ATM - A2 Milk Corporation Limited

[minimoke]

Yep, my profits have gone from an XXXOS size just over a week ago down to an OS size as of tonight, a good reminder to us all once again that the market can strip your panty bare as quick as it filled it up, worse than that, it can remove your shelving as well.You're not alone - taking a hammering at the moment. But still up 22% overall. Its quite the ticket to a circus

[Leftfield]

Those concerned about Mays ATM's price fluctuations should take heart with this article commenting the seasonality seen in 10yrs of ATM trading.
https://www.shortman.com.au/seasonality?q=A2M
Here's a pic that sums it up well.
9687

See you in June!!

[winner69]

So buy heaps now and cream it in June eh

But if you look at the chart that has the price by year (A2M: Historical Stock Prices) over the last 18 months it might actually be saying now is the time to say yes enough is enough and I should not be here

[Investor]

Yep, my profits have gone from an XXXOS size just over a week ago down to an OS size as of tonight, a good reminder to us all once again that the market can strip your panty bare as quick as it filled it up, worse than that, it can remove your shelving as well.

I hope you were referring to the pantry.

[Snoopy]

I hope you were referring to the pantry.

Nah, Couta is one of the straightest shooters on the forum. I reckon he really did have to sell the fancy underpants...

SNOOPY

[couta1]

I hope you were referring to the pantry. Wee typo, fixed now, however I must say back in 2013 I almost literally did lose my panty courtesy of the ComCom and CNU Lol.

[RupertBear]

I am trying really hard to get an image of couta in his panty out of my mind! :eek2::lol::lol:

[percy]

Nah, Couta is one of the straightest shooters on the forum. I reckon he really did have to sell the fancy underpants...

SNOOPY
At times like this our minds turn to Warren Buffett's words of wisdom.
"Only when the tide goes out do you discover Couta1 has been swimming naked."

[RupertBear]

At times like this our minds to Warren Buffett's words of wisdom.
"Only when the tide goes out do you discover Couta1 has been swimming naked."

Classic! :lol::lol::lol:

[couta1]

At times like this our minds to Warren Buffett's words of wisdom.
"Only when the tide goes out do you discover Couta1 has been swimming naked." Nice one Percy and yes if the tide keeps dropping at it's current rate, I will be swimming naked in a couple of days, fortunately I won't be alone.

[hardt]

FEB 2018 @$8.71 FY18E Revenues of 840M and EPS of 21cps
PRESENT @9.86 FY18E Revenues of 918M and EPS of 26-27cps?

Waiting patiently to buy some more as it gets closer to where it was prior to the massive upgrade and FCG/Korean partnership agreements.
What was that thing buffet said again.

[dreamcatcher]

Recently read Nestles failed to secure any a2 supply in Australia or NZ....... how sad

https://agrihq.co.nz/#

[Leftfield]

Nice one Percy and yes if the tide keeps dropping at it's current rate, I will be swimming naked in a couple of days, fortunately I won't be alone.

Not a pretty sight.....but it won't be for long! ;)

9688

[see weed]

Bit suck watching your paper profits disapearing :( going to be very hard for this bear to resist dumping a few if/when they go back up :mellow:
Don't worry, I thought the same at 50c to 70c and back to 50c which is about 40% drop so dumped about 300,000 shares for about about 70c and gained about 70k. Then soon after that they went to 1.20 to about $2. Had to buy back in at $7 to $13:confused:. Am down about 260k in last week, but still in the green about 190k, so am not to worried. This June theory sounds good. Most times I have sold, have regretted it later, so am going to sit tight until the dust settles. Could be a good time to buy bits and pieces as price drops then wait for the next rocket up:t_up:.

[bull....]

some heavy shorting happening 10m shares shorted over 4 days wow someone thinks something is very wrong?

[Ggcc]

some heavy shorting happening 10m shares shorted over 4 days wow someone thinks something is very wrong?
Could it be the MSCI index shorting it?

[t.rexjr]

Could it be the MSCI index shorting it?

They're making very effort to drive the price down I'd say.

[winner69]

There will be a huge bounce of this much vaunted 1050 ...won’t there?

[BlackPeter]

There will be a huge bounce of this much vaunted 1050 ...won’t there?

Might be a 950 instead ... this is the lower end of the lower gap ;); Might put in some order around this number, just to support my stock.

discl: happy holder, but quite content as well that my portfolio is somewhat more diversified than others ...

[BlackPeter]

Might be a 950 instead ... this is the lower end of the lower gap ;); Might put in some order around this number, just to support my stock.

discl: happy holder, but quite content as well that my portfolio is somewhat more diversified than others ...

Correction - lower gap boundary would be $9.30. EMA200 would be $9.43.

Now - this could turn into a spectacular bounce ... Hope the shorters cover their shorts in time for that :p - we don't want them to get hurt, do we?

[ratkin]

The hands are becoming weaker, hanging by fingertips from the top of the precipice.

[bull....]

havnt even had the capitulation fall yet

[couta1]

havnt even had the capitulation fall yet Bull you seem to love downramping and adding to holders pain,no one knows where the bottom is or exactly when it will bounce. Have you not got better things to do?

[misterx]

This is painful to watch.. my brain tells me this is to do with index but the 20% loss is making me quite emotional..

[couta1]

some heavy shorting happening 10m shares shorted over 4 days wow someone thinks something is very wrong? No quite the opposite, the big boys are accumulating.

[couta1]

This is painful to watch.. my brain tells me this is to do with index but the 20% loss is making me quite emotional.. Hold firm, the darkest hour comes before dawn, think where the SP will be a year from now,$20 IMO.

[gbogo]

Could it be the MSCI index shorting it?

No. The "index" doesn't buy, sell or hold any stock. Passive Fund Managers do have to buy or sell stock (rebalance) so that their portfolios match the index, and this can be particularly obvious when index components change eg each quarter.

[Beagle]

Its important to have a vision for where one sees a share going in the years ahead. I seriously doubt it will be $20 one year hence from now but even if it takes 4-5 years I'm quite relaxed about that. We have rumors of China completely relaxing its child policy which is great for overall market growth, Nestle trying to commence A2 sales which according to Harbour's analyst, (and I am inclined to agree), is great for the expansion of A2's share of the overall infant formula market and not to forget product development to look forward too, (A2 cheese, yogurt, e.t.c.) with supply expansion assisted by the Fonterra agreement as well as Synlait's expansion in Pokeno.

Sometimes I confess after several down days I get a bit down myself but I remind myself that with investment it is usually best to focus on the long game and think about where the stock is likely to be 4-5 years from now. If one holds a well diversified portfolio that includes some really good dividend payers as well as quite a number of stocks that could double in the next 4-5 years, chances are some of the growth stocks will triple or quadruple and overall ones portfolio will look extremely good five years down the track as well as paying a good average dividend yield along the way....(well that is what I tell myself and it helps me sleep at night).

Holding for a long period of time has always been the best strategy with ATM in the past and I for one will go with that for the future. I continue to believe a FY19 PE of around 28 is not expensive and the prospects for SP appreciation in the years ahead are very good.

[minimoke]

I have managed to convince myself that Fund managers are driving Index new entrant (eg ATM and SML) prices down to accumulate as many as possible pre 31 May. After this they will have to pay fair price and we will see the rockets back in orbit again.

[dobby41]

This share, or rather the reaction here to the price gyrations, is fascinating to watch.
Many here believe that the company only has good times ahead and will grow to something really big.
If you believe that then why the angst when the market price goes down when there is no real news?
Just buy more on sale and let the good times roll.
If you aren't in the market for more shares then stop looking!
Just listen to the news and if anything smells like a change in direction of the winds of fortune for the company then take note and act accordingly.
What the market does to the price doesn't really matter - unless, of course, you aren't really sure about the company ;)

[Beagle]

The above theory might be all very well if one assumes we all have stimulating day jobs that enthrall us every minute of the day. If that was the case we probably wouldn't have much of a forum lol

[couta1]

The above theory might be all very well if one assumes we all have stimulating day jobs that enthrall us every minute of the day. If that was the case we probably wouldn't have much of a forum lolExactly,if it wasn't for around a dozen or so posters on here, the place would be a graveyard.Would be great if others made the time to contribute and some of those many watching guests joined up and also contributed. PS-I'm in a similar situation to Beagle having been in the same work for 30 yrs now.

[whatsup]

Don't forget that this next years profit will be impacted in a positive manner by the falling N Z dollar.

[ratkin]

havnt even had the capitulation fall yet

Thats the one im hoping for, jumping in before then smacks of knife catching. On the other hand
it may just stabilise and start going back up

[t.rexjr]

Money flow indicater has been positive and increasing all day. Indicates buying pressure, yet price shows the opposite. The machines are winning! (Thats on the ASX, NZX is a mess of Lemmings)

[Snoopy]

Don't forget that this next years profit will be impacted in a positive manner by the falling N Z dollar.

And in a negative manner by the rising milk payout price.

SNOOPY

[mikeybycrikey]

I missed the initial rise due to lack of funds at the right time. Now with the latest dip I’m having a more thorough look. Seems like a pretty attractive business, with the incredible growth of 60%+ helping with that.

My initial thought is that ATM needs to grow significantly to justify the price. Obviously the growth is happening but growing sales into the multiple billions is going to involve a lot of work. I’m amazed that a company that sells physical products can grow so quickly.

How long can this growth rate really be sustained? How risky is doing business in China when much of their growth is coming from there? There are are so many questions about this company that are only going to be answered with time.

Status: currently DMOR (doing my own research)

[Ggcc]

Money flow indicater has been positive and increasing all day. Indicates buying pressure, yet price shows the opposite. The machines are winning! (Thats on the ASX, NZX is a mess of Lemmings)
This made me laugh. Thanks we all need these laughs

[dobby41]

PS-I'm in a similar situation to Beagle having been in the same work for 30 yrs now.

30 years? Is that all - coming up for 41 myself.
While the forum help to while away the hours watching the pot boil doesn't help.

[Ggcc]

No. The "index" doesn't buy, sell or hold any stock. Passive Fund Managers do have to buy or sell stock (rebalance) so that their portfolios match the index, and this can be particularly obvious when index components change eg each quarter.
Thanks for clarifying

[bull....]

ill have to start doing the gap fill chant soon

[ohpark0119]

Is 3500 trades a lot in nzx? Havent seen that many trades for a sibgle stock before.

[whatsup]

The way this outfit is heading its S P will be back to .50 shortly !!

[hardt]

Just waiting for that pay check from my garbage VIL profit to arrive tomorrow... going straight into A2.

Upside from here far outweighs the downside IMO.
Funny how much turmoil 70% growth instead of 73% growth has created! :t_up:

[Ggcc]

Just waiting for that pay check from my garbage VIL profit to arrive tomorrow... going straight into A2.

Upside from here far outweighs the downside IMO.
Funny how much turmoil 70% growth instead of 73% growth has created! :t_up:
Just keep waiting it might go down below $10 with these shorters. Geez I wonder when the bounce will come into gear

[couta1]

ill have to start doing the gap fill chant soon Posts like this are leaning toward some of the trash we read over on hot copper, what name do you use over there?

[bull....]

9.30 - 9.50 i think is the gap to fill

[RupertBear]

Looks like I may have to help fill that gap of it goes down below $10! :scared:

[allfromacell]

Wow, it looks like the market really wants to fill that gap. What’s also surprising off so much volume there have been no disclosure notices, really makes me wonder who’s doing all the buying and selling. Personally I’m very overweight in A2 right now but am going to purchase even more if the SP reaches $9.00AUD, I think there is outstanding value at that price trading at around a 2019 PE of 22.

[couta1]

Just waiting for that pay check from my garbage VIL profit to arrive tomorrow... going straight into A2.

Upside from here far outweighs the downside IMO.
Funny how much turmoil 70% growth instead of 73% growth has created! :t_up: Below $10 and I'm going to 80% of my portfolio in this stock.

[bull....]

Below $10 and I'm going to 80% of my portfolio in this stock.

if you had a margin loan you could go to 180%?

[gbogo]

and down we go... there were big bids (126 on ASX for >$1.5m in total last time I looked @ $9.50 AUD , (about $10.40 NZD) all day, and they've just been filled in and more.

i bottom-picked earlier in the day but just sold out.

(my Mum always told me that picking my bottom was not going to end well..)

[bull....]

Wow, it looks like the market really wants to fill that gap. What’s also surprising off so much volume there have been no disclosure notices, really makes me wonder who’s doing all the buying and selling. Personally I’m very overweight in A2 right now but am going to purchase even more if the SP reaches $9.00AUD, I think there is outstanding value at that price trading at around a 2019 PE of 22.

8.80 on the aud chart to fill the gap?

[couta1]

if you had a margin loan you could go to 180%? Using a margin loan on a highly volatile stock like this is foolishness IMO, on the other hand topping up the mortgage is a different story.

[Beagle]

So...8 days to go to MSCI index rebalancing. One might think that the vast majority of the shorts would want to cover their position before then.
One thing is for sure...never a dull moment. On the other hand...37 years counting beans...plenty of dull moments...

[allfromacell]

8.80 on the aud chart to fill the gap?

Yes that’s where the gap sits but at 9AUD the screaming value is too much, I also find the stock market often does the exact opposite of what everyone thinks it will so I wouldn’t be surprised if we see a big bounce close to the gap.

[minimoke]

Below $10 and I'm going to 80% of my portfolio in this stock.Jeez. Heres me thinking I might need to add more to get to 24% which is my SML holding. Might just have to put another sleepy order in.

[gbogo]

I found this on short-selling on the ASX. My read is, that there has been a slight increase recently. Interesting to see that there was definitely short-covering in the original break up through $10, as there are almost no shorts left after that.
9689

[mikeybycrikey]

I’ve read countless posts here on ST about how investors should never try to catch falling knives. Now that ATM is falling, the only posts I am seeing are from people describing the beautiful knives they have caught or will soon catch.

[freddagg]

Bull you seem to love downramping and adding to holders pain,no one knows where the bottom is or exactly when it will bounce. Have you not got better things to do?

I have ignored Bull before, at considerable expense.

[bull....]

I found this on short-selling on the ASX. My read is, that there has been a slight increase recently. Interesting to see that there was definitely short-covering in the original break up through $10, as there are almost no shorts left after that.
9689


the last 7 days has been 12m shares shorted roughly , someone taking a very big bearish view?

[minimoke]

I’ve read countless posts here on ST about how investors should never try to catch falling knives. Now that ATM is falling, the only posts I am seeing are from people describing the beautiful knives they have caught or will soon catch.Generally those falling knives have been triggered by really bad news - not so in this case.

[allfromacell]

I’ve read countless posts here on ST about how investors should never try to catch falling knives. Now that ATM is falling, the only posts I am seeing are from people describing the beautiful knives they have caught or will soon catch.

It's giving me Déjà of when AIR dropped under $2, lots of cut up hands that have now fully healed.

[couta1]

I have ignored Bull before, at considerable expense. He has also been wrong e.g. SPK going to $2.70 lol.

[bull....]

Bull you seem to love downramping and adding to holders pain,no one knows where the bottom is or exactly when it will bounce. Have you not got better things to do?

just reading whats happening really, thats all and trying to guess where it might go nothing more. if i could pinpoint exact prices lol i wouldnt be on this forum

[Beagle]

I have ignored Bull before, at considerable expense.

That might be your experience but I have often found myself on the other side of the ledger with bull to my considerable profit.
Objectively removing your or my own opinion the fact of the matter is bull is currently in 139th position out of 170 contestants in the 2018 sharemarket competition.

[bull....]

That might be your experience but I have often found myself on the other side of the ledger with bull to my considerable profit.
Objectively removing your or my own opinion the fact of the matter is bull is currently in 139th position out of 170 contestants in the 2018 sharemarket competition.

im a trader most of the time not an investor so i wouldnt follow my picks in any investing contest. by the way at the start of the contest after the first mth i think i was 3rd and then as usual my picks fall away

[Investor]

Bull you seem to love downramping and adding to holders pain,no one knows where the bottom is or exactly when it will bounce. Have you not got better things to do?

I thought it was quite a refreshing contrast to the recent posts which have come across as speculative and emotionally founded.

[gbogo]

That might be your experience but I have often found myself on the other side of the ledger with bull to my considerable profit.
Objectively removing your or my own opinion the fact of the matter is bull is currently in 139th position out of 170 contestants in the 2018 sharemarket competition.

come on, Beagle.. I might not have entered that competition if I knew it was going to be used to add / subtract credibility from every post! As it happens, I used a deliberate high-beta strategy in the comp, meaning that i picked high-risk stocks which could all fall to zero, but had some chance of a lottery payoff. I could do that in the comp, because there was no $$ at stake. I wouldn't do that in real life with my money or any money I was managing.

[minimoke]

That might be your experience but I have often found myself on the other side of the ledger with bull to my considerable profit.
Objectively removing your or my own opinion the fact of the matter is bull is currently in 139th position out of 170 contestants in the 2018 sharemarket competition.My real life portfolio is sitting on 23.1% which would put me in 7th place - and I wouldn't trust my word at all.

[bull....]

come on, Beagle.. I might not have entered that competition if I knew it was going to be used to add / subtract credibility from every post! As it happens, I used a deliberate high-beta strategy in the comp, meaning that i picked high-risk stocks which could all fall to zero, but had some chance of a lottery payoff. I could do that in the comp, because there was no $$ at stake. I wouldn't do that in real life with my money or any money I was managing.

here here i just enter for fun , doesnt reflect my actual investments at all. as you say competetions can make people go for dogs in the hope of the big payoff

[Beagle]

FWIW in regard to the competition I can't be bothered hounding out high beta or binary outcome stocks...I just follow my snout and put into the comp my five biggest market positions at the start of the year.

Regarding ATM most brokers are around 40 cps for FY19. Work the forward PE on the current SP, (its moving so fast I won't calculate it) other than to say at $10.00 its a forward PE of 25 which when one considers their track record of growth and outlook...

[JeremyALD]

This drop is really quite harsh. A 20% drop from here and we'll be looking at a forward PE of around 30!

[Joshuatree]

This from shortman au




Date
Gross shorts 1
Issued capital
% Capital shorted 2
Trade volume 3
Shorts as % of volume 4


Tue 22nd May, 2018
1,210,020
730,039,067
0.16%
6,733,713
17.97%


Mon 21st May, 2018
1,945,365
730,039,067
0.26%
6,220,078
31.28%


Fri 18th May, 2018
2,485,204
730,039,067
0.34%
8,685,867
28.61%


Thu 17th May, 2018
3,054,425
730,039,067
0.41%
10,261,306
29.77%


Wed 16th May, 2018
3,284,832
730,039,067
0.45%
22,163,857
14.82%

[ratkin]

SML back to parity, but not in a good way, it just falling slower

[Scrunch]

This from shortman au




Date
Gross shorts 1
Issued capital
% Capital shorted 2
Trade volume 3
Shorts as % of volume 4


Tue 22nd May, 2018
1,210,020
730,039,067
0.16%
6,733,713
17.97%


Mon 21st May, 2018
1,945,365
730,039,067
0.26%
6,220,078
31.28%


Fri 18th May, 2018
2,485,204
730,039,067
0.34%
8,685,867
28.61%


Thu 17th May, 2018
3,054,425
730,039,067
0.41%
10,261,306
29.77%


Wed 16th May, 2018
3,284,832
730,039,067
0.45%
22,163,857
14.82%



If I have understood this table correctly the total shorts represent a small fraction of daily turnover. If so they are noise as they could be cleared very quickly. On Wed. Shorts increased by about 230k or 1% of the volume traded that day. The other 99% is not shorts related.

[ratkin]

I get you guys are all optimistic due to MSCI etc but the chart is absolutely shocking.
People wondering who the sellers are might be better asking themselves who is buying.
At least wait for the indicators to poke back up over the 20 sell line at the very least, because they
all under it and still heading south

[BlackPeter]

If I have understood this table correctly the total shorts represent a small fraction of daily turnover. If so they are noise as they could be cleared very quickly. On Wed. Shorts increased by about 230k or 1% of the volume traded that day. The other 99% is not shorts related.

I think you need to look into the last column (shorts as percentage of volume), and this number is higher. Shorts as percentage of capital (the small numbers) is quite irrelevant for short covering later on - unless the shorters have access to the total market cap (which they obviously haven't).

If volume goes down over the next couple of days many of these shorter's will be in the proverbial ...

[BlackPeter]

I get you guys are all optimistic due to MSCI etc but the chart is absolutely shocking.

Well, it depends on which time window you look at. However - stock is still well above EMA200, the uptrend is not broken ...

[bull....]

balamys - bal getting hammered too so not just a a2 thing

[Beagle]

FEAR and Greed the two greatest motivators. Stock was $13.38 when I made (thankfully just a small) a top up last Thursday, (not even one week ago).
We are down $3 in less than a week and the decline has been very steep and swift. I think there's a LOT of fear out there and a lot of holders have moved to lock in profits or stem losses. Could just as easily turn on a dime tomorrow. Fundamental's at this level look very attractive but I agree the chart looks pretty bad.
Disc: Holding for long term growth.

[winner69]

Say a guru fundie like Harbour Asset lent heaps of their A2 to shorters at say $13

They’ve collected a few % by way if a fee

But their fund is down heaps at the moment ...heaps more than the fees they have collected

So by aiding and abetting these horrible shorters they’ve damaged their own returns eh

Probably justify their decision to do this by saying it’s improved liquidity

[ratkin]

Well, it depends on which time window you look at. However - stock is still well above EMA200, the uptrend is not broken ...

True enough, the 2 year chart does not look quite so bad, for long term investors at least. They may as well hang in there and hope that average is not broken.

[JeremyALD]

Feb 20 the SP was $9.20 so it wasn't that long ago it was around thsi level.

[hardt]

If I have understood this table correctly the total shorts represent a small fraction of daily turnover. If so they are noise as they could be cleared very quickly. On Wed. Shorts increased by about 230k or 1% of the volume traded that day. The other 99% is not shorts related.

Having a 1/4 of the trades be shorts is a large number... on par with some of the most heavily shorted stocks on the ASX
2.5-3% of A2 is short currently and the more that number grows the more damaging the squeeze will be... like what we saw in Feb.

Just about every sizeable movement down has been accompanied by a smaller increase in total shorts than what we have seen this past week.
9690

[Scrunch]

I think you need to look into the last column (shorts as percentage of volume), and this number is higher. Shorts as percentage of capital (the small numbers) is quite irrelevant for short covering later on - unless the shorters have access to the total market cap (which they obviously haven't).

If volume goes down over the next couple of days many of these shorter's will be in the proverbial ...

But doesn't the last column simply say that on the daily volumes traded, 100% of the shorted volume could be cleared and still only represent 20-30% of daily turnover. If say a third of the shorted volume was to clear tomorrow, this would create buying demand of 1m shares. Thats nothing for A2M given the size of the market.

[Scrunch]

Having a 1/4 of the trades be shorts is a large number... on par with some of the most heavily shorted stocks on the ASX
2.5-3% of A2 is short currently and the more that number grows the more damaging the squeeze will be... like what we saw in Feb.

Just about every sizeable movement down has been accompanied by a smaller increase in total shorts than what we have seen this past week.
9690

Oh,

I had been mislreading the chart as total shorts not new shorts established. Yes that's quite a bit of new shorting, but the graph shows that participants had previously established shorts equivalent to 4-8% of capital and have only re-established shorts equivalent to just over 2%. This may make it heavily shorted relative to other stocks, but lightly shorted relative to past experience.

[waterboy]

Here is what i think will happen in the next week.
Price will drop to somewhere in the 9.50 to $10 region because:
a) that is the point where the trend line prior to the feb jump would intersect
b) the gap in feb will be filled
c) it roughly coincides with the end of may when msci kicks in (4 trading days left)
d) the pe is not too high
e) the machines/shorters run out of borrowed shares (maybe). They have done their job for the big boys to get in cheaper.

Would be interesting if anyone has looked at what happening with other stocks perhaps on asx that are being included in index to see if they have had the same treatment.



should have sold and bought back in at much lower price but would not have believed this would happen from a slightly lower forecast

[winner69]

I don't think the shorters will ever go away from ATM ....or at least while its trading at outrageous PE multiples.

Shorters love stocks that are priced to more than perfection where there are significant known risks that could cause a dramatic slow down in growth

We have to get used to their presence ...why worry about them on a day to day business

One thing about shorters though (more so the big ones shorting with conviction rather than traders) is that they are often right in their judgment of the company and hang in there until they think the price has fallen to a more realistic level.

[hardt]

I don't think the shorters will ever go away from ATM ....or at least while its trading at outrageous PE multiples.

Shorters love stocks that are priced to more than perfection where there are significant known risks that could cause a dramatic slow down in growth

We have to get used to their presence ...why worry about them on a day to day business

One thing about shorters though (more so the big ones shorting with conviction rather than traders) is that they are often right in their judgment of the company and hang in there until they think the price has fallen to a more realistic level.

Shorters have had some terrible times with A2... 8% was the baseline for most of 2016-2017, then settled around 3-4% for the last 6 months and hit essentially 0.05% in march after the latest squeeze... this quiet period after the update is the perfect opportunity to short without risk of a repeat burn.

[winner69]

Shorters have had some terrible times with A2... 8% was the baseline for most of 2016-2017, then settled around 3-4% for the last 6 months and hit essentially 0.05% in march after the latest squeeze... this quiet period after the update is the perfect opportunity to short without risk of a repeat burn.

Does this mean the shorters have lost zillions then .....if so why do they continue to play the game

I don't always understand how these games are played

[minimoke]

As an aside doesn't look like mercury is suffering any with coming off msci

[couta1]

Does this mean the shorters have lost zillions then .....if so why do they continue to play the game

I don't always understand how these games are played Shorters have lost heaps in this stock and they will soon lose heaps more, they continue to play the game because it's an addiction/adrenalin rush. However shorters are not the main driver of this massive drop, it's the big boys and it's orchestrated, when they have what they want, watch the turn around. It's a classic Game of Thrones in real life happening at the moment, holders can be sucked into the game or watch the action from the sidelines, your choice. PS-If it drops much further, I'll be joining the game as a buyer not a seller.

[Snoopy]

Generally those falling knives have been triggered by really bad news - not so in this case.


Perhaps you guys need to listen to the news a bit more?

1/ Mycoplasma Bovis now it appears has been spread by feeding surplus milk on one farm to calves on another. No tracking records have been entered on the NAIT system for these milk movements. This could be extremely serious in disrupting milk supplies.

2/ Fonterra gives first forecast 2019 year of $7/kgMS, That is about 10% higher than some analysts expected, and will flow directly into higher value processed product input costs, like A2's baby formula,

3/ China President Xi Jinping reminding the world stage that he can influence any prospective meeting between Kim Jon Ung and Donald Trump. Kim Jon Ung has gone cool on the proposed Trump meeting since his second meeting with President Xi, who doesn't want a united Western style Korean Democracy on his doorstep This is a reminder to the world that China is a command economy that will always ensure local interests ('Mengniu A1 free childrens milk') are not put out by foreign interlopers (like A2).

These are three things that could significantly affect ATM going forwards that have come to light over the last three or four days. Yet all the ATM believers seem completely blind to it all! I find that amazing.

SNOOPY

[hardt]

Perhaps you guys need to listen to the news a bit more?

1/ Mycoplasma Bovis now it appears has been spread by feeding surplus milk on one farm to calves on another. No tracking records have been entered on the NAIT system for these movements. This could be extremely serious in disrupting milk supplies.

2/ Fonterra gives first forecast 2019 year of $7/kgMS, That is about 10% higher than some analysts expected, and will flow directly into higher value processed product input costs, like A2's baby formula,

3/ China President Xi Jinping reminding the world stage that he can influence any prospective meeting between Kim Jon Ung and Donald Trump. Kim Jon Ung has gone cool on the proposed Trump meeting since his second meeting with President Xi. This is a reminder to the world that China is a command economy that will always ensure local interests ( 'Mengniu A1 free childs milk' are not put out by foreign interlopers (like A2).

These are three things that could significantly affect ATM going forwards that have come to light over the last three or four days. Yet all the ATM believers seem completely blind to it all! I find that amazing.

SNOOPY

Sounds an awful lot like that time no one would listen to your talk about raw milk supply not meeting markets expectations of $700m in sales... fast forward to $900+ and that faded pretty quickly.
$3 valuation *amazing*

There has never been any shortage of local products in China, mid-higher end consumers choose to buy premium ANZ brands while the low-middle class buy domestic producers... there is room for everyone in that massive and expanding market, likely to increase with the easing of the two child policy.

There have always been things that could significantly affect A2, there always will be... your list is not convincing.

[moka]

I missed the initial rise due to lack of funds at the right time. Now with the latest dip I’m having a more thorough look. Seems like a pretty attractive business, with the incredible growth of 60%+ helping with that.

My initial thought is that ATM needs to grow significantly to justify the price. Obviously the growth is happening but growing sales into the multiple billions is going to involve a lot of work. I’m amazed that a company that sells physical products can grow so quickly.

How long can this growth rate really be sustained? How risky is doing business in China when much of their growth is coming from there? There are are so many questions about this company that are only going to be answered with time.

Status: currently DMOR (doing my own research)

Investment in intangibles is a reason it has grown so quickly.


https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12040941
Brian Gaynor: Intangibles taking over the markets

“One of the major challenges facing investors is that fast-growing US companies have a strong focus on intangible assets, instead of the more traditional physical assets. Intangible assets include software, brands, human networks, intellectual property, patents, market research and employee training, while physical or tangible assets include bricks and mortar, as well as equipment. This raises the question of how to value intangible-intensive companies as most of their investment is expensed, and has a negative impact on earnings, while physical investment is capitalised.

Uber is a massive taxi company that doesn't own taxis and Airbnb is a major accommodation group that has minimal property assets.

The delisting of Xero was a blow to the NZX because it was our largest intangible-intensive company although a2 Milk has some of these characteristics. The milk company has total assets of $548 million, with the main components being $240m of cash, a $105m investment in Synlait Milk and only $10m worth of property, plant and equipment. Intangible assets can be scaled more quickly than physical assets. Auckland Airport has $2.2b of debt, minimal cash and massive capital expenditures ahead. New Zealand's main airport can't cope with existing passenger numbers, never mind further growth.

The expensing of intangible investment has reduced the earnings of these companies even though this investment may create huge shareholder value in the long term. Thus, companies that invest heavily in intangibles are being penalised by earnings-focused investors while companies that don't invest in this area are treated more favourably.”

[couta1]

Snoopy's list could have been more convincing if he had added 1. A major Middle Eastern war. 2.Trump or Kim Jon push a nuke button. 3. A large meteorite striking earth. 4.The current Govt get a second term.

[Scrunch]

I had no idea about the level of shorting that existed on the ASX, but it does help explain the trading volumes that are much higher than in NZ.

shortman.com.au is a great resource - Thanks Hardt.

So A2M's at 2.56% shorted, what does this mean. Well there's 100 ASX stocks with a short ratio of 2.91% or higher. While ATM may be high, there's nothing unusual if you are not even in the top 100. A2M's a comparatively small company, and companies like BHP's are as big as they get in Australia. Well its got shorting of 2.23% so being around 2% could be defined as normal.

Looking at a bunch of bigger Australian stocks, there's basically a structural level of shorting in the Australian market. I'm not sure what causes this but it may be taxation driven with bigger entities using shorts to neutralise their holding without actually selling it and realising taxable gains.

[Snoopy]

There have always been things that could significantly affect A2, there always will be... your list is not convincing.

I am not calling time on the growth of ATM and A2 baby Formula in China. I am just saying that not all news in the market is relentlessly positive. There are real reasons why ATM should pull back at times, that cannot be shrugged off as 'market manipulation'.

Today's $10.24 closing price on last years 12.9c of earnings represent an historic PE of 79. There are huge expectations still built into that share price that only a forward earnings guidance of perfection can justify. Even 'wobble the cart' news could see that share price plunge. This doesn't mean I don't have huge respect for ATM and the A2 product. I'm readying myself to get on board the bus with you guys when it pulls up at the $6 stop.

SNOOPY

[Scrunch]

Snoopy's list could have been more convincing if he had added 1. A major Middle Eastern war. 2.Trump or Kim Jon push a nuke button. 3. A large meteorite striking earth. 4.The current Govt get a second term.

Or Synthetic milk. ATM's point of difference is that it doesn't have the A1 protein. Am I missing something or would this point of difference would mean little if synthetic milks become mainstream. The article below suggests that the availability of synthetic milks could be as few as two years away.
https://agrihq.co.nz/#

[t.rexjr]

Snoopy's list could have been more convincing if he had added 1. A major Middle Eastern war. 2.Trump or Kim Jon push a nuke button. 3. A large meteorite striking earth. 4.The current Govt get a second term.

The thing is, that list of Snoop Doggs is exactly what the big boys want in the news when driving a price down.

[ratkin]

Or Synthetic milk. ATM's point of difference is that it doesn't have the A1 protein. Am I missing something or would this point of difference would mean little if synthetic milks become mainstream. The article below suggests that the availability of synthetic milks could be as few as two years away.
https://agrihq.co.nz/#

Wouldnt that be something, Milk with no need for any cows. NZ would be in a bad way, farmers would all have to grow Maorijuana

[Raz]

still dropping... now $2 dollars lower than when I sold...PE still inflated and this may well be the trading share of the year.

[minimoke]

Perhaps you guys need to listen to the news a bit more?

1/ Mycoplasma Bovis now it appears has been spread by feeding surplus milk on one farm to calves on another. No tracking records have been entered on the NAIT system for these milk movements. This could be extremely serious in disrupting milk supplies.

2/ Fonterra gives first forecast 2019 year of $7/kgMS, That is about 10% higher than some analysts expected, and will flow directly into higher value processed product input costs, like A2's baby formula,

3/ China President Xi Jinping reminding the world stage that he can influence any prospective meeting between Kim Jon Ung and Donald Trump. Kim Jon Ung has gone cool on the proposed Trump meeting since his second meeting with President Xi, who doesn't want a united Western style Korean Democracy on his doorstep This is a reminder to the world that China is a command economy that will always ensure local interests ('Mengniu A1 free childrens milk') are not put out by foreign interlopers (like A2).

These are three things that could significantly affect ATM going forwards that have come to light over the last three or four days. Yet all the ATM believers seem completely blind to it all! I find that amazing.

SNOOPY
It is some news sure, but not the news that would cause such a fall.
1) m Bovis. Very small number of herds affected and does not affect milk. Now it is A1 and M Bovis Free milk,
2) Increased product demand and margin improvement sees greater farm gate payout.
3) A command economy with citizens who will go to any lengths (emptying foreign land supermarket shelves) to get a premium product

That said I accept the news is a useful way of stimulating worry in the short term

[minimoke]

ASX closed A2M at $9.30 or $10.16 so we can expect more action today. I've got my hand out for more at $10.00

[iceman]

Westland Milk considering producing A2 products https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12056492

[ratkin]

Assumption here is that big boys are driving down the price with a view to driving it back up.
What if it is just normal sell off due to underwhelming result, general news, technical selling charts,
overinflated P/E, increasing headwinds in the future, etc etc

[Snow Leopard]

Oh the joys of owning shares in a 'high growth' company!

[minimoke]

Assumption here is that big boys are driving down the price with a view to driving it back up.
What if it is just normal sell off due to underwhelming result, general news, technical selling charts,
overinflated P/E, increasing headwinds in the future, etc etc
All reasons quite possible. But its not all about today. Its about the end of the year and where it will be in 5 years. I'm happy with my money going into the long term view. (but also expecting a lift at the end of the month!)

[winner69]

Assumption here is that big boys are driving down the price with a view to driving it back up.
What if it is just normal sell off due to underwhelming result, general news, technical selling charts,
overinflated P/E, increasing headwinds in the future, etc etc

That’s how I see it as well

PE contraction hurts ....and it’s stsrting to happen across the market just as some predicted in January

[Sideshow Bob]

Or Synthetic milk. ATM's point of difference is that it doesn't have the A1 protein. Am I missing something or would this point of difference would mean little if synthetic milks become mainstream. The article below suggests that the availability of synthetic milks could be as few as two years away.
https://agrihq.co.nz/#

Non-cow milk has been around for years - soya milk, almond milk, rice milk, coconut milk - and then from farming enterprises in NZ with animal alternatives - ie goats milk and sheep milk on a small/growing scale, priced well ahead of cows milk. There has probably been some traction of non-cow and plant dairy in recent times but would suggest that has still been relatively small.

(Sorry couldn't find the article with the link)

[Sideshow Bob]

Westland Milk considering producing A2 products https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12056492

Think they have a few jerseys in their herd (???) and ideal as a relatively small producer.

[Beagle]

That’s how I see it as well

PE contraction hurts ....and it’s stsrting to happen across the market just as some predicted in January

But I also predicted that super high growth companies will grow their way through some moderate PE contraction that I expect over the next ~ 18 months, (was 24 months but we are part way through this now). Now on a forward PE of just 25 and looking at their prospects and the way they're growing its starting to look like this correction is overdone but that said these things can often over correct so in the short term the roller-coaster ride continues. Shouldn't worry long term investors, just strap yourself in tightly and take some anti nausea tablets and continue riding the tiger.

[bull....]

gap chant time again

[couta1]

gap chant time again Is it time for the running of the bulls, I have my sharp Spears ready to go.

[minimoke]

And there we have it. I ve made a parity buy of ATM at 10.00 and SML at 10.00. Lets see how many more fingers I loose with these knives.

[bull....]

Is it time for the running of the bulls, I have my sharp Spears ready to go.

your seen what happens to people standing in front of a rampaging bull

[BlackPeter]

gap chant time again

Yep, looks like we will have today some serious gap filling. The Moose predicted it (in some different place) when everybody else was still euphoric.

Interesting question is - will we reach the bottom or will we drop below the MA200 (which sort of coincides with the bottom of the respective gap (around 930 - 950)?

[couta1]

your seen what happens to people standing in front of a rampaging bull But people are standing in front of a raging bear, I reckon you need to get to know your animals.

[minimoke]

But people are standing in front of a raging bear, I reckon you need to get to know your animals.
And at some point the ring masters will get back in with whips to quieten the beast down

[waterboy]

Assumption here is that big boys are driving down the price with a view to driving it back up.
What if it is just normal sell off due to underwhelming result, general news, technical selling charts,
overinflated P/E, increasing headwinds in the future, etc etc

I think there are to many small trades going through for it not to be shorters or big funds, yesterday when I looked at the depth it was nearly all trades of 100 shares each.

[bull....]

I think there are to many small trades going through for it not to be shorters or big funds, yesterday when I looked at the depth it was nearly all trades of 100 shares each.

machines do the small orders too

[couta1]

I think there are to many small trades going through for it not to be shorters or big funds, yesterday when I looked at the depth it was nearly all trades of 100 shares each. Yep, anyone who can't see what games are being played here need to spent a LOT more time studying the market.

[winner69]

That GS report which seems to have become the A2 bible has sales growth slowing quite considerably in the future ...

F18 at 70% odd and then F19 at 33% and then F20 at 20%

As BP says ...spot the trend

[winner69]

machines do the small orders too

Machines have no emotion eh bull

Big or small doesn’t matter to them .....they only do what they are told to

[bull....]

Machines have no emotion eh bull

Big or small doesn’t matter to them .....they only do what they are told to

fund managers just tell the machine what to do

[ohpark0119]

Shoulda dumped at 13.40 last week

[Sideshow Bob]

Shoulda dumped at 13.40 last week

Nothing fundamentally changed in the last week that has changed the company's value by $2.5 billion.

[bull....]

if you look at the whole infant formula space they are all getting hammered a2. bal , jat etc all down double digits last 10 days ... something up ? or just a rotation out of the sector

[minimoke]

Shoulda dumped at 13.40 last weekDont sweat the daily moves. Remind yourself what you are in this for. What was your goal. What has happened to stop you reaching your goal.

( With ATM i figure the world is broadly getting richer. As we get richer we become more worried. As we become more worried we look for alternatives to the traditional nutrition which are now the perceived causes of our worry. And we now have the money to put those worries to bed. I see this worry increasing over the years and I see consumers having more money to spend on supplements. Of course I could also be barking mad )

[Beagle]

Dont sweat the daily moves. Remind yourself what you are in this for. What was your goal. What has happened to stop you reaching your goal.

( With ATM i figure the world is broadly getting richer. As we get richer we become more worried. As we become more worried we look for alternatives to the traditional nutrition which are now the perceived causes of our worry. And we now have the money to put those worries to bed. I see this worry increasing over the years and I see consumers having more money to spend on supplements. Of course I could also be barking mad )

Well I for one think you're barking up the right tree.

[winner69]

Nothing fundamentally changed in the last week that has changed the company's value by $2.5 billion.

..........just what punters are prepared to pay for that growth .....that’s what changed

[winner69]

Looks like 10 bucks held

[Sideshow Bob]

Looks like 10 bucks held

For the moment. Australia opens in less than an hour.

[carrom74]

Yep, looks like we will have today some serious gap filling. The Moose predicted it (in some different place) when everybody else was still euphoric.

Interesting question is - will we reach the bottom or will we drop below the MA200 (which sort of coincides with the bottom of the respective gap (around 930 - 950)?

Got in at 999 today and read your post just now BP...eeekkk... should have waited...

[minimoke]

Got in at 999 today and read your post just now BP...eeekkk... should have waited...Its done now. Sit back and relax until your stop loss gets triggered. I haven't met a person yet who can accurately pick the lows and highs of anything

[steveb]

Got in at 999 today and read your post just now BP...eeekkk... should have waited...
Yes I decided to wait,but was very tempted at the $10 mark,you could sell them at the mo for a modest profit.

[Investor]

It's clear that selling at $13 was a very very compelling option; given that at the time the share was overpriced. If you sold at $13 and found an actual bargain in the market to replace ATM with, you would be on the path to doing very well. ATM has experienced extreme growth and there are certainly lower risk shares that could produce similar or greater returns from here.

[BlackPeter]

Got in at 999 today and read your post just now BP...eeekkk... should have waited...

You may well have picked the bottom, though I could imagine that the Ossie shorters are still good for some drop (just to fill the gap, of course).

We'll see. Mid and long term I think that you got the shares at a good price ...

[minimoke]

and there are certainly lower risk shares that could produce similar or greater returns from here.It would be helpful if you listed some.

[t.rexjr]

Looks like some short covering on the Aussie early.

[minimoke]

You may well have picked the bottom, though I could imagine that the Ossie shorters are still good for some drop (just to fill the gap, of course).

We'll see. Mid and long term I think that you got the shares at a good price ...Ozzie has opened around 3% up. Maybe we are at the bottom

[sb9]

Just as a side note, the whole thread on A2M on Hotcopper has become bit toxic with few posters getting way too personal.

In the meantime, business as usual for the company and I think the stock bit oversold now. As some members here said the long term story is still in tact and going as per plan. The recent EU free trade deal that is currently underway for NZ and AU should bode well.

Happy days :)

[carrom74]

You may well have picked the bottom, though I could imagine that the Ossie shorters are still good for some drop (just to fill the gap, of course).

We'll see. Mid and long term I think that you got the shares at a good price ...
May be I have BP...But still i am surprised most of the traders both here and HC(except couta lol) were picking a fall today...and it does look oversold now.Today is crucial and if it holds the gains then upswing towards the opening of MSCI is near-certain.

[waterboy]

May be I have BP...But still i am surprised most of the traders both here and HC(except couta lol) were picking a fall today...and it does look oversold now.Today is crucial and if it holds the gains then upswing towards the opening of MSCI is near-certain.

I was one picking a fall as per my earlier post. Am looking to buy more but have lost a bit of confidence in understanding mr market at moment. I think I will wait until rebound looks more certain and we are closer to the end of the month. Hopefully it will settle down by then. Down 5% Up 5% the next day :mellow:

[hardt]

That morning buy order is paying off

[winner69]

Mate been busy today and rang to see how ATM was going ....I said it’s about 11 dollars and been a good day

He’s happy ...no stress for him today

[winner69]

So have the shorters made a killing/zillions today ....buying and locking in their gains ....or is it I just don’t get it

[couta1]

So have the shorters made a killing/zillions today ....buying and locking in their gains ....or is it I just don’t get it The smart ones who sold at $13ish and bought back today would be doing just dandy.

[minimoke]

And there we have it. I ve made a parity buy of ATM at 10.00 and SML at 10.00. Lets see how many more fingers I loose with these knives.
Any day dodging falling knives and coming away unscathed is a good day in my books. ATM closed at $10.71 and SML at $10.16. Off to find me some Canterbury Crème to calm the nerves.

[Beagle]

Any day dodging falling knives and coming away unscathed is a good day in my books. ATM closed at $10.71 and SML at $10.16. Off to find me some Canterbury Crème to calm the nerves.

Been trying to give the stuff up, it is a bit addictive eh !...no good for the fat hounds weight...but nerves have definitely been sorely tested in the last week...probably relent and pick some up tonight. King Solomon with all his wisdom says in the book of Ecclesiastes in the Bible many times that a man should eat and drink and enjoy the fruits of his hard work...so must be a good thing to do (in moderation of course !)

[peat]

moderation of course !)
moderation in all things , including moderation

[44wishlists]

Reading an article about most A2 products are shipped from Lyttelton Port. In that article, it mentioned the port's shipment data can be subscribed to. Does anyone here know how can I subscribe to the data please?

[Valuegrowth]

It is one of the mostly overcrowded stocks in the market and also a hot stock.

[sonny n share]

Australia Post opens new 'concept store' that will only ship to China

Nice photo of A2 milk

https://www.smh.com.au/business/companies/australia-post-opens-new-concept-store-that-will-only-ship-to-china-20180524-p4zh8j.html

[Sideshow Bob]

Reading an article about most A2 products are shipped from Lyttelton Port. In that article, it mentioned the port's shipment data can be subscribed to. Does anyone here know how can I subscribe to the data please?

I doubt if data would be available to such a level that can identify individual companies, products, brands, destinations etc? Would dare say exporters wouldn't be happy about that info being made available by the port. Although can 'purchase' quite a lot of data via US Customs for any shipments going via a US port.

Otherwise exports can be searched via stats.govt.nz especially if know the HS codes, albeit all anonymous.

[winner69]

I reckon the week will end very well for the ATM share price ...well over 11 bucks I reckon

[Investor]

I reckon the week will end very well for the ATM share price ...well over 11 bucks I reckon

good luck.

[couta1]

I reckon the week will end very well for the ATM share price ...well over 11 bucks I reckon You'd better hope the machines are down for servicing.

[winner69]

You'd better hope the machines are down for servicing.

They did well for us yesterday

[minimoke]

I reckon the week will end very well for the ATM share price ...well over 11 bucks I reckonI'm hoping the cat is alive and well and chasing the cream. Not dead and about to bounce.

[RupertBear]

You'd better hope the machines are down for servicing.

I would quite like one of those machines Couta! :eek2:

[Beagle]

We need to see a confirmed break back about the 100 day MA on decent volume, (currently about $11.20) before anyone can relax a little.
Meantime its quaff some more happy pills and dream of $20 in a few years time.

[Leftfield]

I reckon the week will end very well for the ATM share price ...well over 11 bucks I reckon


Yay - you are the dude Winner :t_up: Well anticipated....like really close.

Great to see ATM back on course after a scary week.

[Baa_Baa]

We need to see a confirmed break back about the 100 day MA on decent volume, (currently about $11.20) before anyone can relax a little.

Agree, try the 100 EMA, it's a pivot since the 16/5 drop, offering resistance today. Volume has been consistently higher since then as well, notably with increasing volume into the bounce yesterday and follow through today.

Dead cat or turnaround? Be nimble, be quick. A plan either way could be useful.

[Raz]

Agree, try the 100 EMA, it's a pivot since the 16/5 drop, offering resistance today. Volume has been consistently higher since then as well, notably with increasing volume into the bounce yesterday and follow through today.

Dead cat or turnaround? Be nimble, be quick. A plan either way could be useful.

Yes..we wait..to be continued... :-)

[Beagle]

Agree, try the 100 EMA, it's a pivot since the 16/5 drop, offering resistance today. Volume has been consistently higher since then as well, notably with increasing volume into the bounce yesterday and follow through today.

Dead cat or turnaround? Be nimble, be quick. A plan either way could be useful.

MSCI will dominate the end of month trading. The only question is what will sellers be happy to accept in the face of truly MASSIVE end of month MSCI index rebalancing demand ? That's the $64,000 question.

[Ggcc]

MSCI will dominate the coming week in my opinion.
I think so as well as A2 will be have to be heavily invested in by the MSCI funds managers. Any idea of the numbers that will be involved?

[dreamcatcher]

Was told MSCI for ATM around 40M

[winner69]

Was told MSCI for ATM around 40M

Jeez ...we could see 15 bucks?

Maybe not but at least 13 bucks

[minimoke]

Was told MSCI for ATM around 40MSome context. Last trade of day in nz was 200,000 shares at 10.99. Above teh end of day catch up.

But Australia, in a day (Friday) traded 8m shares - a long way shy of 40m

[minimoke]

Jeez ...we could see 15 bucks?

Maybe not but at least 13 bucksTime for a wager - I'll go $13.50 by close on 31 May

[thestg]

Time for a wager - I'll go $13.50 by close on 31 May

I say $14:50 Opening Friday may also be interesting.

[minimoke]

I say $14:50 Opening Friday may also be interesting.If its $14.50 it will be more than Canterbury Crème being consumed at my place - may splash out on a Lindaur!

[thestg]

Well it did hit $14.62 about 3 months ago. :t_up:

[Beagle]

Jeez ...we could see 15 bucks?

Maybe not but at least 13 bucks


Should be a better week coming up than the last two that's one thing for sure :t_up:

[dreamcatcher]

REMINDER MSCI RE-BALANCE 30/11/2017 ...........54M FPH ADDED & 79M CEN SHARES REMOVED 1.4Billion DAY TURNOVER .........:t_up:

The S&P/NZX50 Index gained 0.6% on Thursday to close at a new record high of 8,187. The month ended with an MSCI index rebalance which saw very large volumes traded on the close. The largest volume was seen in Fisher & Paykel Healthcare which was an addition, gaining 0.4% to $13.10 on $702 million of shares traded. Another was Contact Energy which was a removal and declined 2.2% to $5.40 on $410 million of shares traded.

[Sideshow Bob]

79m Contact = 11% of shares on issue
54m FPH = 9.4% shares on issue

40m ATM only 5.5%.

[couta1]

79m Contact = 11% of shares on issue
54m FPH = 9.4% shares on issue

40m ATM only 5.5%. As mentioned by a couple of us previously, 80-100m a more realistic number.

[BlackPeter]

Nice deflection on Friday at the MA100 - and down we go again. Who knows, maybe it is still trying to fill this gap 930 to 950?

Fascinating games ..

[minimoke]

Nice deflection on Friday at the MA100 - and down we go again. Who knows, maybe it is still trying to fill this gap 930 to 950?

Fascinating games ..Maybe a last chance to shake the tree for low hanging fruit before the Index inclusion when getting shares may be a bit harder.

[Beagle]

Need you head looked at if you sell right now in my opinion.

[minimoke]

Need you head looked at if you sell right now in my opinion.About 3m shares traded today so far. Also cant figure why your would sell. So how are people encouraged to sell?

[Beagle]

About 3m shares traded today so far. Also cant figure why your would sell. So how are people encouraged to sell?


Is that a rhetorical question or are you asking how will brokers find the tens of millions of shares needed for the MSCI rebalance ?

[minimoke]

Is that a rhetorical question or are you asking how will brokers find the tens of millions of shares needed for the MSCI rebalance ?More a musing than a rhetorical. There are sti all those little trades (bots) but it takes a seller to complete. Given market is down today there must be a compelling story to encourage people to sell today. With a more compelling story on 31 May I cant see why you would sell today.

As for finding shares for the 31"st I am assuming someone/s is accumulating now, and driving price down, to have a trove ready to shift on the 31st

[waterboy]

Does anyone know how shares bought for the msci will be distributed when there is a dual listing. Is is somehow split between nz and australia. The volumes through the asx seem to be a lot higher than nz so price mainly driven by asx. Just curious.

[BlackPeter]

Does anyone know how shares bought for the msci will be distributed when there is a dual listing. Is is somehow split between nz and australia. The volumes through the asx seem to be a lot higher than nz so price mainly driven by asx. Just curious.

It is the same shares - no Kiwi or Ossie tags on them, and they can be freely sold to wherever they find a better home. Funds will buy wherever they get a better price.

[gbogo]

Need you head looked at if you sell right now in my opinion.

I'm square, cos i got this wrong so many times lately. I'm tempted to buy, but what if.. (I have learnt that crazy what-ifs can be very profitable or money-saving over the years...)

so what if, the hedge fund have bought all the ATM shares that the asset managers need for MSCI rebalance. and so there is a series of large off-market trades at the end of the month, which don't move the price at all. or, perish the thought, slightly lower on the day, because the asset managers realise what is going on. Meanwhile all the retail punters and others who are long at $13.00+ but hanging on for the "index bounce", are going.. what happened? as it drops away to $10.40.. on June 2nd. and maybe, just maybe, it will be past the 20% stop-loss level that people may have.. and then maybe, some slightly negative news comes out.. (more competition? unhelpful regulation? who knows..)

just make me think there is a risk of more downside than upside over the next few weeks. So will keep my singed powder dry for a bit longer...

[minimoke]

I.. what happened? as it drops away to $10.40.. on June 2nd. and maybe, just maybe, it will be past the 20% stop-loss level that people may have.. .I'm picking an increase in price on 31 May and on Monday we will see price fall back as profit takers enter. But not 20%

[couta1]

I'm square, cos i got this wrong so many times lately. I'm tempted to buy, but what if.. (I have learnt that crazy what-ifs can be very profitable or money-saving over the years...)

so what if, the hedge fund have bought all the ATM shares that the asset managers need for MSCI rebalance. and so there is a series of large off-market trades at the end of the month, which don't move the price at all. or, perish the thought, slightly lower on the day, because the asset managers realise what is going on. Meanwhile all the retail punters and others who are long at $13.00+ but hanging on for the "index bounce", are going.. what happened? as it drops away to $10.40.. on June 2nd. and maybe, just maybe, it will be past the 20% stop-loss level that people may have.. and then maybe, some slightly negative news comes out.. (more competition? unhelpful regulation? who knows..)

just make me think there is a risk of more downside than upside over the next few weeks. So will keep my singed powder dry for a bit longer... Yes quite unpredictable methinks, strange behaviour currently going on with SPK and RYM whose prices should be dropping leading up to Thurs as they will be sold down to allow A2 to take it's rightful size piece of pie, why would you pay top dollar now if you can get a bargin in a few days.As always plenty of games being played behind the scenes and you don't want to be the one put into checkmate.

[minimoke]

One source of concern now put to bed. 150,000 cows to be slaughtered over the next two years out of a total population of 6.5m cow. At 2.3% of population shouldn't have any impact on ATM

[Beagle]

Natural accretion in numbers in the normal course of events on a national basis will see that replaced very easily and affected farms only have to stay fallow for 60 days. No worries, bring on $13 again.

[freddagg]

One source of concern now put to bed. 150,000 cows to be slaughtered over the next two years out of a total population of 6.5m cow. At 2.3% of population shouldn't have any impact on ATM

They are including cattle already slaughtered so 126000 to go. About 10 million cattle in NZ therefore only 1.26% of the national herd. (Probably less than deaths by natural causes)

[minimoke]

They are including cattle already slaughtered so 126000 to go. About 10 million cattle in NZ therefore only 1.26% of the national herd. (Probably less than deaths by natural causes)26,000 not yet slaughtered but in the process. Plus 126,000

[Hectorplains]

26,000 not yet slaughtered but in the process. Plus 126,000

That's a tiny percentage of the national herd, and then what percent of that are A2M aligned cows?

[minimoke]

That's a tiny percentage of the national herd, and then what percent of that are A2M aligned cows?

Half of sweet bugger all

[bull....]

this is huge problem for a2 if the cull gets even bigger , less supply bad bad bad .....

[bullfrog]

That's a tiny percentage of the national herd, and then what percent of that are A2M aligned cows?
M-b is a wake up call for all companies relying on one biological(?) raw material, which is vulnerable to the randomness of nature. I’d like to see ATM develop a bit of diversity.. almond milk anyone? Interesting to see if the big boys price in bio-security.

[Joshuatree]

Almond milk is 3% almonds and 96% water.
Rump steak on special here atm. Not a nice thought though thinking one may be eating MB meat:eek2:. Even though its supposed to be safe for humans be nice to see a link to that for verification. Is A2 meat marketed as such, now theres an added value thought:t_up:

[minimoke]

Is A2 meat marketed as such, now theres an added value thought:t_up:Given as id a milk protein I am not sure how this would translate into meat

[Joshuatree]

Nor am i , great marketing opp though.

[couta1]

this is huge problem for a2 if the cull gets even bigger , less supply bad bad bad ..... Tut Tut bull, more mischief making. The normal annual cull is around 1 millions cows a year, so cull to date is completely insignificant and can be adjusted to allow for this problem ie count the diseased animals as part of the normal cull.

[Sideshow Bob]

I don't see MB as a major for A2 (but is a concern regardless). It is in almost every other country in the world, including Australia - and farmers manage it, culling at any sign of the disease. No threat to human health.

I would doubt if the outbreak would have a disproportionate effect on A2 suppliers, and think they would be probably more immune - sourcing their cattle/semen through more regular sources, rather than traded stock. With the initial main outbreak in South Canterbury, they were centered around cattle from a large multi-farm operation, from what I understand were aligned with Oceania Dairy. Wouldn't think A2 farmers would be buying cows/calves from such sources - ie would need to know they were A2 and probably confirmation of breeding possibly.

The MOST concerning aspect though is MPI's response. There have long been doubts on their ability to handle biosecurity breaches, and this has perpetuated such doubts. My understanding is that they knew about the first case late 2015 in Southland, and now they have the police involved trying to find the source. That is over 2.5 years ago, and they should have had a blitzkrieg on the disease then, and had the police on the job, if that was the way they wanted to go.

It has also shown NAIT to be a failure, both from a organizational/system basis, but also from farmer buy-in - and as a generalization, farmers have been much too casual/lax on it, rather than looking for the benefits of it.

If we got a FMD outbreak or similar, then would be extremely serious and would have to question preparedness and response for such an event. Even though lining up production in Australia and other markets for fresh, that would put very serious pressure on A2 and its share price (and the whole NZ economy).

[Sideshow Bob]

No stopping the infant formula business in Australia - production has doubled in the last few years.

https://www.nutraingredients-asia.com/Article/2018/05/28/China-infant-formula-demand-Product-shortages-continue-in-Australia-despite-increased-production?utm_source=newsletter_daily&utm_medium=email&utm_campaign=29-May-2018&c=vyBYncJCWKXc%2B3JN%2BtVXlv%2FJ1kxsPWkZ&p2=

[bull....]

Tut Tut bull, more mischief making. The normal annual cull is around 1 millions cows a year, so cull to date is completely insignificant and can be adjusted to allow for this problem ie count the diseased animals as part of the normal cull.

no guarantee the cull will eradicate the disease , if it spreads more culling will decrease the milk supply. isnt a2 cows mainly in sth island where most of the disease is?

[44wishlists]

A reminder that the deal between Fonterra and A2 signed in Feb. A2 milk will ALSO be sourced from Australia. Unless there is also a massive outbreak of MB in Australia, otherwise, I would be more concern (only if I really want to concern just for the sake of concerning) over SML than A2 at present.

[bull....]

Im getting the idea behind all the heavy short selling now

[minimoke]

no guarantee the cull will eradicate the disease , if it spreads more culling will decrease the milk supply. isn't a2 cows mainly in sth island where most of the disease is?Once again some context. 150,000 cows to be slaughtered over 1 - 2 years.

Currently 4.2m cattle slaughtered annually which includes 1m dairy cattle.

142 farms are likely to be depopulated in next couple of years. Growing to 192 over 10 years. There are 20,000 beef and dairy farms in NZ.

While I appreciate the lost to the individual herd owners I am at a loss to understand what the overall fuss is all about. Its really a matter of herd health and management. Something farmers deal with all the time. Something MPI deals with all the time. or supposedly deals with.

As a positive we should be able to look forward to cheaper beef on our supermarket shelves - but reality overall numbers are inconsequential.

As an aside I expect Synlait (and consequently ATM) to already have in place robust herd management processes - they dont want any A1 slipping in. So no impact there.

[Ggcc]

Im getting the idea behind all the heavy short selling now
I think short term you are correct and off course you need to be careful when investing someone else’s money into A2. Especially if you are trying to find the low entry point. Long term this company is a no brainer if growth still happens in these 50% amounts per annum. So both of you are correct problem solved 😊

[bull....]

Once again some context. 150,000 cows to be slaughtered over 1 - 2 years.

Currently 4.2m cattle slaughtered annually which includes 1m dairy cattle.

142 farms are likely to be depopulated in next couple of years. Growing to 192 over 10 years. There are 20,000 beef and dairy farms in NZ.

While I appreciate the lost to the individual herd owners I am at a loss to understand what the overall fuss is all about. Its really a matter of herd health and management. Something farmers deal with all the time. Something MPI deals with all the time. or supposedly deals with.

As a positive we should be able to look forward to cheaper beef on our supermarket shelves - but reality overall numbers are inconsequential.

As an aside I expect Synlait (and consequently ATM) to already have in place robust herd management processes - they dont want any A1 slipping in. So no impact there.

no one really knows where the cull will go and how far , but assumptions on growth for a2 are very strong and fully factored in share price i reckon so any hiccupp to the forecasts will be punished very bad hence why all the short selling probably people hedging there bets going forward

[Beagle]

A2 and Synlait currently the same price ! Which has better prospects ?
Disc: I have a bob each way with an almost identical number of shares in each company.

[minimoke]

A2 and Synlait currently the same price ! Which has better prospects ?
Disc: I have a bob each way with an almost identical number of shares in each company.How odd
I topped up the other day with both at $10.00 thinking this would be the only time they would have parity. I have equal amounts (other than $2) invested in both ATM and SML. ATM is up 18% and SML is up 42%. Long term I like ATM better.

[couta1]

no one really knows where the cull will go and how far , but assumptions on growth for a2 are very strong and fully factored in share price i reckon so any hiccupp to the forecasts will be punished very bad hence why all the short selling probably people hedging there bets going forward And if a large Meteorite hits the earth, I reckon the SP would also get punished really badly as well. PS-Shorters might get a little bit of incinerating on Thursday.

[Sideshow Bob]

As a positive we should be able to look forward to cheaper beef on our supermarket shelves - but reality overall numbers are inconsequential.



Most of it goes to burger patties/manufacturing, and exported to the US.

Not much good for beef after being sucked dry for years - but on the upside any of the steak cuts would be great exercise for your jaw!

[Beagle]

How odd
I topped up the other day with both at $10.00 thinking this would be the only time they would have parity. I have equal amounts (other than $2) invested in both ATM and SML. ATM is up 18% and SML is up 42%. Long term I like ATM better.

FNZC think competitors (like Synlait) are going to eat Fonterra's lunch
http://www.sharechat.co.nz/article/0cc0819c/first-nz-capital-grows-dark-on-fonterra-as-capital-spend-fails-to-spur-earnings.html?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Tuesday+29+ May+2018
Just as well ATM got a bob each way on who supplies them going forward.

[sb9]

A2 and Synlait currently the same price ! Which has better prospects ?
Disc: I have a bob each way with an almost identical number of shares in each company.

SML currently up by 5c at 10.55 compared to 10.50 for ATM. Who would've thought.....

[minimoke]

no one really knows where the cull will go and how far , but assumptions on growth for a2 are very strong and fully factored in share price i reckon so any hiccupp to the forecasts will be punished very bad hence why all the short selling probably people hedging there bets going forward
We don't know how far the cull will go. Bu tlets deal with what we know. Synlait and A2 farms are subject to rigorous control to ensure herds are and stay A2

Synlait has been rigorously testing for M Bovis for ages. If it was on one of there farms we would probably know.

Farmers are queuing up to be a Synlait supplier. Of course they will be M Bovis free to be part of the supply chain. (Actually might see more farmers want to be part of this supply chain now!)

M Bovis is not like Dydymo - it cant just end up on a birds foot and fly from farm to farm. A2 farms will make sure it doesn't enter their front gate.

Those at risk of M Bovis will be those who buy untagged cows or who have been lax in their herd transfer management.

There are much bigger and more realistic risks - like exchange rates or Donald nuking Korea at play.

[couta1]

SML currently up by 5c at 10.55 compared to 10.50 for ATM. Who would've thought..... One of them is a better long term buy, by a row of milk cans.

[BlackPeter]

A2 and Synlait currently the same price ! Which has better prospects ?
Disc: I have a bob each way with an almost identical number of shares in each company.

Good question. I would think that ATM (forward PE of 28.6, CAGR of 49 if they can manage to keep growing that fast; highly scale-able model and low capital requirements) offers potentially (and short term) higher returns than SML, however - as well higher risks. Imagine the following scenarios:

Some scientist discovers at some stage that A1 milk might have benefits over A2 (I don't expect that, but hey - some years ago nobody knew about the benefits of A2 over A1). The A2 bubble would deflate quite quickly.
On the other hand - if we assume the A2 success story continues, than give it another 15 years or so and everybody will sell A2 milk. Maybe ATM still keeps a first mover advantage, but their margins (and with that the SP) will shrink.
I think no matter how you spin it. but the amazing growth of ATM will probably rather soon come back to earth.

SML (forward PE of 20.5 and CAGR of 15) however is a well managed but old fashioned production company. While they need (lots of) capital to expand, they do have a culture of picking opportunities. A2 is one of them, but Lactoferrin, grass fed milk and just offering the customers milk from better managed farms (environmentally as well as animal welfare) allows them to charge a "feel-good" factor.

SML would be hit if A2 goes for some reason bust, but it would not kill them.

SML as well will at some stage slow down in further growth, but than - they have the better PE :);

So - I guess it depends on your risk profile and your investment horizon which of the companies you prefer ....

Discl: hold lots of SML and (at current) no ATM ... but still waiting for the shorters to gift me some reasonable priced ATM as well ;);

[Leftfield]

A2 and Synlait currently the same price ! Which has better prospects ?
Disc: I have a bob each way with an almost identical number of shares in each company.

ATM by a country mile!

[couta1]

ATM by a country mile! Amen to that.

[steveb]

yes I sold my ATM and bought SML when the price dipped to $6.55 in feb,and am now looking at going back the other way.I miss the cut and thrust of ATM.

[bull....]

lots of mooing cows today

[couta1]

lots of mooing cows today And a few bleating sheep to boot.

[minimoke]

lots of mooing cows todayI'm hoping its a last gasp effort to drive prices down so they can be collected before selling into the MSCI index buy.

[gbogo]

I'm square, cos i got this wrong so many times lately. I'm tempted to buy, but what if.. (I have learnt that crazy what-ifs can be very profitable or money-saving over the years...)

so what if, the hedge fund have bought all the ATM shares that the asset managers need for MSCI rebalance. and so there is a series of large off-market trades at the end of the month, which don't move the price at all. or, perish the thought, slightly lower on the day, because the asset managers realise what is going on. Meanwhile all the retail punters and others who are long at $13.00+ but hanging on for the "index bounce", are going.. what happened? as it drops away to $10.40.. on June 2nd. and maybe, just maybe, it will be past the 20% stop-loss level that people may have.. and then maybe, some slightly negative news comes out.. (more competition? unhelpful regulation? who knows..)

just make me think there is a risk of more downside than upside over the next few weeks. So will keep my singed powder dry for a bit longer...

or a few days earlier, even.. so now, almost everyone who has bought in the last 3 months is under water..

[Ggcc]

We will see who is right, but in 12 months time I am hoping atm outrun synlait. But I have both investments so it does not bother me. I see atm being around $15 in 12 months time and synlait around $14 at that same time. Mind you I could be wrong and we could see A2 at $20 and sunlait sitting around $18 👌

[Beagle]

http://www.scoop.co.nz/stories/BU1805/S00884/synlaits-liquid-packaging-facility-is-on-track.htm

I find it difficult to split these two. ATM undoubtedly have superb growth prospects but the FY19 PE is materially higher than SML and SML will directly benefit from ATM's growth in certain key markets anyway as well as a number of other growth initiatives, one of which is detailed in the link above.

On the other hand ATM has very strong prospects both within the scope of the SML relationship and outside this through its new arrangements with Fonterra as well as growth from alternative dairy products.

Technically I think the chart of SML looks a LOT better than ATM, the latter of which could be a bit of a crowded trade.

Happy to have a bob each way for now and lets see how they go.

[sb9]

http://www.scoop.co.nz/stories/BU1805/S00884/synlaits-liquid-packaging-facility-is-on-track.htm

I find it difficult to split these two. ATM undoubtedly have superb growth prospects but the FY19 PE is materially higher than SML and SML will directly benefit from ATM's growth in certain key markets anyway as well as a number of other growth initiatives, one of which is detailed in the link above.

On the other hand ATM has very strong prospects both within the scope of the SML relationship and outside this through its new arrangements with Fonterra as well as growth from alternative dairy products.

Technically I think the chart of SML looks a LOT better than ATM, the latter of which could be a bit of a crowded trade.

Happy to have a bob each way for now and lets see how they go.

Non winners or losers today on par, both closed at 10.55....

Probably this should go on SML thread, surprised not to see an announcement from the company re the above news article.

[minimoke]

And there we have it. I ve made a parity buy of ATM at 10.00 and SML at 10.00. Lets see how many more fingers I loose with these knives.
Posted this less than a week ago. Didn't think Id see parity ever again. But a week later it is and at 10.55. Cant complain about that.

[Valuegrowth]

According to one chief economist culling more than 150,000 head of cattle will have a similar impact on the sector as a drought. I noticed whenever there was drought, performance of Agriculture related companies were below expectations. If culling is equal to drought, then there could be some impact on the sector in the short run. I take these things as short term events. Whenever there is good rain barring heavy rain during harvest season, Agriculture output will go up. During these types of situation, if panic set stock prices could go down. Those who miss promising stocks will begin to accumulate as long as they see great value and growth. Those who panicked when there was short term animal disease such as bird flu and mad cow missed some multibagger opportunities.

[Joshuatree]

I'm hoping its a last gasp effort to drive prices down so they can be collected before selling into the MSCI index buy.

thanks mm.MSCI review and reset happens by the 31st may i think. Is this the NZ biggest stocks index or one of their international/australasian ones?. I understand fund managers and index funds etc get set early on this reset so may already have done their buys. Any other timeline/s appreciated.

[bull....]

italy problems could be a2 problem today

[couta1]

thanks mm.MSCI review and reset happens by the 31st may i think. Is this the NZ biggest stocks index or one of their international/australasian ones?. I understand fund managers and index funds etc get set early on this reset so may already have done their buys. Any other timeline/s appreciated. No ,index tracking funds can only buy on May 31st, non index tracking funds can buy at other times.The MSCI NZ index is made up of the seven biggest stocks by market cap.

[minimoke]

MSCI. ATM on current market cap woudl put it in third spot behind Auckland Airport and Meridian. In front of Fisher and PAykel, Spark, Ryman and Fletchers
(edit: pre free float adjustment)

[couta1]

italy problems could be a2 problem today Correction, Italy problems could be NZX problem today.

[777]

No ,index tracking funds can only buy on May 31st, non index tracking funds can buy at other times.The MSCI NZ index is made up of the seven biggest stocks by market cap.

But then a lot of index tracking funds also have non index tracking funds and they could have been buying up ATM in these funds and just transfer them to the index tracking fund on the 31st.

[bull....]

But then a lot of index tracking funds also have non index tracking funds and they could have been buying up ATM in these funds and just transfer them to the index tracking fund on the 31st.

correct , thats why i believe it will be a non event or down as a surprise

[couta1]

But then a lot of index tracking funds also have non index tracking funds and they could have been buying up ATM in these funds and just transfer them to the index tracking fund on the 31st. Possible, we are all speculating on possible scenarios, aside from A2 there should be a sale on other constituents in that index, as their slice of the pie is made smaller.

[minimoke]

Heres one for Chartists

[Joshuatree]

correct , thats why i believe it will be a non event or down as a surprise

Yes that is my experience too from watching index resets on the ASX via H/C.

[bull....]

those lows on the hrlies from last week look like potential

[couta1]

those lows on the hrlies from last week look like potential Fantastic, what an absolute bargin and gift.Lol

[t.rexjr]

Yes that is my experience too from watching index resets on the ASX via H/C.

They certainly don’t play fair, that’s for sure. I’m picking the climb will only come after the funds have their fill. It may be less bounce and more steady return to whatever norm is

[Investor]

MSCI. ATM on current market cap woudl put it in third spot behind Auckland Airport and Meridian. In front of Fisher and PAykel, Spark, Ryman and Fletchers
(edit: pre free float adjustment)


8th. https://www.nzx.com/markets/NZSX

[minimoke]

8th. https://www.nzx.com/markets/NZSX8th overall market cap - but MSCI is based on free float so you have ti unload a few at the top and poke around the edges to get the float value. (I cant be bothered doing that as it is a purely academic exercise given ATM is going into the Index - someone else might like to do it though.)

[couta1]

Looks like shorters covering their bums before tomorrow.Don't want to risk a possible incineration.

[minimoke]

Looks like shorters covering their bums before tomorrow.Don't want to risk a possible incineration.The sense of anticipation is rising. Some say it will go up tomorrow. Some say no change. Some say expect a fall. Given I've put new skin in the game I am obviously backing Option One and expecting today is the day the booster rockers have fired, not the ballistic parachute being set off

[allfromacell]

Looks like shorters covering their bums before tomorrow.Don't want to risk a possible incineration.

I think we're just following Bellamy's, BAL is up 6.5%.

[carrom74]

if you have ATM in your portfolio... one thing is for sure..What is see at 9am would have been drastically changed at 5pm(only IF you have ATM)...Jeez these movements are like pendulum swings...