies buy patents from other companies with mountains of cash produced on product A during patent period and then launch product B... and the cycle continues.

A2 are currently doing a great job building and growing a brand/product niche. Fonterra (or other) may be perfectly poised to market their own products at such time they have sufficient herds of A2 cows etc. which might be right around the time A2 patents run out. Who will fill A2's cans then? and what negotiating power might a manufacturer have?

[hardt]

Nasi is loving this debate.

My understanding of pharmaceutical companies is that when they have a major scientific break through, they are able to make supernormal profits as demand increases for their product and while their patents last. Over time, demand may still increase as more players enter the market but this does tend to have a negative impact on price. I imagine pharmaceutical companies buy patents from other companies with mountains of cash produced on product A during patent period and then launch product B... and the cycle continues.

A2 are currently doing a great job building and growing a brand/product niche. Fonterra (or other) may be perfectly poised to market their own products at such time they have sufficient herds of A2 cows etc. which might be right around the time A2 patents run out. Who will fill A2's cans then? and what negotiating power might a manufacturer have?

A2MC patents do not prohibit anyone from selling their own milk free of the A1 protein currently.

The issue with Lion was their product had more than trace amounts of A1 ... with a massive sticker on the front saying:
"naturally contains A2"

A2MC own an incredible trademark

[peat]

yep, I will repeat for the third time I think, that you cannot patent A2 milk.
You can only patent a process to test the cow and find out what type of milk it will produce.

[Sideshow Bob]

yep, I will repeat for the third time I think, that you cannot patent A2 milk.
You can only patent a process to test the cow and find out what type of milk it will produce.

Yep, just about how you sell/brand/market it.

[Vish]

Yep, just about how you sell/brand/market it.

And majority of these companies love to push the boundaries on marketing.

[greenglass]

"yep, I will repeat for the third time I think, that you cannot patent A2 milk.
You can only patent a process to test the cow and find out what type of milk it will produce."

Sorry peat, but I believe you're wrong. They're not patenting the product but the BRAND, "A2"
Have you noticed that Fonterra have been very careful to avoid the use of that name? That's what the law suit with Lion is all about ( that Lion claims to have "A2 "in their product ). Look at Coca Cola, nobody else is allowed to use that name, but there are plenty of cola based fizzy drinks on the market.
This is a very powerful marketing advantage.

[freddagg]

"yep, I will repeat for the third time I think, that you cannot patent A2 milk.
You can only patent a process to test the cow and find out what type of milk it will produce."

Sorry peat, but I believe you're wrong. They're not patenting the product but the BRAND, "A2"
Have you noticed that Fonterra have been very careful to avoid the use of that name? That's what the law suit with Lion is all about ( that Lion claims to have "A2 "in their product ). Look at Coca Cola, nobody else is allowed to use that name, but there are plenty of cola based fizzy drinks on the market.
This is a very powerful marketing advantage.

Either way A2 sounds like an inferior product to A1

[peat]

Sorry peat, but I believe you're wrong. They're not patenting the product but the BRAND, "A2"
.............
This is a very powerful marketing advantage.
It may be, sure.
But, ultimately someone else can sell the same product and attribute it with the same benefits even though it has to be called something else.
Samsung didnt have to call their phone the Iphone for it to catch on. (even though they ripped it off completely). And now Samsung corner the smartphone market by numbers I think.

[couta1]

It may be, sure.
But, ultimately someone else can sell the same product and attribute it with the same benefits even though it has to be called something else.
Samsung didnt have to call their phone the Iphone for it to catch on. (even though they ripped it off completely). And now Samsung corner the smartphone market by numbers I think. ATM has first mover advantage and all that goes with that, will be years away before any other player could threaten their position, current holders are making hay while the sun is shining and will have large haystacks before that time comes.

[NZSilver]

Branding is so key in the IF market. I wouldn't be too worried about the patents.

[silu]

Branding is so key in the IF market. I wouldn't be too worried about the patents.

Most people couldn't tell the difference between Coca-Cola and Pepsi in a blind test yet one of them is market leader. That's why I want them to forgo a dividend for the time being. Use the money to market yourself as THE choice in A1 milk.

[777]

Most people couldn't tell the difference between Coca-Cola and Pepsi in a blind test yet one of them is market leader. That's why I want them to forgo a dividend for the time being. Use the money to market yourself as THE choice in A1 milk.

A2 I hope..

[silu]

Duh! I shouldn't try to think and type before I had my second coffee.

[MikeE]

Have we all seen the Sylait announcement? " Synlait acquires Pokeno site for infant formula growth"

[Sideshow Bob]

As an aside, along with the Fonterra announcement, it must make a bit of a mockery about Happy Valley's new plant suggesting they'll be processing A2 in the North Island.

[winner69]

Seeing so many hundreds of millions have been made on this non-dividend paying share rumour has it (or word on the street as nextbigthing would say) that IRD have requested the ATM share register

[Scooter]

Seeing so many hundreds of millions have been made on this non-dividend paying share rumour has it (word on the street) that IRD have requested the ATM share register
Should only be a problem if you were trading it and were not classified as a trader by not declaring profits and losses in your tax return

[nzsharetrade]

Should only be a problem if you were trading it and were not classified as a trader by not declaring profits and losses in your tax return


I know there is a number limit for selling cars per year if you over the number then you will be classified as a trader. is there a definition of trader? any reference?

[777]

I know there is a number limit for selling cars per year if you over the number then you will be classified as a trader. is there a definition of trader? any reference?

Have a look at this thread.

https://www.sharetrader.co.nz/showthread.php?9660-Tax-advice

[nzsharetrade]

Have a look at this thread.

https://www.sharetrader.co.nz/showthread.php?9660-Tax-advice

Ta. very interesting thread

[Sideshow Bob]

Ta. very interesting thread

Your name sort of gives it away there NZsharetrade! ;)

[Leftfield]

Seeing so many hundreds of millions have been made on this non-dividend paying share rumour has it (word on the street) that IRD have requested the ATM share register

Crikey Winner69 what are your mates at the Bowling Club going to do?

[winner69]

Crikey Winner69 what are your mates at the Bowling Club going to do?

Might get into trouble eh .... I won’t mention it

[Leftfield]

Might get into trouble eh .... I won’t mention it

Good idea....your secret is safe here!

[nzsharetrade]

A2 MILK EXECUTIVES CASH OUT OF SURGING SHARES WITH COMBINED $36.6 MLN PAYDAY
OMG, shall we do the same?

[sb9]

A2 MILK EXECUTIVES CASH OUT OF SURGING SHARES WITH COMBINED $36.6 MLN PAYDAY


OMG, shall we do the same?

Nothing to stop anyone if you're sitting in that kind of gains. I did my bit to sell down bit (10th) of my holding to lock in some profits at $14+ a piece.

[Beagle]

It was always a given that the CEO would reduce his stake as he's retiring this year. Last time he sold a meaningful stake at $3 last year some people followed suit and many have lived to regret that decision ! He's done a remarkable job, nobody should be surprised he wants to cash up some of his stake and enjoy the good life in his retirement. He still has 500,000 shares and 2.0m partly paid shares.
http://www.sharechat.co.nz/article/3d44ff12/a2-milk-executives-cash-out-of-surging-shares-with-combined-36-6-mln-payday.html?utm_medium=email&utm_campaign=A2%20Milk%20executives%20cash%20out%2 0of%20surging%20shares%20with%20combined%20366%20m ln%20payday&utm_content=A2%20Milk%20executives%20cash%20out%20 of%20surging%20shares%20with%20combined%20366%20ml n%20payday+CID_8ba67b2e9147f9ee6c652ebca2819cff&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle3d44ff12a2-milk-executives-cash-out-of-surging-shares-with-combined-36-6-mln-paydayhtml

[Sideshow Bob]

Maybe Geoff has to pay for his private yacht to sail off around the Caribbean? :p

But seriously couldnt begrudge him at least cashing out. Stellar job and create wealth for anyone holding for longer than 10 days!

[Sideshow Bob]

Couple of Articles on Farmers Weekly

https://farmersweekly.co.nz/section/dairy/view/a2-cow-genetics-demand-rising
https://farmersweekly.co.nz/section/dairy/view/a2-deal-provides-endorsement

[nzsharetrade]

it was just CEO last time or also the entire executives? I could understand the CEO part. I am still hoping to see they list in US...:D

[bull....]

dont know if anyone saw q & a sunday looked like winstones not happy about all the infant formula going to china .... probably wants it going other places as well?

[RTM]

dont know if anyone saw q & a sunday looked like winstones not happy about all the infant formula going to china .... probably wants it going other places as well?

Yes. I guess it’s a bit like having a well diversified share portfolio. Dangerous having all your eggs in one basket.

[sb9]

Couple of Articles on Farmers Weekly

https://farmersweekly.co.nz/section/dairy/view/a2-cow-genetics-demand-rising
https://farmersweekly.co.nz/section/dairy/view/a2-deal-provides-endorsement

Very telling those articles about future demand for A2 milk, thanks for sharing.

[Beagle]

dont know if anyone saw q & a sunday looked like winstones not happy about all the infant formula going to china .... probably wants it going other places as well?

Don't think he's over enthusiastic about the Chinese having a controlling stake in Synlait.

[couta1]

[QUOTE=bull....;706637]dont know if anyone saw q & a sunday looked like winstones not happy about all the infant formula going to china .... probably wants it going other places as well?[/QUOTE) If Pike River is an example of anything other than rhetoric, then there's nothing to worry about.

[couta1]

Yes. I guess it’s a bit like having a well diversified share portfolio. Dangerous having all your eggs in one basket. Depends how strong your basket is, happy to have this basket loaded with eggs.PS-My only regret is not keeping the basket overflowing over the last couple of years

[RTM]

Depends how strong your basket is, happy to have this basket loaded with eggs.PS-My only regret is not keeping the basket overflowing over the last couple of years
That's until we get Foot and Mouth or something like that in NZ Couta. Something that stops our exports dead. Or Mr Peters really upsets the Chinese and they decide to buy their baby food from elsewhere. Yep, everything would drop.....but people would still need power....trademe....etc etc. I'm all for some diworsification, and yes, there is a cost to this as well.
Cheers
RTM

[couta1]

That's until we get Foot and Mouth or something like that in NZ Couta. Something that stops our exports dead. Or Mr Peters really upsets the Chinese and they decide to buy their baby food from elsewhere. Yep, everything would drop.....but people would still need power....trademe....etc etc. I'm all for some diworsification, and yes, there is a cost to this as well.
Cheers
RTM Hey RTM, Remember Mr Peter's wants to buy back all the power companies, he is still working out where the 10 Billion plus is going to come from to execute the deal. PS-Agree, some diworsification is wise.

[BlackPeter]

Don't think he's over enthusiastic about the Chinese having a controlling stake in Synlait.

Bright Dairy holds 39%. This is a big stake, but technically not a "controlling" stake.

And personally I must say - while there always will be shareholders who put their own agenda above the interest of all share holders do I not think that this attribute has anything to do with race or nationality.

As well - after the CBL debacle (as well as looking into many of the deads which happened in the aftermath of the GFC in the NZ Finance industry) do I rather have a bunch of Chinese investors on board of the companies I am invested in than a handful of Kiwi and Samoan dignitaries ...

Self interested, crooked and / or incompetent board members are coming from all races and nationalities including our own.

[NewTrade]

Google/Yahoo Finance charts have ATM at 129.1 (someones missed a decimal). Someone want to buy from me at their market price?

[Balance]

dont know if anyone saw q & a sunday looked like winstones not happy about all the infant formula going to china .... probably wants it going other places as well?

Winston is an economic buffoon - disciple of that equally pathetic accountant buffoon Muldoon.

Notice he says one thing in NZ and when he goes overseas, he says another thing?

Only the oldies, envies and greedies in NZ are fooled by him so relax.

[couta1]

Have been topping up over the last few days, now makes up about 40% of my portfolio total, not sure how far she will drop but going very long on this darling now. PS-I see BAL hit a high of $19.75 today and sits on a PE of 147 compared to A2's 61, I know which is the better buy by a long shot.

[couta1]

I see the shorters are staying clear of this stock currently, only 2.69% of total volume was shorted yesterday, many of them were severely burnt after the result and Fonterra deal, a dangerous stock to short IMO.

[Beagle]

Have been topping up over the last few days, now makes up about 40% of my portfolio total, not sure how far she will drop but going very long on this darling now. PS-I see BAL hit a high of $19.75 today and sits on a PE of 147 compared to A2's 61, I know which is the better buy by a long shot.

I agree and ATM is certainly growing faster. Reuters has the 2018 PE of BAL at 46 and ATM at 43. Historical PE's are irrelevant for companies growing this fast. Actually speaking of what PE year is appropriate the fact that we're almost into the last quarter of the FY18 year its probably best to consider their 2019 PE to make an intelligent decision on which is best and I see ATM's 2019 PE in the mid-late 20's which is great for a stock with such tremendous growth.

[Nasi Goreng]

I agree and ATM is certainly growing faster. Reuters has the 2018 PE of BAL at 46 and ATM at 43. Historical PE's are irrelevant for companies growing this fast. Actually speaking of what PE year is appropriate the fact that we're almost into the last quarter of the FY18 year its probably best to consider their 2019 PE to make an intelligent decision on which is best and I see ATM's 2019 PE in the mid-late 20's which is great for a stock with such tremendous growth.

Hey Beagle,

in this case for me, PE is absolutely relevant for ATM. When we look at PE’s of 30, 40 or 50 years, it is assuming profits are maintained at current levels for that period of time.

Now of course, A2 will continue to grow for a while which will shrink the current PE number.

Lets say in 3-4 years we get to a more comfortable number like 20 and the patents wear off, the competitive landscape changes and A2 don’t own any manufacturing facilities. Could A2 milk company peak and could Fonterra/SML/Competitor take advantage of A2 who have done the hard yards marketing the product. I keep on asking myself, 10 years from now, will there be other A2 suppliers and the answer I come up with is yes. In which case, why would anyone make A2 for A2 when they could do it themselves.

The brand is worth heaps, I’m not sure if it’s worth $10 billion.

Nasi

[Leftfield]

Hey Beagle,

in this case for me, PE is absolutely relevant for ATM. When we look at PE’s of 30, 40 or 50 years, it is assuming profits are maintained at current levels for that period of time.

Now of course, A2 will continue to grow for a while which will shrink the current PE number.

Lets say in 3-4 years we get to a more comfortable number like 20 and the patents wear off, the competitive landscape changes and A2 don’t own any manufacturing facilities. Could A2 milk company peak and could Fonterra/SML/Competitor take advantage of A2 who have done the hard yards marketing the product. I keep on asking myself, 10 years from now, will there be other A2 suppliers and the answer I come up with is yes. In which case, why would anyone make A2 for A2 when they could do it themselves.

The brand is worth heaps, I’m not sure if it’s worth $10 billion.

Nasi

Nasi, you have a point. However it is not all about patents.

It's also about branding. Many companies can make a drinkable cola, but there is only one Coca Cola.

If you begin to think of ATM as the Coca Cola of milk, then you maybe you will begin to see the branding potential.

Add to the branding potential, first mover advantage, no legacy manufacturing issues and the ability to rapidly move into other products/markets (yogurts, deserts, supplements etc etc) and you can begin to see considerable potential ahead for ATM.

Will the potential be realised? Who knows but so far ATM's track record is hard to beat and PE multiples have proven conservative.

[Beagle]

Ask yourself why people continue to pay three times the price for a Mercedes-Benz car compared to a Japanese brand. The vast majority of MB patents on their technology have worn off but people still buy them because Mercedes-Benz tell people their cars are the best in the world.
Now think about baby formula for your one and only little cute baby...are you going to take any chances with their life, or stick with the gold standard product that your friends have been using ?
When you wrap your mind around those issues you'll start to understand brand value, patents current or expired.
Agree with what Left Field has just also said above.
Just expanding the PE argument a little. A current year PE of 43 could reduce to half that if FY19 profits double and with an ongoing strong growth outlook past FY19 you could easily make the argument that next years PE is too cheap. I'll worry about the "what if's" in ten years time in about 6-7 years from now.
Besides that based on my forecast the current year PE is late 30's and there's plenty of companies trading on the NZX on a current year PE in the 30's with a vastly inferior growth rate or medium term outlook.

[minimoke]

Someone having a wee pull an ATM's chain today. 2.4% rise to around $12.86

[couta1]

Someone having a wee pull an ATM's chain today. 2.4% rise to around $12.86 Thought it might go a bit lower and fill a lower gap yet to be filled, didn't buy my final parcel in anticipation of that, happy with the bounce though, quite a bit of time before we would expect any significant announcement so could still go a bit lower.

[minimoke]

didn't buy my final parcel in anticipation of that, happy with the bounce though, quite a bit of time before we would expect any significant announcement so could still go a bit lower.Hmm - now up to $13.00

Edit. Is this what bots do - now $13.10. Though I see 32,100 went through at $13.06
(Edit $13.20 - cant keep up!)

[sb9]

Hmm - now up to $13.00

Edit. Is this what bots do - now $13.10. Though I see 32,100 went through at $13.06
(Edit $13.20 - cant keep up!)

Yes it moves faster, doesn't it....also note BAL is past $20 mark, who would've thought after their dire state of affairs from yester years and they're still waiting for their CFDA approval to come through for their product.

[couta1]

Yes it moves faster, doesn't it....also note BAL is past $20 mark, who would've thought after their dire state of affairs from yester years and they're still waiting for their CFDA approval to come through for their product. Yes a lesson in vision and patience with BAL. Many sold out for large losses when it tanked from around $16 to $3 odd a year or so ago, now look at it fly. PS-Ive learnt that lesson myself with other stocks.

[Leftfield]

ATM presentation to Goldman Sachs in New York Investors conference...... perhaps another reason for today's SP boost?

Here it is (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/315293/275958.pdf)

Word's getting out!!

[sb9]

ATM presentation to Goldman Sachs in New York Investors conference...... perhaps another reason for today's SP boost?

Here it is (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/315293/275958.pdf)

Word's getting out!!

Couple of golden nuggets that got my attention are launch of Pregnancy Nutrition Formula in 2H 18 and this bit..."Board continues to consider appropriate use of the Company's available capital including a review of opportunities to invest directly in blending and canning capability"

They can't be much more direct than that about their interest in invest in upcoming Synlait's plant in Pokeno.

Might see surge past $15 pretty soon, watch the space folks...

[winner69]

As I’ve said a couple times they are doing well wooing US investors ....obviously have a nan on the ground who knows tricks of the trade over there

[Beagle]

ATM presentation to Goldman Sachs in New York Investors conference...... perhaps another reason for today's SP boost?

Here it is (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/ATM/315293/275958.pdf)

Word's getting out!!

Very attractive presentation in more ways than one ! Disc: Happy holder.

[gbogo]

Been in California last three weeks. I visited a total of seven different Whole Foods, Safeway and Target stores during that time and didn't see a single A2 product in any of them. Tiny random sample but I was a little surprised. Is acceptance not as strong as they say? Or does it just suggest that there is still lots of upside?

[JeremyALD]

Been in California last three weeks. I visited a total of seven different Whole Foods, Safeway and Target stores during that time and didn't see a single A2 product in any of them. Tiny random sample but I was a little surprised. Is acceptance not as strong as they say? Or does it just suggest that there is still lots of upside?

That's interesting. Certainly very early days in the USA. They've got a big marketing spend planned this half so hopefully that brings some more exposure, but the US and UK certainly have had slower uptake than China and Australia where the product is selling like hotcakes.

[minimoke]

They will need to manage demands with production. No point entering a market and disappointing consumers.

[Leftfield]

Been in California last three weeks. I visited a total of seven different Whole Foods, Safeway and Target stores during that time and didn't see a single A2 product in any of them. Tiny random sample but I was a little surprised. Is acceptance not as strong as they say? Or does it just suggest that there is still lots of upside?

A bit of a concern.... maybe.

However, NZ has the same problem (i.e. A2 v hard to find.) Likewise in Aussie - reports of huge problems in keeping IF stocked in retailers etc.

Maybe it is a sign of demand exceeding supply.... if so, that's a nice problem to have.

[couta1]

Very good article in the Herald this morning on the company, someone who's not a dinosaur like me may be kind enough to attach it here.

[silu]

Very good article in the Herald this morning on the company, someone who's not a dinosaur like me may be kind enough to attach it here.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12009169

[winner69]

Very good article in the Herald this morning on the company, someone who's not a dinosaur like me may be kind enough to attach it here.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12009169

[Oliver Mander]

Been in California last three weeks. I visited a total of seven different Whole Foods, Safeway and Target stores during that time and didn't see a single A2 product in any of them. Tiny random sample but I was a little surprised. Is acceptance not as strong as they say? Or does it just suggest that there is still lots of upside?

i wouldn't be too bothered about this. The 1/2 year showed a very small exposure at the moment to US and UK (was it revenue of just $16m?) compared to their other markets. That's a drop in the ocean in the US. So it tends to highlight potential to me, enhanced by an increasing marketing effort. The very fact that they did an investor preso in New York yesterday is another indication of potential...

[sb9]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12009169

Very well articulated and beautifully written....

[Beagle]

Very well articulated and beautifully written....

Agreed.
I took another very deep breath and tried to cast a vision for where this stock will be in 5 years time.
Every time I do this I end up topping up some more despite being dead scared I'm paying too much based on (current known fundamentals), I refer to this as an occupational hazard as bean counters are trained to think about historical, known and reasonably foreseeable financial information and vision casting five years ahead does not come naturally, well not for this silly old dog anyway...

Every time I do this I end up being very pleased down the track I did. Despite paying just over $13 this time for a top-up I am pretty sure I will be very pleased in due course that I had the courage to invest further. The basis behind this investment is I am thinking about FY19's earnings and PE when they will have a full year access to the doubling of supply from Synlait's drying and canning facilities which they commissioned in Nov 2017. I think the FY19 PE is in the mid - late 20's range and with ongoing strong growth prospects this stock even at the current price still represents an outstanding opportunity to build wealth over the long term.

[winner69]

Very well articulated and beautifully written....

Yes Jamie did a good job, no doubt encouraged by the A2 person charged with raising the profile of A2 in the investment world

That person doing a great job

No matter how fantastic A2 is the more exposure it gets the more ‘fantasticer’ it becomes

That US presentation was a huge coup

Hope there is no ulterior motive in trying to seduce somebody to take them over.

[Beagle]

Really hope it isn't taken over before it gets into its stride properly.
The legendary KW thinks this could be another Danone in 5-10 years time.
http://www.4-traders.com/DANONE-4634/?type_recherche=rapide&mots=Danone
For those that don't know Danone is nearly 67 Euro's a share or about $115 Kiwi a share. This tired hound might be tempted to retire early if that happened :)

[nzsharetrade]

I would say Winston will not let that happen:DKiwi will not let that happen:D

[Sideshow Bob]

I like this quote:

"They are selling a real product, to real customers, for real dollars," Lister says.

[Nasi Goreng]

Just not in California... yet

I’ve been following the US Facebook page for a few years and they are definitely getting more likes on their posts but a lot of the people on Facebook posts don’t get it.

[silu]

Just not in California... yet

I’ve been following the US Facebook page for a few years and they are definitely getting more likes on their posts but a lot of the people on Facebook posts don’t get it.

What I like is that they are engaging with their customers. Too many companies just spam the timeline with their PR.

[RGR367]

I'm still buying at this price of $13 as I'm getting already scared about my paper profits on it. I have to somehow even it up or returned it to the Market :) Let's all enjoy the ride guys.

[winner69]

Looking forward to when Mad Money's Jim Cramer on CNBC gives A2 a plug

That'll be a good day

[Beagle]

Looking forward to when Mad Money's Jim Cramer on CNBC gives A2 a plug

That'll be a good day

Yeap that will be a good day but the best day will be if ATM gets included in the MSCI index, next announcement date 14 May. Won't it be a real shame if all those index tracker funds worth Trillions of dollars have to buy a stake in ATM... Be a really "disappointing" day that one :D

[winner69]

Yeap that will be a good day but the best day will be if ATM gets included in the MSCI index, next announcement date 14 May. Won't it be a real shame if all those index tracker funds worth Trillions of dollars have to buy a stake in ATM... Be a really "disappointing" day that one :D

Trillions ...now you’re talking

[Beagle]

Trillions ...now you’re talking
https://blog.craigsip.com/nz-reporting-season-the-winners-and-losers/?utm_source=insights-enews-090318&utm_medium=enewsletter&utm_campaign=insights-enews-090318&utm_content=winners-losers
Craigs reckon they're on track to do nearly $300m this year..wouldn't surprise me if they did. (That would be 41 cps and put them directly in line with BAL consensus earnings for 2018). BAL last traded at just over $A20.50 today...a sign of where ATM might be at later this year ?...you folks be the judge but I for one wouldn't be surprised. Remember you read it here first ! The hound currently close to leading the ST competition is picking $20 by year end or even before !!
SUM other company impressed them too.
Disc: Own both ATM and SUM with heavily overweight positions, topped up with SUM more of each today.

[hardt]

https://blog.craigsip.com/nz-reporting-season-the-winners-and-losers/?utm_source=insights-enews-090318&utm_medium=enewsletter&utm_campaign=insights-enews-090318&utm_content=winners-losers
Craigs reckon they're on track to do nearly $300m this year..wouldn't surprise me if they did. (That would be 41 cps and put them directly in line with BAL consensus earnings for 2018). BAL last traded at just over $A20.50 today...a sign of where ATM might be at later this year ?...you folks be the judge but I for one wouldn't be surprised. Remember you read it here first ! The hound currently close to leading the ST competition is picking $20 by year end or even before !!
SUM other company impressed them too.
Disc: Own both ATM and SUM with heavily overweight positions, topped up with SUM more of each today.

I think they mean EBIT of 300m for FY18.

[JeremyALD]

I think the SP is about fair at the moment. They need to start building sales momentum in US and UK for it to be worth more. I've picked up some more recently, happy to hold for the long term.

[Beagle]

I think they mean EBIT of 300m for FY18.

Not so sure about that. Initial modelling I did showed as high as 37 cps is quite possible. I think infant formula sales this half now that a ready supply is finally available is going to blow some people's expectations right out of the water.

[couta1]

https://blog.craigsip.com/nz-reporting-season-the-winners-and-losers/?utm_source=insights-enews-090318&utm_medium=enewsletter&utm_campaign=insights-enews-090318&utm_content=winners-losers
Craigs reckon they're on track to do nearly $300m this year..wouldn't surprise me if they did. (That would be 41 cps and put them directly in line with BAL consensus earnings for 2018). BAL last traded at just over $A20.50 today...a sign of where ATM might be at later this year ?...you folks be the judge but I for one wouldn't be surprised. Remember you read it here first ! The hound currently close to leading the ST competition is picking $20 by year end or even before !!
SUM other company impressed them too.
Disc: Own both ATM and SUM with heavily overweight positions, topped up with SUM more of each today. Okay, I'll join the hounds ramp, $20 by year end it is(Hopefully not in the form of a takeover offer)

[Beagle]

They might get to $25 if we're both holding a lucky year of the dog gold coin mate...get it quick before all the special lucky dog ones sell out :)
http://www.equity.co.nz/files/PsiMet%20Gold%20File.pdf Pamp 1 oz 999.9 lunar series dog...how could you go wrong :)
$25 impossible some might say ? Well they more than quadrupled from $2.99 on 31 March 2017 this financial year so its not beyond the bounds of possibility at all that they could more than double by Christmas.

[couta1]

They might get to $25 if we're both holding a lucky year of the dog gold coin mate...get it quick before all the special lucky dog ones sell out :)
http://www.equity.co.nz/files/PsiMet%20Gold%20File.pdf Pamp 1 oz 999.9 lunar series dog...how could you go wrong :)
$25 impossible some might say ? Well they more than quadrupled from $2.99 on 31 March 2017 this financial year so its not beyond the bounds of possibility at all that they could more than double by Christmas. Does that price promise come with a set of steak knives and a bottle of Amway dish drops.

[Beagle]

Does that price promise come with a set of steak knives and a bottle of Amway dish drops.
LOL I hear ya mate...shall try and curb my enthusiasm a bit as we're in for the long haul and quite apart from that this hound wants to get his snout into more so probably best if the shares don't hit $20 in the next wee while :)
Thanks for the link https://www.stuff.co.nz/business/102084151/infant-dairy-powder-can-factory-opens-in-christchurch

[whatsup]

Up UP and away again today !!

[minimoke]

Up UP and away again today !!Hasn't topped its 12 month high of $14.62. Will be happy to see a new high at some stage but no complaints so far.

[whatsup]

up UP and away again today nearly $14 bucks !!

[Beagle]

I topped up even more at the open today at $13.40, now makes up 20% of my portfolio...well it did at $13.40, now more, which is really going out on a limb for a fairly conservative investor.

[Leftfield]

I topped up even more at the open today at $13.40, now makes up 20% of my portfolio...well it did at $13.40, now more, which is really going out on a limb for a fairly conservative investor.

Good on you Beagle.... feel the fear and just do it!
(Disc ATM over 60% of my portfolio!)

[silu]

Reminds me of a line in Billions which went along the line of "If you're sitting on a monster you better ride it hard".

[sb9]

Good on you Beagle.... feel the fear and just do it!
(Disc ATM over 60% of my portfolio!)

I better not calculate ATM's share in my portfolio, it'll be scary :p

[Dust]

Reading this thread just keeps reminding me of the sad state of the NZX market, where investors resort to diversifying into a single name over the rest of the garbage on the exchange.

[sb9]

Reading this thread just keeps reminding me of the sad state of the NZX market, where investors resort to diversifying into a single name over the rest of the garbage on the exchange.

Yes, however the share of ATM's portion in my portfolio is out of buying a lot when it was very cheap compared to current sp and surge in price mainly in the last 18 months or so skewed its balance by a big margin.

I do have few other decent ones in my portfolio.

[Leftfield]

Reading this thread just keeps reminding me of the sad state of the NZX market, where investors resort to diversifying into a single name over the rest of the garbage on the exchange.

NZX currently one of the best markets in the World IMHO. (sb9's post 7944 applies to me also.) For the record, I'm in agreement with Buffet that diversification of a portfolio is over rated, and best for those who don't know what they are doing.

[Dust]

NZX currently one of the best markets in the World IMHO. (sb9's post 7944 applies to me also.) For the record, I'm in agreement with Buffet that diversification of a portfolio is over rated, and best for those who don't know what they are doing.

The me from a parallel universe might agree with ya, but when I look at the NZX page with 0 new listings, and all the big names dying to run to other exchanges I just cant haha

[Ted2]

I better not calculate ATM's share in my portfolio, it'll be scary :p

Mmmmmmmm mine's gone from about 20% share to over 85%. I think they call it overweight, but in this case I'm rather happy with obesity :t_up:

[Beagle]

Look harder...there's SUM very good companies on the NZX trading on compelling fundamental's...this is not the only compelling investment story by any means but certainly the best in my view :t_up:

[Oliver Mander]

Started at 6.5% of my portfolio (with a target 20% weight on "Dairy"), now at 22%.

[Beagle]

http://www.sharechat.co.nz/article/cc47857c/market-close-nz-shares-gain-a2-milk-rises-on-index-hopes-pushpay-up-while-heartland-drops.html?utm_medium=email&utm_campaign=MARKET%20CLOSE%20NZ%20shares%20gain%2 0A2%20Milk%20rises%20on%20index%20hopes%20Pushpay% 20up%20while%20Heartland%20drops&utm_content=MARKET%20CLOSE%20NZ%20shares%20gain%20 A2%20Milk%20rises%20on%20index%20hopes%20Pushpay%2 0up%20while%20Heartland%20drops+CID_26828b4790b46b 925d959196fdcd7175&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlecc47857cmarket-close-nz-shares-gain-a2-milk-rises-on-index-hopes-pushpay-up-while-heartland-dropshtml

Rumors of MSCI inclusion.

[MikeE]

http://www.sharechat.co.nz/article/cc47857c/market-close-nz-shares-gain-a2-milk-rises-on-index-hopes-pushpay-up-while-heartland-drops.html?utm_medium=email&utm_campaign=MARKET%20CLOSE%20NZ%20shares%20gain%2 0A2%20Milk%20rises%20on%20index%20hopes%20Pushpay% 20up%20while%20Heartland%20drops&utm_content=MARKET%20CLOSE%20NZ%20shares%20gain%20 A2%20Milk%20rises%20on%20index%20hopes%20Pushpay%2 0up%20while%20Heartland%20drops+CID_26828b4790b46b 925d959196fdcd7175&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlecc47857cmarket-close-nz-shares-gain-a2-milk-rises-on-index-hopes-pushpay-up-while-heartland-dropshtml

Rumors of MSCI inclusion.

What will inclusion in that index mean Beagle?

[BlackPeter]

What will inclusion in that index mean Beagle?

Funds with deep pockets being required to buy :t_up:

[winner69]

Funds with deep pockets being required to buy :t_up:


highlighted the important part

[Beagle]

I can't see any reason why this won't happen as companies like RYM which is but one example which has a significantly smaller market cap are part of the MSCI index.
Index rebalance / adjustment announcement date 14 May 2018, effective date Friday 1 June 2018. Expecting some interesting bidding in the closing 15 minute match process on 1 June :t_up: :t_up:

[winner69]

ATM to me is just a line on a chart .....and a beautiful line at that

I know it’s into milk and it makes heaps of money

I glanced through an article on stuff yesterday and it mentioned things like ‘peak milk’ and ‘peak dairy factories’ ........should I be worried

ATM share price doesn’t look like it’s going to stop peaking for a while

[couta1]

ATM to me is just a line on a chart .....and a beautiful line at that

I know it’s into milk and it makes heaps of money

I glanced through an article on stuff yesterday and it mentioned things like ‘peak milk’ and ‘peak dairy factories’ ........should I be worried

ATM share price doesn’t look like it’s going to stop peaking for a while Just rhetoric mate, keep the tunnel vision, take a warm milk bath and relax.

[Beagle]

Just rhetoric mate, keep the tunnel vision, take a warm milk bath and relax.

He'd be struggling to find enough fresh A2 milk to cover his ankles mate. My local supermarket which is BIG or organics and other healthy stuff sometimes has it in stock. Had one 2 liter bottle left today that I pounced on. Mixes very well indeed with Canterbury Cream liqueur I can tell ya from first hand experience.
Mix 200 mls A2 milk with 200 mls Canterbury Crème and some ice cubes. Repeat a couple of times for a very pleasant evening indeed. "Purrfect" way to celebrate a good day on the market :t_up:

[minimoke]

Mix 200 mls A2 milk with 200 mls Canterbury Crème and some ice cubes. Repeat a couple of times for a very pleasant evening indeed. "Purrfect" way to celebrate a good day on the market :t_up:You must have gotten through a fair few bottles of late!

[winner69]

You must have gotten through a fair few bottles of late!

Who makes this Canterbury Creme? Can we buy shares in that as well?

[Beagle]

You must have gotten through a fair few bottles of late!

Have to check myself into rehab if the SP keeps roaring up LOL.

[minimoke]

Have to check myself into rehab if the SP keeps roaring up LOL.On a serious note whose your Canterbury Creme dealer. 20 minutes from here I cant find any?

[Beagle]

On a serious note whose your Canterbury Creme dealer. 20 minutes from here I cant find any?

I just go to the biggest liquor shop within a few km's of where I live in Auckland mate but for some strange reason yesterday their stock was looking sadly depleted :)
I usually pay $15.99 but I did a net search for ya and you can get it for $13.99, actually $26.99 for 2 = $13.50 each. Hmmm... I guess you have to order by the case lot to make delivery per bottle reasonable, that's a bit sad isn't it :D
http://www.topshelfliquor.co.nz/estore/style/94123609.aspx#.WqeC5kxuKzk

[minimoke]

I just go to the biggest liquor shop within a few km's of where I live in Auckland mate but for some strange reason yesterday their stock was looking sadly depleted :)None available locally and I'n Canterbury. go figure. Must be shipping all available supplies north.

[winner69]

I just go to the biggest liquor shop within a few km's of where I live in Auckland mate but for some strange reason yesterday their stock was looking sadly depleted :)
I usually pay $15.99 but I did a net search for ya and you can get it for $13.99, actually $26.99 for 2 = $13.50 each. Hmmm... I guess you have to order by the case lot to make delivery per bottle reasonable, that's a bit sad isn't it :D
http://www.topshelfliquor.co.nz/estore/style/94123609.aspx#.WqeC5kxuKzk


Mentions Heartland in the description ....must be good

[winner69]

Just rhetoric mate, keep the tunnel vision, take a warm milk bath and relax.

So fundamentals means squat all when it comes to A2

Sentiment rules ...love euphoria .....just follow that line on the chart eh

Be $15 soon ....then $20 ....no worries

Loving it

[Sideshow Bob]

More from Keith Woodford....

https://www.stuff.co.nz/business/farming/opinion/102242861/keith-woodford-a2-milk--what-happens-now

[Beagle]

Market already looking ahead to FY19 and possibly estimating earnings as high as 50 cps which would put them on a PE of 28 which considering the incredible growth and IP then what you suggest about the likely price track is more than likely quite right. Could double by this time next year.

[winner69]

Market already looking ahead to FY19 and possibly estimating earnings as high as 50 cps which would put them on a PE of 28 which considering the incredible growth and IP then what you suggest about the likely price track is more than likely quite right. Could double by this time next year.

So this year and next year is just noise ...the only ‘fundamental’ thing you need to know is A2 is the next Danone and one day in a few years time will be worth heaps

That sounds good ....and nice and easy ....so I’ll just keep watching the line for on the chart go up.

[Leftfield]

Aussie Morgan Brokers report released yesterday targets $A14.40 SP (i.e. $NZ 15.40)

9556

[Ted2]

Aussie Morgan Brokers report released yesterday targets $A14.40 SP (i.e. $NZ 15.40)

9556

Great to see this broker is on the ball. 'Initiating' coverage only now? Wonder where they were when price was at $2, or $4, or $6 - hang on did it even do $6 and just go straight to $7? :laugh::laugh::laugh:

[Leftfield]

Great to see this broker is on the ball. 'Initiating' coverage only now? Wonder where they were when price was at $2, or $4, or $6 - hang on did it even do $6 and just go straight to $7? :laugh::laugh::laugh:

Well said, Brokers have always been behind the play on this one. Can't help thinking brokers are the last resort of the uninformed.

[Balance]

Well said, Brokers have always been behind the play on this one. Can't help thinking brokers are the last resort of the uninformed.

Demand and supply.

Most brokers respond to clients' requests for coverage - especially institutional clients.

Be grateful that brokers come lately so their clients buy the shares at higher prices!

[Ted2]

Demand and supply.

Most brokers respond to clients' requests for coverage - especially institutional clients.

Be grateful that brokers come lately so their clients buy the shares at higher prices!

Very good point!!

[sb9]

More media coverage...

https://www.stuff.co.nz/business/farming/102252460/polled-dairy-cows-will-put-nz-ahead-american-vet

Few snippets from above article...

"People think de-horning is absolutely brutal. Go for polled animals.
"New Zealand listen to me, if in 10 years you can sell milk to the world that came from polled animals that were A2/A2 you would wipe out the competition."

[couta1]

Wow, take at look at the BAL share price on the ASX, waiting patiently for the next A2 run. PS-BAL has outperformed A2 over the last year.

[Beagle]

Wow, take at look at the BAL share price on the ASX, waiting patiently for the next A2 run.
If you want to have a bit of fun while you wait, bring up a chart for the last 12 months of ATM, click on super charts and compare how closely ATM's SP correlates to BAL's SP over the last 12 months.
How closely will really surprise you, its really really closely correlated.
The shorten the chart period up to 3 months and you'll see than notwithstanding the Fonterra about face on A2 and the wonderful implications that gives for long term supply and growth for ATM the BAL SP has materially outperformed in the last 3 months.
Expecting a market update sometime late April, (as they did last year), and the next leg up as a result of that.
May 14 should see index inclusion in the MSCI world index with the addition and rebalance effective on 1 June.
Later in June 2018 just like last year I expect another market update. Plenty to look forward too over the next few months :t_up:

[whome]

Been reading about platypus milk in the herald, as a possible source of new antibiotics..... and I was thinking about the A2 Platinum brand .... and nah, don’t think we should go there ...... nahhhh!!

[minimoke]

210,000 at $13.525 crossed after market closed.
Edit. But opened next day at $13.75. Now lets see what ripple SML announcement causes.

[Beagle]

Anyone else notice that nice little snippet in the SML half year results that said all consents for the Pokeno plant have been received....or words to that effect.
Underwrites their ability to supply A2 infant formula going forward into 2019 and beyond. Good for SML AND ATM shareholders, a classic win-win
Beagle have this funny thing about ducks. When they all start to line up beautifully its a sure sign that happy times will be continuing :t_up:

[sb9]

Anyone else notice that nice little snippet in the SML half year results that said all consents for the Pokeno plant have been received....or words to that effect.
Underwrites their ability to supply A2 infant formula going forward into 2019 and beyond. Good for SML AND ATM shareholders, a classic win-win
Beagle have this funny thing about ducks. When they all start to line up beautifully its a sure sign that happy times will be continuing :t_up:

Yes, gone thro' the $14 mark now :D

[Beagle]

Interesting article behind the paywall on NBR today wherein head of Equities at Nikko Fund managers Stuart Williams opines on FBU and ATM
Summary. FBU needs asset sales and / or equity raise to get through their mess.
Shares are seen as expensive at 16.5 times forward earnings because earnings are probably wrong.
At the other end of the attractiveness scale they reckon, (and they've been shareholders since 2012) that ATM is cheap on 38 times FY18 earnings given their proven growth rate and clear pathway to substantial further growth over the next 3-5 years.

Good to know what the institutions are thinking as there's serious money behind their opinions.

[sb9]

Latest from Prof Woodford...nice read, bit long though.

https://www.interest.co.nz/rural-news/92824/keith-woodford-explains-how-fonterra-embracing-a2-because-it-lacks-alternative

[bull....]

looks like a2 trade wars are in fashion

[couta1]

Great top up opportunity before the next run up. Let's do this.

[Dorkus]

Sharp drop before lunch triggered my sell and took a third of my holding off the table...

I guess seeing as there is no introduction thread I might as well introduce myself here. I am an at home investor with a modest portfolio that I have been growing for the last 10 years. I currently hold ATM (50%), SUM (23%), FPH (14%), THL (10%), BLT (2%), BSR.ASX (1%). I generally invest with a long-term view of 10+ years although I have had a shift in focus over the last 3 months and am about to take most, if not all, of it off the table in the next 12 months to build a house and keep my mortgage affordable.

Outside of investing I spend my spare time hunting, spearfishing and doing what my wife wants.

Cheers,
Adam

[BlackPeter]

Sharp drop before lunch triggered my sell and took a third of my holding off the table...

I guess seeing as there is no introduction thread I might as well introduce myself here. I am an at home investor with a modest portfolio that I have been growing for the last 10 years. I currently hold ATM (50%), SUM (23%), FPH (14%), THL (10%), BLT (2%), BSR.ASX (1%). I generally invest with a long-term view of 10+ years although I have had a shift in focus over the last 3 months and am about to take most, if not all, of it off the table in the next 12 months to build a house and keep my mortgage affordable.

Outside of investing I spend my spare time hunting, spearfishing and doing what my wife wants.

Cheers,
Adam

Welcome to the forum ... and hey - we have even our very own introduction forum, which is here: https://www.sharetrader.co.nz/forumdisplay.php?22-The-Newbies-Corner-The-place-for-the-Newbies-to-ShareTrader ;

Not sure though I understand the "stop loss" for ATM - I guess the SP is still well above the EMA 30 ... feels a bit tight for a long term investor and a stock which sometimes comes even close to the EMA 100. :); But hey - it is your money and if you need it for better things ...

Otherwise - ATM is notorious for rapid up and down swings ... I am sure the shorters have again a field day in the ASX. Setting too tight stops for ATM makes just the brokers and the shorters happy. Never mind about the brokers, but we don't want to see happy shorters - do we?

Discl: holding ATM (L), and this is one of the shares I didn't set stops on ...

[Dorkus]

Welcome to the forum ... and hey - we have even our very own introduction forum, which is here: https://www.sharetrader.co.nz/forumdisplay.php?22-The-Newbies-Corner-The-place-for-the-Newbies-to-ShareTrader ;

Not sure though I understand the "stop loss" for ATM - I guess the SP is still well above the EMA 30 ... feels a bit tight for a long term investor and a stock which sometimes comes even close to the EMA 100. :); But hey - it is your money and if you need it for better things ...

Otherwise - ATM is notorious for rapid up and down swings ... I am sure the shorters have again a field day in the ASX. Setting too tight stops for ATM makes just the brokers and the shorters happy. Never mind about the brokers, but we don't want to see happy shorters - do we?

Discl: holding ATM (L), and this is one of the shares I didn't set stops on ...

I guess the thought process on the stop for ATM was that I have been in since 53c and added another bundle at $1310 after the recent jump off the back of the announcements around Fonterra and Synlait. Once it had consolidated (in my head anyway) north of $1350, I set a stop at my buy price to give me some piece of mind on what felt more like a punt on collective enthusiasm rather than a well-considered technical analysis. Net result is I am down by the cost of brokerage on the trade and looking to put that money somewhere slightly less volatile.

[BlackPeter]

I guess the thought process on the stop for ATM was that I have been in since 53c and added another bundle at $1310 after the recent jump off the back of the announcements around Fonterra and Synlait. Once it had consolidated (in my head anyway) north of $1350, I set a stop at my buy price to give me some piece of mind on what felt more like a punt on collective enthusiasm rather than a well-considered technical analysis. Net result is I am down by the cost of brokerage on the trade and looking to put that money somewhere slightly less volatile.

No need to explain - we all make our own decisions :) and hey, if you started at 53 cents, than your overall return is truly colossal! As well - just noticed your overall holding in ATM (50%) - probably anyway a good idea to somewhat diversify and as well pretty sure couta is glad you sold some (to him) ;); All good - sounds like a win-win!

[causecelebre]

Any A2 among the infected?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12015937

[Beagle]

Great top up opportunity before the next run up. Let's do this.

LOL that's really worked its way into the vocab now hasn't it. I did a really good impersonation of a possum in the headlights with this one today, looked at it when it was down at $13.09, pontificated over it, mulled it over, paralysis by analysis. Unlike the Beagle to issue a meow instead of a woof one way or the other but this one is fairly volatile and I feel we need some more colour, (Winner says this is the hot new term to show you really know what you're talking about) on 2H sales before pushing above $14.

[couta1]

LOL that's really worked its way into the vocab now hasn't it. I did a really good impersonation of a possum in the headlights with this one today, looked at it when it was down at $13.09, pontificated over it, mulled it over, paralysis by analysis. Unlike the Beagle to issue a meow instead of a woof one way or the other but this one is fairly volatile and I feel we need some more colour, (Winner says this is the hot new term to show you really know what you're talking about) on 2H sales before pushing above $14. Well I must thank Jacinda for her motivating catch phrase, worked a treat yesterday for picking up some more of these beauties at the one day sale.PS-Get ready to pounce at the next sale Mr Beagle.

[RupertBear]

Well I must thank Jacinda for her motivating catch phrase, worked a treat yesterday for picking up some more of these beauties at the one day sale.PS-Get ready to pounce at the next sale Mr Beagle.

Followed your lead Couta and picked up a few on the one day sale yesterday :D not in your XOS league but have a nice wee stash to sit on :)

[minimoke]

Well I must thank Jacinda for her motivating catch phrase, worked a treat yesterday for picking up some more of these beauties at the one day sale.PS-Get ready to pounce at the next sale Mr Beagle.
This is ATM, not BGP. Dont go expecting a sale every week!

[couta1]

Followed your lead Couta and picked up a few on the one day sale yesterday :D not in your XOS league but have a nice wee stash to sit on :) It's all relative, and you can feel just as satisfied with your holding. PS-Nightmares still try and haunt me from last year when I sold my holding for a pittance, just before it doubled in value over the following 3 months.

[Sideshow Bob]

Any A2 among the infected?

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12015937

Understand it is an animal health issue, not a food safety issue.

[couta1]

Understand it is an animal health issue, not a food safety issue. That's correct, no affect on milk production.

[Pipi]

Understand it is an animal health issue, not a food safety issue.

Yes it is but you don't replace 22,000 cows over night, even though not all are dairy cows some are calves but still. This is going to leave a huge whole is the milk supply change, some could be A2 herds. And I'm not sure if this will be the last of it.

[causecelebre]

Yes it is but you don't replace 22,000 cows over night, even though not all are dairy cows some are calves but still. This is going to leave a huge whole is the milk supply change, some could be A2 herds. And I'm not sure if this will be the last of it.

My thinking as well

[Xerof]

as at 2015, 6.49m dairy cows in NZ, of which 1,253,993 were in Canterbury.

Less than .0035% of total, 1.8% localised in Canterbury.

Also, cull cow kill per annum is far more than 22k

I think we'll cope without them.

[Leftfield]

as at 2015, 6.49m dairy cows in NZ, of which 1,253,993 were in Canterbury.

Less than .0035% of total, 1.8% localised in Canterbury.

Also, cull cow kill per annum is far more than 22k

I think we'll cope without them.

Well said Xerof, in addition, ATM/SML are previously on record as saying none of its suppliers are are infected/effected.

[BlackPeter]

Yes it is but you don't replace 22,000 cows over night, even though not all are dairy cows some are calves but still. This is going to leave a huge whole is the milk supply change, some could be A2 herds. And I'm not sure if this will be the last of it.

As far as I know does Synlait get most (or all) of its A2 milk from mid and North Canterbury. The names of the A2 suppliers are not public knowledge, but we do know as well, that there is only one by the recent MPI proposals impacted herd in this area (van Leuwen Farm).So far I have found no information linking them to A2. So - before we all get too excited - I think it is fair to say that there is no known impact on the A2 supply.

Correct as well - this is (just) an animal health issue which effects basically all milk producers outside of NZ (and they can live with it), so, even if mycoplasma bovis decides to stay on our welcome shores, it would not be the end of the world.

RELAX!