ATM - A2 Milk Corporation Limited

[Fisherking]

Fisherking, just As a matter of interest who do you think is winning the overall grocery war at the moment - Countdown or New World/Pak n Save?

Can't give too much away sorry. Its a real war, things were very tight 6 - 12 mths ago but I'm seeing the good guys beginning to pull away and I expect this will continue at a slow pace.

[robbo24]

I was just talking to a mate, she says it's hard to find A2 Milk in NZ. Is this true?

Apparently it's all the rage in Aus but not as available here? Tell me why.

[NT001]

I was just talking to a mate, she says it's hard to find A2 Milk in NZ. Is this true?
Apparently it's all the rage in Aus but not as available here? Tell me why.

As has been frequently mentioned on this thread, A2 milk is available in most Countdown supermarkets although in some stores you do have to look carefully to find it, and sometimes have to ask the shelf-stackers to go out to the storeroom and find some. They're obviously not exactly pushing sales. A few non-Countdown stores (New World, Pak'N'Save and health food stores) also stock it.

That said, the volume being sold is pretty small. According to the boss of Fresha Valley, the monopoly supplier of A2 milk in NZ, its supplies come from a single herd of 300 Friesians. As I understand it the average dairy cow produces about 11 litres a day, which means this herd would produce maybe 3,500 litres a day - not much to go around a whole country. Of course far more A2 milk than that is being produced by the herds contracted to A2MC-Synlait in Canterbury, but that's all earmarked for manufacturing into infant formula, not for local distribution as milk. A2MC keeps saying vaguely that it wants to tackle the NZ supply issue which is a legacy contractual problem, but frankly the NZ market is not its priority at the moment.

[robbo24]

As has been frequently mentioned on this thread, A2 milk is available in most Countdown supermarkets although in some stores you do have to look carefully to find it, and sometimes have to ask the shelf-stackers to go out to the storeroom and find some. They're obviously not exactly pushing sales. A few non-Countdown stores (New World, Pak'N'Save and health food stores) also stock it.

That said, the volume being sold is pretty small. According to the boss of Fresha Valley, the monopoly supplier of A2 milk in NZ, its supplies come from a single herd of 300 Friesians. As I understand it the average dairy cow produces about 11 litres a day, which means this herd would produce maybe 3,500 litres a day - not much to go around a whole country. Of course far more A2 milk than that is being produced by the herds contracted to A2MC-Synlait in Canterbury, but that's all earmarked for manufacturing into infant formula, not for local distribution as milk. A2MC keeps saying vaguely that it wants to tackle the NZ supply issue which is a legacy contractual problem, but frankly the NZ market is not its priority at the moment.

Interesting, thank you. As you can tell I am not a regular reader of this thread - thanks to snapiti too ;)

[mattwanz]

UK Facebook page seems to be growing must be a good sign https://www.facebook.com/a2MilkUK

[ziggy415]

UK Facebook page seems to be growing must be a good sign https://www.facebook.com/a2MilkUK
good to see them pushing things along with free samples....the A2 message appears to be gaining ground....must remember tho... buying milk for $1 and selling for a $1...getting a bigger truck doesnt make more profit.....would like to know who keeps selling just as the buys start gaining traction

[Wolf]

This downtrend isn't going to stop until the supply disappears.

So where is the supply coming from and when will it stop?

Milford have been accumulating for a while now but where is this supply coming from? Amp sold down to them earlier but seem to have stopped. Alot of traders and investors most likely shaken out. I read something about freedom foods going to sell down but they have accumulated recently?

Once this supply goes ATM Is going to rocket.

[ziggy415]

This downtrend isn't going to stop until the supply disappears.

So where is the supply coming from and when will it stop?

Milford have been accumulating for a while now but where is this supply coming from? Amp sold down to them earlier but seem to have stopped. Alot of traders and investors most likely shaken out. I read something about freedom foods going to sell down but they have accumulated recently?

Once this supply goes ATM Is going to rocket.
my money is on a takeover by Freedom.....make a few noises about selling down...soften the sp....Joe public gets twitchy and exasperates the slide....of course $10.000 profit last year helps too

[ziggy415]

hey Mac...where does Synlay chinese registration fit in....I think there,s a tie up with Bright Foods but thats all

[MAC]

Ziggy, the annual report had this to say, the ATM distributer is China State Farm, Bright Dairy is a Synlait associate.

“The regulatory environment for infant formula sold in China has been evolving, given the Chinese Government’s aim to improve product quality and bring confidence back to the industry. As part of this, there have been changes to access arrangements for imported infant formula including a requirement for manufacturing companies and brands to achieve a new form of registration from May 2014. Whilst we believe this approach should ultimately be positive for quality producers, the short term impact of these changes has brought uncertainty into the market which has impacted many participants including a2MC.”

“The initial round of registrations did not include our manufacturing partner, Synlait Milk Limited (Synlait), primarily because its new canning facility had not been commissioned. The Minister of Primary industry advised in April 2014 that most if not all New Zealand based infant formula manufacturers will ultimately achieve registration.”

“As a result of the uncertainties around registration impacting the confidence of sub-distributors and a slower build of the network by our distributor China State Farm, our infant formula sales into China were well below plan in the second half FY14.”

[ziggy415]

thanks Mac :t_up:

[Joshuatree]

I was just talking to a mate, she says it's hard to find A2 Milk in NZ. Is this true?

Apparently it's all the rage in Aus but not as available here? Tell me why.

Its really quite hard to pick out from all the others;it does not stand out and is the same blue colour with small A2 letters. You really have to hunt for it even if you know its there. True my eyes aren't 20/20 but i find this weird as if its done on purpose; under understated.

[ziggy415]

Its really quite hard to pick out from all the others;it does not stand out and is the same blue colour with small A2 letters. You really have to hunt for it even if you know its there. True my eyes aren't 20/20 but i find this weird as if its done on purpose; under understated.
Josh, it was you that posted the largest shareholdings I think....any changes lately

[NT001]

Here's some more good news on the Chinese sales front.

http://adf.farmonline.com.au/news/magazine/industry-news/general/demands-fresh-for-a2/2713426.aspx

Meanwhile here's another article that only mentions A2 quite briefly, towards the end, but makes the interesting point that premium-priced "alternative" milks such as soy, almond and A2 are always going to be hard to sell in markets such as the UK, Europe and USA where plain milk is considered a cheap basic supermarket commodity and consumers object to paying higher prices. By contrast, in new markets like China good milk is seen as a premium food in itself, and price is not such a problem for well-heeled consumers.

http://www.dairyreporter.com/Markets/Western-functional-milk-success-limited-different-picture-in-Asia

[see weed]

my money is on a takeover by Freedom.....make a few noises about selling down...soften the sp....Joe public gets twitchy and exasperates the slide....of course $10.000 profit last year helps too

Fully agree. I have noticed a couple of biggish buys on closing the last few days. On 23/9/14 342,000 went through at 4.57pm and 180,000 today. And soon after 100,000 on the sell side will disappear soon after, then in the morning the 100,000 will come back, like they are a block, or trying to scare other holders to sell because of the big build up of sellers. So my theory is a biggish small share holder is putting a biggish block on sell side to stop sp from going up too fast, to give them time to get their funds together to buy some more at around 60c. But then again it's just a theory. Enlightened five more people today of a2 milk.

[ziggy415]

Fully agree. I have noticed a couple of biggish buys on closing the last few days. On 23/9/14 342,000 went through at 4.57pm and 180,000 today. And soon after 100,000 on the sell side will disappear soon after, then in the morning the 100,000 will come back, like they are a block, or trying to scare other holders to sell because of the big build up of sellers. So my theory is a biggish small share holder is putting a biggish block on sell side to stop sp from going up too fast, to give them time to get their funds together to buy some more at around 60c. But then again it's just a theory. Enlightened five more people today of a2 milk.
NT article says A2 looking to sell 50000 litres per month increasing to 3 million next year....thats not to be sneezed at and add in milk powder and we have some big sales going on.....the group selling down must know this yet still the buyers keep getting clobbered......one thing that pops up is its all aussie milk....makes one wonder if Fonterra monopoly is a detriment to nz milk companies

[airedale]

I suppose that the current drop in the market price of milk powder works in to the advantage of ATM and other producer companies.

[Harrie]

Why wouldn't ATM want to raise additional funds by listing on the Aussie sharemarket, so that they can take full advantage of the brand they have established there already.
IMHO they are moving too slow in UK and USA, much faster promotion is required, but China looking very positive. Thanks for the link NT.
Interesting tie up between Bega, pactum a2 and freedom foods!
So A2 uses the Norco co-op as its supply chain. Where does Norco fit in with everything? Are they also associated with freedom foods?

[NT001]

There's been speculation that Freedom Foods might be lurking somewhere behind the strange behaviour of ATM's share price. Now I'm no expert in SA and analysing company balance sheets but I've just been doing a quick read-around and come up with two articles in Aussie papers that suggest to me that Freedom may not have a lot of money to throw around. Its recent purchase of ATM shares was actually quite small and very likely just to offset an earlier dilution of its stake. And as we've discussed previously, Freedom has talked of possibly selling off its ATM stake to help fund its own business expansion iin Asia and the US. Added to which, it would seem possible that A2MC may soon need additional capital for its own expansion.

On the other hand, as the Sydney Morning Herald piece notes, Freedom's share price looks ridiculously high on the face of it, and the main benefactor from that would presumably be its 60% shareholder, the Perich family. The SMH piece is a year old now but I don't think a lot has changed since then, and Freedom's SP is still around A$3, just a bit lower than it was then. Its market cap is A$450m which means Perich is worth at least A$270m, so it seems to me he could certainly make a play for A2CM. Is that where we should be looking?

I'd appreciate any thoughts from those much wiser than me in such matters.

http://www.smh.com.au/business/freedom-foods-looks-for-asian-partner-to-boost-exports-20140831-10anhv.html

http://www.smh.com.au/money/investing/freedom-foods-share-price-defies-logic-20131028-2waoz.html

[NZSilver]

Surely the dropping NZ $ and Milk price will drive profits for ATM

[MAC]

Given the Chinese fresh milk opportunity is a new market just launched and guidance has just now been released, I think the market has not yet realised quite a major development !!!!!

Estimated 2015 sales (ATM): 3,000,000 1 litre bottles
Retail Price (Jingdong): 49yuan = $10.1NZD per bottle

That’s annual internet sales revenues of 3,000,000 x 10.1 = $30.3M

The internet retail price in China would have probably been agreed by ATM to maintain a minimum gross margin after transport costs, Jingdong margins and overheads.

Let’s say that COGS overall are around 65%, as per fresh milk in Australia, it could well be a lot better than that given the opportunity value of the market, but that still provides roughly a minimum floor for net revenues = $10M

The analyst consensus revenue estimate for ATM (FY15) is $149M, Chinese fresh milk revenues should have just increased that figure by at least 10 / 149 = 7% overnight, probably much more.

tick tock

[MAC]

And, ATM have this to say about the outlook beyond 2015;

“We could double our fresh milk volumes to China every year for several years, based on the response from customers and Chinese industry feedback,”

“There could be a longer term need to bring on more farms to meet demand and transport arrangements are likely to evolve with the market, too.”

This fresh milk market to China could potentially be almost as big as infant formula.

“The A2 Milk Company was also having “interesting conversations” about marketing fresh product elsewhere in Asia, with Japan and Korea on the radar, but also major cities like Singapore, Bangkok and Jakarta”

I'm genuinely surprised the SP is not going nuts over this development ???

[NT001]

I'm genuinely surprised the SP is not going nuts over this development

Really? I'm not. No one inNZ knows about it. The NZ media don't run stories about A2's success in Australia-China. In fact they don't even run stories about A2 in NZ, except for Keith Woodford's pieces in the SST which are tucked away where not many readers will see them. They don't regard A2 as a success story in NZ, which it isn't, and they don't like stories that show Australia can teach NZ how to succeed.

[MAC]

Yeah NT, it has all happened so very quickly hasn't it,

Just four weeks ago ATM sent a trial fresh milk shipment to china as advised in the recent full year results commentary, and then just yesterday, less than four weeks later, ATM told us they will sell 3,000,000 units next year, doubling each year going forward.

Yet, ........., there has been no announcement to the share market ?

Analysts will wake up to it over the next few days but one would have thought that ATM might help them along a little with an official announcement.

[see weed]

Yeah NT, it has all happened so very quickly hasn't it,

Just four weeks ago ATM sent a trial fresh milk shipment to china as advised in the recent full year results commentary, and then just yesterday, less than four weeks later, ATM told us they will sell 3,000,000 units next year, doubling each year going forward.

Yet, ........., there has been no announcement to the share market ?

Analysts will wake up to it over the next few days but one would have thought that ATM might help them along a little with an official announcement.

Don't worry, I got 100 flyers printed the other day and have been handing them out at Pak n Save and Countdown whenever I go shopping. It gives me great pleasure seeing people walking out with their first bottle of a2 milk. They seem to be very excited to get home to try this new product. Just like a child with it's first ice cream. So i have worked it out, 10 people a day = 3650 people a year. Then if they tell 100 of their family and friends =365,000 and they tell another 10 each , you know the rest. Well thats it, just one little old door to door saleman from way back, I love it. Go a2 you beauty. I'm just waiting for the sp to turn , then bang, I'll buy some more. Hope this is'nt being to optimistic.

[ziggy415]

Really? I'm not. No one inNZ knows about it. The NZ media don't run stories about A2's success in Australia-China. In fact they don't even run stories about A2 in NZ, except for Keith Woodford's pieces in the SST which are tucked away where not many readers will see them. They don't regard A2 as a success story in NZ, which it isn't, and they don't like stories that show Australia can teach NZ how to succeed.
Interesting to see Burger fuel may be ditching franchise holders in favour of in house ownership....maybe this is why A2 is not pushed in nz....fresha valley has franchise for another couple of years.....spending money advertising A2 helps fresha more than A2

[Jasemc]

That's the reason. Once freshas license expire I'm sure a2 will put a bit more effort into nz but only a small market.

[see weed]

That's the reason. Once freshas license expire I'm sure a2 will put a bit more effort into nz but only a small market.
It might be a small market but there is a hell of a lot of a1 being drank in NZ. Well I'm not waiting, told another 15 people in the last 24 hours. I find 19 out of 20 people have never heard of a2. Nine times out of ten people want to know more , so tell them google it. Drank half bottle of Canterbury Cream 15%..( cheap Bailys) with half bottle of a2 last night. Very nice, no hang over.

[Jasemc]

All the promotional work is driving you to drink see weed!

[couta1]

It might be a small market but there is a hell of a lot of a1 being drank in NZ. Well I'm not waiting, told another 15 people in the last 24 hours. I find 19 out of 20 people have never heard of a2. Nine times out of ten people want to know more , so tell them google it. Drank half bottle of Canterbury Cream 15%..( cheap Bailys) with half bottle of a2 last night. Very nice, no hang over.
Gotta love this milk evangelist :cool:

[see weed]

All the promotional work is driving you to drink see weed!

Just an experiment.

[Jasemc]

Thats what they all say about alcohol!

[see weed]

Still reckon accosting stangers in the street has the potential to end badly.

Only do it on private occasions and if I see a1 milk in shoppers trolleys or people hanging around the milk bar in supermarkets. Never do it in the street. It takes 60 seconds or less to get an a2 flyer into their hands to take home and read.

[see weed]

Gotta love this milk evangelist :cool:

Any thing to promote a2 and help other sh.

[NT001]

ATM told us they will sell 3,000,000 units next year, doubling each year going forward. Yet there has been no announcement to the share market ? Analysts will wake up to it over the next few days but one would have thought that ATM might help them along a little with an official announcement.

The news stories in a few Aussie media about the potential to ship lots of fresh A2 milk from Australia into China are a great morale booster but still pretty speculative and do not amount to official contract announcements that could be issued as company news releases.

Besides, A2MC's corporate strategy in NZ is quite separate from that in Australia, largely for legacy reasons. In Australia, the market is highly profitable and the media are interested in A2 because the milk wars are a big continuing commercial story. The Australian market is also big enough to have created a lot of anecdotal reports of the benefits of A2 through both mainstream and social media. A2MC's PR effort there is specifically directed at boosting local sales in order to fund its offshore expansion, not pushing up the share price, although you might logically expect that to follow.

It would be nice if NZ media were to pick up the Australian media stories about A2 milk going gang busters into China, but as I've said before, that kind of story doesn't appeal to NZ media. And my impression is that the company itself is not particularly interested in boosting publicity in NZ where it is stuck with a distribution franchise agreement that has another 2-3 years to run and restricts what it can do here. I am pretty certain that despite what the owner of Fresha Valley told me about being able to fully meet any increased demand from NZ supermarkets, that is not actually the case, and there is not much point in A2MC trying to boost consumer demand in NZ (sorry see weed). In any case, sales of fresh milk in NZ could never be a major part of its global operation. Meanwhile, despite the delay in Synlait getting its full Chinese infant formula registration, A2MC is getting quite a bit of formula made by Synlait and packaged by New Milk, which is going mainly into Australia but also to other markets.

(http://www.sharetrader.co.nz/newreply.php?p=508957&noquote=1)I don't understand what's been happening with the ATM share price, but I really don't think it's connected in any way with the amount of A2 milk being sold in NZ.

[MAC]

My point was only that significant company outlook information such as this is very often released to the NZX by many companies and is very often marked as price sensitive.

I’m no expert on the market rules, and it may not be a binding matter, but still it does seem odd that ATM have electively chosen not to make an announcement.

On the other matter, I would agree that the NZ a2 fresh milk market is but a bizarre distraction to many, I would even say that it is best kept very small, local a2 milk production is best value added as infant formula for export, and that is what the company needs to be focusing on and has been.

[see weed]

Thanks for the info NT001 and MAC. If thats the case, I will stop promoting a2 if it is not going to be of any use to a2mc advancement.

[Jasemc]

see weed move to the uk and start promoting it there!!!!!!!!

[Harrie]

You are on the right track see weed, just in the wrong location, but appreciate your good works on behalf of puzzled S/H's
Any chance of offering your services to ATM in the UK? They need to get someone passionate like you to get sales going over there. Much bigger impact on ATM growth and therefore SP over there than here. When you have ATM with a 15% share of sales over there, give them a hand in the USA, they need you too!

[see weed]

see weed move to the uk and start promoting it there!!!!!!!!

Maybe 30 years ago. I'm happy to be in NZ for now.

[see weed]

You are on the right track see weed, just in the wrong location, but appreciate your good works on behalf of puzzled S/H's
Any chance of offering your services to ATM in the UK? They need to get someone passionate like you to get sales going over there. Much bigger impact on ATM growth and therefore SP over there than here. When you have ATM with a 15% share of sales over there, give them a hand in the USA, they need you too!

Thanks. If I went over there it would be holiday , not work.

[ziggy415]

been reading the london sharetrader thread for mosman re drilliing in Greymouth and the second post down is always reserved for advertising and the one that pops up the most is one for A2 milk....just checked and its all threads on sharechat....maybe I see it because im biased but at least its out there

[ziggy415]

you see it because Google knows you are interested in it (through search, web history, email if you use gmail). That's how google ads work, they only display ads they think are relevant to your interests.

i did a 3 month contract involving online furniture and for months afterwards every site I went to was displaying furniture ads.
big brother is watching me

[see weed]

you see it because Google knows you are interested in it (through search, web history, email if you use gmail). That's how google ads work, they only display ads they think are relevant to your interests.

i did a 3 month contract involving online furniture and for months afterwards every site I went to was displaying furniture ads.

In that case google should learn that ads to old faithful customers is not going to draw in many new ones.

[ziggy415]

big brother is watching me
just checked....wondered why the London exchange was trying to sell me genisis energy lol

[see weed]

If ATM Aussi branch income is over $100,000,000.00c , would that mean every time our NZ $ drops 1c, would add an extra, over $1,000,000 to ATM income ?

[Jasemc]

Was thinking if dollar falls then yes income is up but then the cost to spend in other countries IE expansion costs more in NZ dollars?

[Harrie]

I may be wrong here but the NZ dollar is only relevant for reporting purposes. I suspect that ATM hold reserves in Euro, Aus, pounds and US dollars, therefore expansion costs would not be totally funded from NZ dollars. Most likely Aussie dollars

[Harrie]

Who is doing the selling at 58c? NZ dollar falling, increasing fresh milk to China, increasing milk powder sales to China, increasing sales volumes in UK, Synlait about to get chinese authorisation, anecdotal evidence on the rise favourable to A2 milk, diversification of A2 dairy range possibilities, increasing scientific evidence against A1 beta casein....the list goes on.

[MAC]

Who is doing the selling at 58c? NZ dollar falling, increasing fresh milk to China, increasing milk powder sales to China, increasing sales volumes in UK, Synlait about to get chinese authorisation, anecdotal evidence on the rise favourable to A2 milk, diversification of A2 dairy range possibilities, increasing scientific evidence against A1 beta casein....the list goes on.

Perhaps those whom talk to the brokers frequently may have some insight to offer on that one ?

Even I'm starting to consider that the price is being pulled for a takeover, not normally being one for such conspiracy theories at all really.

[gv1]

Makes me wonder why FC didn't hedge Forex....great company only when everyone plays their part. Its a big loss in terms of exchange rate....board should be looking at who should take responsiblity for this. This reminds of PPl where the FC screwed the co.

[see weed]

Somebody is playing around and selling 2000 or 3000 every couple of minutes and making other small sh nervous who will also sell and play into their hands and push the sp down even further so then the manipulaters can come back in and buy at a lower price before the announcement of something very positive, that will push it up again. Thats my theory. Why would brokers allow this?

[Harrie]

Perhaps those whom talk to the brokers frequently may have some insight to offer on that one ?

Even I'm starting to consider that the price is being pulled for a takeover, not normally being one for such conspiracy theories at all really.

I suppose it may make sense MAC. Its a bit of a gamble though on behalf of the intending buyer. If you can manipulate the price to make a small loss or a smaller profit to the extent that you can then come into the market for a substantially higher number of shares paying something like a $1.00 c/f $1.50 if the MP was around $0.80 mark, then the reduced profit or small loss is far outweighed by the quantum of value saved on the purchase price.
Question is, would the larger players like Milford settle for somewhere around a $1.00? Thats a big premium on AWP of $60c, but as we know the top 10 shareholders make up more than 50% of shareholding.

[Under Surveillance]

Somebody is playing around and selling 2000 or 3000 every couple of minutes and making other small sh nervous who will also sell and play into their hands and push the sp down even further so then the manipulaters can come back in and buy at a lower price before the announcement of something very positive, that will push it up again. Thats my theory. Why would brokers allow this?
Perhaps because the more trades they facilitate, the more brokerage they are paid? Perhaps because the more bureaucratic are their practices the higher are their costs and the more they will need to charge clients?
In fairness, especially if sellers or buyers with call accounts are trading online, the broker would need to be clairvoyant to divine their motivations. I would be pissed off if my broker [Direct Broking/ANZ] shagged about with a question and answer session before acting upon my instructions.

[MAC]

Question is, would the larger players like Milford settle for somewhere around a $1.00? Thats a big premium on AWP of $60c, but as we know the top 10 shareholders make up more than 50% of shareholding.

Milford were buying at 90c back in April and have taken advantage of this present dip buying all the way to the bottom, their valuation in April at least, must thus have been greater than 90c.

I think it is unlikely they would settle for less than their valuation plus a healthy takeover margin, say 90c + 30% = $1.17,

Milford had this to say at reporting time;

Milford Asset Management's Mark Warminger welcomed the annual results as very positive.

The restructuring of the UK joint venture was "sensible", he said.

"The milk will be rebranded with new packaging and sold in one-litre bottles rather than two litre," Warminger said. "It will also be sold alongside other specialist milks, rather than with A1 milk."

"The most positive message to come from the result was the announcement of the US launch, which would be financed out of existing cashflow rather than by raising capital", Warminger said.

"The company confirmed its belief that there was opportunity for it in China, with Mr Warminger saying that its manufacturing partner, Synlait Milk is expected to receive registration for export into China"

[NT001]

I suppose it may make sense MAC. but as we know the top 10 shareholders make up more than 50% of shareholding.

I've been very suspicious about this for quite a while. I'm a novice when it comes to this kind of stuff, but I agree with MAC that it looks like manipulation, and with Harrie that it runs against all the fundamentals.

If it were part of a hostile takeover scheme from someone like Fonterra (which I actually doubt), the major shareholders would be aware of it and you'd expect them to make a few announcements that would push the share price up.

Which must leave one wondering whether the major shareholders themselves such as Mountain Road or Freedom Foods (Perich) or even Milford (on behalf of someone) are up to something. We just don't know. The issue is, can we find out who's doing the low selling, and can we do anything about it, like asking for a scrutiny of recent share transactions? I think that at least it's a good idea for us to be kicking this topic around so that if necessary we can say we've been suspicious.

Might it be aimed at a partial rather than full takeover?

Does JushuaTree or anyone else have the latest list of the top 100 SH? Not that that would necessarily shed much light, but could be interesting.

[bull....]

Maybe the price is falling because its overvalued - did you consider that

[MAC]

Maybe the price is falling because its overvalued - did you consider that

Post reporting analysts consensus "price target" is 80c, quite low but probably accounting for short term currency moves and Chinese regulatory matters, their valuations are probably higher.

Milford valuations are probably much higher again, per previous post.

My DCF is FY15 $1.10 which I consider a bit conservative actually.

[dingoNZ]

Maybe the price is falling because its overvalued - did you consider that

Yeahits not all conspiracies, maybe just overvalued in ST (or seen to be by the market).

I'm a holder too - long term however

[MAC]

This was Craig’s initiating price target at 90c, although I believe they have since adjusted and are presently 86c.

http://www.odt.co.nz/news/business/297765/genuine-opportunities-a2-milk

[see weed]

Maybe the price is falling because its overvalued - did you consider that

Yes, but why sell 100 little trades of about 2000 shares each? every 1 or 2 mins. Just sell the lot in one bundle and stop the shenanigans. I vaguely remember something similar a couple of years ago on another com. but can't remember why, the brokers would know. Brokers make you broker if you are not careful.

[NT001]

I find this all very peculiar. I don't dismiss the possibility that there's a big holder out there who for some reason needs quit his holding and is having to lower his price. But if you look through today's trades, there are many cases where identical very small parcels have gone through at the same time. Why would anyone buy or sell this way? For example at 13.34hrs three parcels of 1,182 shares each went through at 58c for $685.56 each. Doesn't make any sense to me.

[MAC]

This was Craig’s initiating price target at 90c, although I believe they have since adjusted and are presently 86c.

http://www.odt.co.nz/news/business/297765/genuine-opportunities-a2-milk

And, of course since then ATM have established and quantified a new market for fresh milk in China, something which I believe analysts are yet to price, and they have confirmed the US launch funded from three years forward revenue growth.

[bull....]

think I read some where of the 100s of infant formula brands currently available in china only a few will remain in the long run - so i wouldnt factor much growth for there infant formula business until they are proven performance also they are not going to make any money since they are spending it all on uk and us , they should build up there nz an aus first i would have thought was smarter than try and take on the whole world with there measly financial muscle

[MAC]

Or one might say that they have a humble $16M in cash as at FY14 and yet are still funding present market growth in China and the UK, not to mention the intended forward US expansion, from cash cow revenues and by far the highest gross margins within the Aus/NZ dairy sector.

Noting that, joint venture establishment costs are deducted prior to tax and IFRS NPAT.

The US expansion requires only US$20M over three years, easy from Australian revenues alone.

[Wolf]

I think it's Milford that's manipulating the price.

If you look at the SSH notices Milford sold 5m shares at the top before the AMP sell down which formed the top and downtrend.

Since then they have continued to accumulate selling blocks of shares and manipulating the price by breaking supports and soaking up this supply.

The price won't rise until Milford have what they want or it is to costly to drive the price down any lower. Due to lack of supply or increased demand which would result from good news. Once Milford have what they want it'll be in their interests to see a higher price.

I'd say this supply is coming from traders caught on the tech hype last year as there doesn't seem to be much movement in the top holders.

I'll throw up a chart I made with all these transactions when I find it but it looks pretty clear.

I don't think the price will go any lower than the 50c capital raising so bought a small holding.

This is only my view.

[Snoopy]

I think it's Milford that's manipulating the price.

If you look at the SSH notices Milford sold 5m shares at the top before the AMP sell down which formed the top and downtrend.

Since then they have continued to accumulate selling blocks of shares and manipulating the price by breaking supports and soaking up this supply.

The price won't rise until Milford have what they want or it is to costly to drive the price down any lower. Due to lack of supply or increased demand which would result from good news. Once Milford have what they want it'll be in their interests to see a higher price.

I'd say this supply is coming from traders caught on the tech hype last year as there doesn't seem to be much movement in the top holders.

I'll throw up a chart I made with all these transactions when I find it but it looks pretty clear.

I don't think the price will go any lower than the 50c capital raising so bought a small holding.

This is only my view.

Far too much conspiracy theory going on here in general (not wishing to pick on you Wolf).

Patents are running out, so there is a need to act globally on several fronts ( UK/USA/China ). Australia is not generating enough profits to do this, so another cash issue is inevitable. Best case scenario is that they will get this away at 50c. Institutions may want a bigger discount than that. There is no way the ATM share price can rise with ATM facing the financial headwinds it has ahead.

SNOOPY

[blobbles]

Think I might buy more now snoopy has said the SP will be heading south, the same line was said on the HNZ thread from 60c all the way to $1 for the past few years. The best contrary indicator I know of on ST!

[Harrie]

Wolf could well be correct, but looking at a renewed shareholder list is not going to give a lot of info because Milford would be buying around as much as they are selling. If there is no major movement in their holdings that would be a fairly big sign that there is something going on here.
By the same token a lot of Kiwisavers have transferred balances to them on the basis of relative performance numbers, so they would have to be careful that as a result on needing to show results at the end of Sept under the continuing disclosure rules for Kiwisaver that their relatively poorer showing with a substantial amount invested in growth shares including a 15% holding in ATM does not trigger a funds exit. Then you really would see a ATM price of 50c as they would be forced to sell under their mandate.
posted after the Boing!

[Harrie]

Actually where is the Boing? I presume the market is now closed and the Boing will happen tomorrow?

[Jasemc]

2 million share plus trade after 5.

[dingoNZ]

End of month and quarter, typical portfolio re-balancing. Same in a lot of stocks, FBU, SPK etc. Not much to read into, nothing unusual

[Jasemc]

End of month and quarter, typical portfolio re-balancing. Same in a lot of stocks, FBU, SPK etc. Not much to read into, nothing unusual

Its a big balance for one transaction.

[MAC]

Actually where is the Boing? I presume the market is now closed and the Boing will happen tomorrow?

One must await the ATM equivalent announcement tomorrow morning.

Perhaps they will also announce the Chinese fresh milk market outlook also for the three Chinese cities, Shanghai, Beijing and Guangzhou, also potentially Bangkok, Singapore and Jakarta.

Fresh milk to Asia could well be as big, maybe even bigger, than infant formula.

http://adf.farmonline.com.au/news/ma...2/2713426.aspx (http://adf.farmonline.com.au/news/magazine/industry-news/general/demands-fresh-for-a2/2713426.aspx)
http://adf.farmonline.com.au/news/ma...px?storypage=2 (http://adf.farmonline.com.au/news/magazine/industry-news/general/demands-fresh-for-a2/2713426.aspx?storypage=2)

[winner69]

Its a big balance for one transaction.

Maybe Milford rebalancing?

[barleeni]

I find this all very peculiar. I don't dismiss the possibility that there's a big holder out there who for some reason needs quit his holding and is having to lower his price. But if you look through today's trades, there are many cases where identical very small parcels have gone through at the same time. Why would anyone buy or sell this way? For example at 13.34hrs three parcels of 1,182 shares each went through at 58c for $685.56 each. Doesn't make any sense to me.

You can see a full list of the days trades here:

https://www.forsythbarr.co.nz/markets-and-research/companies/NZX/ATM#trades

I wont say it looks suspicious, but I would definitely agree that it seems highly peculiar to me! I cant fathom why you would see multiple instances of identical and consecutive trades of odd quantities??

[dingoNZ]

Maybe Milford rebalancing?


We'll see in three days time if there is a SSH. 2m shares @ 0.58 isn't a huge position in the scheme of things for an institution its probably just a cumulative offshore fund moving out or even switching between funds etc

[Jasemc]

You can see a full list of the days trades here:

https://www.forsythbarr.co.nz/markets-and-research/companies/NZX/ATM#trades

I wont say it looks suspicious, but I would definitely agree that it seems highly peculiar to me! I cant fathom why you would see multiple instances of identical and consecutive trades of odd quantities??


Yes there is something going on for sure.

[Jasemc]

Seems to be between 2 and 4 transactions at the same time same amount. Maybe some one is buying for four separate accounts even though owned by same person / company so they don't have to disclose to market so soon about major share holding. Not sure how rules work or if it's possible but maybe someone is pushing price down while accumulating somewhere else?

[K1W1G0LD]

It is definitely more interesting to come up with conspiracy theories as to why a companies shareprice is in the doldrums , happens with a lot of stocks . Newer and dare I say it, younger posters love conspiracies , but many older more experienced posters who have been investing much of their lives will tell you that the truth is usually a lot more mundane and boring and can be attributed to prevailing market conditions , or just be baffling. One thing though remains constant, the unpredictability of the market.

[Jasemc]

I'm looking forward to a mundane answer to the trading pattern today.

[Harrie]

MAC, I will have a guess and say that we might see a boing at the end of the day around 3c up tops. I believe that the synlait announcement was already discounted into the ATM price months ago. The market knows that the synlait announcement is positive for ATM so any announcement made by ATM tomorrow would need to be a lot more than that to move the price any higher than 3c. In fact we may even see a negative boing if no other positive news is added to the Synlait registration news. There may also not be any ATM announcement at all!
The only thing that is going to move the SP is positive news and projections on increased sales in UK and USA as well as China IMV.

[MAC]

I really couldn't say, happy to leave that sort of speculation to you traders, as a matter of idle interest though I do think it may well be a catalyst for a reversal, the SP is so absolutely and totally undervalued at 60c that any positive announcement at all, particularly one like this which initiated the dip in the first place, may well just end it also.

Still, either way ATM is an exceptionally good buy at this point, I've topped up recently and have never sold ATM shares, it's one of the better long term fundamental holds in the NZX IMO.

Disc: Have held for two years, happy to hold for another two and see out the 2016 plan

[Snoopy]

Think I might buy more now snoopy has said the SP will be heading south, the same line was said on the HNZ thread from 60c all the way to $1 for the past few years. The best contrary indicator I know of on ST!

You misunderstood what I was telling you about HNZ. There was serious risk in the share at the time it was trading at 60c, because of the non core property portfolio. Much of this risk has since been sorted. You might say by the skill of management. I might say by the pure luck of having a much stronger property market nationally than anyone envisaged. The truth is probably in the middle. Given the risk was sorted and the share price jumped so much to $1 is proof of how big a risk really was when the share was trading at 60c.

Likewise with ATM I am pointing out what I see as obvious risks. ATM is only cheap because it is trading well down from its previous highs. On any fundamental analysis it is still hugely expensive, to the extent it is the most highly valued food share to ever trade on the NZX. Consequently there is enormous downside risk in the share price if things don't go to plan from here.

SNOOPY

[stoploss]

You misunderstood what I was telling you about HNZ. There was serious risk in the share at the time it was trading at 60c, because of the non core property portfolio. Much of this risk has since been sorted. You might say by the skill of management. I might say by the pure luck of having a much stronger property market nationally than anyone envisaged. The truth is probably in the middle. Given the risk was sorted and the share price jumped so much to $1 is proof of how big a risk really was when the share was trading at 60c.

Likewise with ATM I am pointing out what I see as obvious risks. ATM is only cheap because it is trading well down from its previous highs. On any fundamental analysis it is still hugely expensive, to the extent it is the most highly valued food share to ever trade on the NZX. Consequently there is enormous downside risk in the share price if things don't go to plan from here.

SNOOPY

Surely the big jump from .60 to $ 1.00 shows there was too much risk priced in for the non core property portfolio ????

[MAC]

On any fundamental analysis it is still hugely expensive

Certainly the price target consensus of four professional analysts at 80c would disagree with you, as would Milford who have been buying heavily and probably the larger holders as we have not seen any really significant SSH's.

But you could be right and the rest of the world wrong, only time will tell, but do keep the habitual knocking going in the meantime if it gives you some sort of twisted thrill.

[Harrie]

Don't be too hard on Snoopy MAC, its useful to test our own opinions with other views, we need contrary opinion on this site whether we agree or not!
personally I am not a trader, my guess on ATM price rises due to the synlait announcement was just testing my short term theory.

[MAC]

All views are fine Harrie, bullish or bearish, it’s an open forum on which to comment, such views on valuation without a supporting fundamental basis for discussion and scrutiny though, whether that be a fundamental DCF basis or some alternate means, amount only to an opportunity for individuals to vent on the internet or to unduly influence or scare newbies. It’s an open forum, all comments and view are fine if they don't breach the forum rules, equally though there are some views, particularly habitual ones, that may be fairly named and shamed as such.

[Harrie]

Anyone know how many shares have been sold over the last 6 months?
If a large majority have been a single seller then you would have to expect that they are also a large holder in which case a disclosure notice would need to have been tabled.
There has been none that I can see other than a buy in by Mr Mair and his associated companies. Surely this must mean that shares are just being traded internally around the large nominee companies and those entities making up the nominee companies are simply trading amongst themselves.
I suspect that some of these entities are funds management groups who are getting close to breaching their mandates and need to get out quickly. The quicker that process needs to be the more they become price takers. On the other hand other groups within the same nominee group are happy to take these shares at a discounted price of course, hence the slow decline and stability around 60c which appears to be a price the seller can live with and the buyer can get great value out of.
lets hope that if this scenario is correct then the seller pulling the expoure to ATM back to within mandated guidelines is over soon.
If this was the case then the price has nothing to do with fundamentals which is why it is all very puzzling IMO to those who see enormous potential going forward.

[NT001]

This TV clip from Australia is a good example of why A2 milk is taking off across the ditch. A qualified nutritionist explains the science in simple terms and gets the message across really clearly. No need for A2MC to spend heaps on advertising.

http://tennesseansforrawmilk.com/2147/dr-joanna-mcmillan-explains-a2-milk-on-australias-today-show/

[winner69]

Anyone know how many shares have been sold over the last 6 months?
If a large majority have been a single seller then you would have to expect that they are also a large holder in which case a disclosure notice would need to have been tabled.
There has been none that I can see other than a buy in by Mr Mair and his associated companies. Surely this must mean that shares are just being traded internally around the large nominee companies and those entities making up the nominee companies are simply trading amongst themselves.
I suspect that some of these entities are funds management groups who are getting close to breaching their mandates and need to get out quickly. The quicker that process needs to be the more they become price takers. On the other hand other groups within the same nominee group are happy to take these shares at a discounted price of course, hence the slow decline and stability around 60c which appears to be a price the seller can live with and the buyer can get great value out of.
lets hope that if this scenario is correct then the seller pulling the expoure to ATM back to within mandated guidelines is over soon.
If this was the case then the price has nothing to do with fundamentals which is why it is all very puzzling IMO to those who see enormous potential going forward.

Volume over the last six months by month have been 24 million in April then 32 million, 51 million, 21 million, 21 million and then 25 million in September

So 174 million over the last six months - about 26% of issued shares. No question this a lot of volume going through as the price goes down (esp seeing you guys tell me a large proportion is tightly held)

You should ask Hoop to do an OBV line for you and explain what it means

So punters have sold 174 million but then again punters have bought 174 million but then again there may be one or two who have both bought and sold.

Harrie - I feel you look at the trading screen far too often and are seeing things that aren't there and getting yourself in an unnecessary tiz.You appear to be in for the long haul and believe the story. Forget the minute by minute gyrations of the market and enjoy life - what is happening is how markets work, nothing else.

If you honestly think there is manipulation or underhand things going on you should SELL now, ordinary folk are generally the losers when this happens

MAC will tell you that price eventually catches up with value (or something like that) - if you believe value is a lot higher than 59 then just waot for the price to 'correct' itself.

Promise?

[airedale]

A plausible theory which was aired at the Christchurch ST Meeting last night, Some one or some body is enthusiastically shorting the stock. So eventually that must end.

[janner]

Have called into the Mt Wellington Countdown for past 5 days in a row.. At differing times..

No A2 !!!!..

Have sent email to Countdown asking if it is a discontinued line .

[percy]

Have called into the Mt Wellington Countdown for past 5 days in a row.. At differing times..

No A2 !!!!..

Have sent email to Countdown asking if it is a discontinued line .

Janner do a "Percy" and ring them 255 2449. They love hearing from customers.I usually ask for the manager.!Get the manager's name first of all.!
Ask him/she/it if they are customer focused? Certainly letting you down.Would they kindly ring you when they have stock!

[see weed]

Have called into the Mt Wellington Countdown for past 5 days in a row.. At differing times..

No A2 !!!!..

Have sent email to Countdown asking if it is a discontinued line .

I buy a2 at Mt. Wellington, Pakuranga, Greenlane & Onehunga, but you should phone first. You see, more people are drinking it now. Just finished half bottle tonight, with that Canterbury Cream stuff.

[Harrie]

Volume over the last six months by month have been 24 million in April then 32 million, 51 million, 21 million, 21 million and then 25 million in September

So 174 million over the last six months - about 26% of issued shares. No question this a lot of volume going through as the price goes down (esp seeing you guys tell me a large proportion is tightly held)

You should ask Hoop to do an OBV line for you and explain what it means

So punters have sold 174 million but then again punters have bought 174 million but then again there may be one or two who have both bought and sold.

Harrie - I feel you look at the trading screen far too often and are seeing things that aren't there and getting yourself in an unnecessary tiz.You appear to be in for the long haul and believe the story. Forget the minute by minute gyrations of the market and enjoy life - what is happening is how markets work, nothing else.

If you honestly think there is manipulation or underhand things going on you should SELL now, ordinary folk are generally the losers when this happens

MAC will tell you that price eventually catches up with value (or something like that) - if you believe value is a lot higher than 59 then just waot for the price to 'correct' itself.

Promise?

Thanks for that info W69, that is a lot more trades than I would have expected. That just intensifies my interest.
I don't subscribe to conspiracy theories and I certainly don't dwell on the trading screens. I'm finding however the pattern of trading quite fascinating purely from a curiosity point of view.
Given that I believe the stock is totally undervalued, I'm taxing my small mind about why anyone would want to sell and coming up with a few theories. I hope that in doing this that I am not being misinterpreted as believing there is something underhand going on or the stock is being manipulated in anyway. That's just the market.
If you listen to CNBC as I do from time to time large amounts of air time is taken up with different theories about why a stock or a market sector is selling off or gaining support. Its only a theory. Take from it what you will

[Hoop]

Volume over the last six months by month have been 24 million in April then 32 million, 51 million, 21 million, 21 million and then 25 million in September

So 174 million over the last six months - about 26% of issued shares. No question this a lot of volume going through as the price goes down (esp seeing you guys tell me a large proportion is tightly held)

You should ask Hoop to do an OBV line for you and explain what it means

So punters have sold 174 million but then again punters have bought 174 million but then again there may be one or two who have both bought and sold.

Harrie - I feel you look at the trading screen far too often and are seeing things that aren't there and getting yourself in an unnecessary tiz.You appear to be in for the long haul and believe the story. Forget the minute by minute gyrations of the market and enjoy life - what is happening is how markets work, nothing else.

If you honestly think there is manipulation or underhand things going on you should SELL now, ordinary folk are generally the losers when this happens

MAC will tell you that price eventually catches up with value (or something like that) - if you believe value is a lot higher than 59 then just waot for the price to 'correct' itself.

Promise?

zzzzzzzzzz:sleep:........snort:confused:...someone mentioned my name:mellow:....no buy signals...conspiracy??? really???....wake me up when something real happens....:sleep: zzzzzzzzzzzzzzzzz

[winner69]

Thanks for that info W69, that is a lot more trades than I would have expected. That just intensifies my interest.
I don't subscribe to conspiracy theories and I certainly don't dwell on the trading screens. I'm finding however the pattern of trading quite fascinating purely from a curiosity point of view.
Given that I believe the stock is totally undervalued, I'm taxing my small mind about why anyone would want to sell and coming up with a few theories. I hope that in doing this that I am not being misinterpreted as believing there is something underhand going on or the stock is being manipulated in anyway. That's just the market.
If you listen to CNBC as I do from time to time large amounts of air time is taken up with different theories about why a stock or a market sector is selling off or gaining support. Its only a theory. Take from it what you will

Mind you a few of the high volume days have been Milford SELLs whatever that indicates

[nextbigthing]

Mind you a few of the high volume days have been Milford SELLs whatever that indicates

How do you figure this Winner? No SSH to my notice other than them buying @75c

[Hoop]

zzzzzzzz:sleep:...poke poke:confused:..alright, lets have a look..

Medium range chart ..shows ATM topping out and firing sell signals at the end of March at about 90cents...Since then it has been Technical rubbish and should be avoided...Theres been periods of money flow distribution in other words investors have been selling down and that selling pressure is reflected by the weakening share price..
They say when using Money flow indicators you should never one in isolation ..as one can see on the chart the Chaikin indicator was pointing upwards but when used with Acc/disb and OBV this upward look is just a reduction of selling pressure pushing it into the +ve zone and is not a change to buying pressure..
http://i458.photobucket.com/albums/qq306/Hoop_1/ATM01102014.png (http://s458.photobucket.com/user/Hoop_1/media/ATM01102014.png.html)


When looking at a much shorter term 10 day chart with 5 minutes period...there isn't much here either...there is an accumulated buy pressure on Monday afternoon..which could indicate a large buyer but it didn't move the price around....from a quick glance there seems no out of the ordinary stuff.. no one buying/selling to push the price around (shake outs/fakeouts)....
Market theory says buyers increase the shareprice and as one can see this is also true with ATM ...but there's been a lack of buyers overall and as seen in the last two days those lack of buyers sees the shareprice weaken....so this shows normal market behaviour.

All rather boring really....

http://bigcharts.marketwatch.com/kaavio.Webhost/charts/big.chart?nosettings=1&symb=NZ%3aatm&uf=0&type=4&size=4&sid=1100647&style=320&freq=6&entitlementtoken=0c33378313484ba9b46b8e24ded87dd6&time=18&rand=1489555433&compidx=aaaaa%3a0&ma=5&maval=50%20200&lf=1&lf2=8&lf3=512&height=981&width=1045&mocktick=1

[winner69]

How do you figure this Winner? No SSH to my notice other than them buying @75c

They sold 6,500,000 on 23/4 and there was another sell of 5 million odd as well.

In the detail of the notices

Yes they have been buying more than selling but can't be doing their funds any good at the moment eh.

All a mystery to me at the moment ....just seems to be a long long downtrend

[winner69]

Apparently free float number of shares is 414 million

So 174 million volume over last six months is an annualised churn rate of 85%

Take into account that MAC et all aren't trading either maybe churn is close to annualised 100%

All the free float shares get churned once a year ......not much loyalty here?

Good or bad? I have no idea

[winner69]

Bugger those Death Crosses eh Hoop

Suppose we need to wait for the green line to cross the purple line on the way up before we start cheering

[Hoop]

Unusual numbered trades can be...
1...a seller sell all of their shares..which is in odd numbers and a buyer has bought that number
2...More than one buyer buying up a single seller round numbered trade
3...A buyer buying up whats left at the price they want

Small amounts
Usually the client sets the buy price ..as the market is a variable complete orders don't always happen at once..it may take days to fill an order..The client only pays the one fee on completion of the order or when the order expires...I have seen 1 share traded to complete an order..

Same amounts
This seems like a double up error..but there could be a rational answer..Maybe someone can tell us more about that (Silverlight?)

[see weed]

I have been putting a lot of thought into my ATM investment of late....... mainly because I don't mind cutting my losses on any investment and given ATM continue's to drift lower my losses are expanding.
However after looking at the basic's of the business and the continued raging debate about their product a few things jump out.
Revenue is double what it was 2-3 years ago(these are not small numbers), they have a strategy in place to take their product global albeit I don't agree with them trying to conker so many markets at once, the continued raging debate both negative and positive is all free marketing and exposure(any business in any sector would love to have so much free market exposure).
Yep they have made some BIG mistakes, looks like the Fresha deal in NZ is restraining sales and their first attempt at Europe was a flop......... but what company does not make mistakes.
The falling farm gate price of milk and falling kiwi $ is very positive for this company.
Like I say I have no trouble in cutting my losses (ave buy in 72cps) but after reviewing the investment I am not interested in selling even though I believe we may continue to drift lower.

keep the good work up seeweed.

Likewise here, but admit, got a bit nervous on 30/9/14 with all those little sell downs. Ended up selling 16% of my holding, for two reasons...1/ To get my average price down. 2. To get my average price down again when I buy back in.

[Harrie]

Trying to follow all these acromyms. SSH?

[stoploss]

Trying to follow all these acromyms. SSH?

https://www.nzx.com/files/documents/regulators/FMA/100_Financial%20Markets%20Authority%20review%20of% 20market%20disclosures%20FINAL.pdf

[winner69]

Substantial Security Holder notice

One discloses -

When you go over 5% of the shares in a company
When you go under 5% of the share in a company
When your substantial shareholding changes by 1% or more (increase or decrease)

[nextbigthing]

They sold 6,500,000 on 23/4 and there was another sell of 5 million odd as well.

In the detail of the notices

Yes they have been buying more than selling but can't be doing their funds any good at the moment eh.

All a mystery to me at the moment ....just seems to be a long long downtrend

As per this link;

https://www.nzx.com/markets/NZSX/securities/ATM/announcements

I can only find notices of Milford buying up large, not selling. Can you point me to it specifically?

Buying from 65,240,424 earlier in the year to 97,877,776 in July as per the annoucements below;

https://www.nzx.com/companies/ATM/announcements/249100
https://www.nzx.com/companies/ATM/announcements/252821

Their average buy in price must be pretty up there, perhaps 75c or so? They are still happily holding.

[winner69]

As per this link;

https://www.nzx.com/markets/NZSX/securities/ATM/announcements

I can only find notices of Milford buying up large, not selling. Can you point me to it specifically?

Buying from 65,240,424 earlier in the year to 97,877,776 in July as per the annoucements below;

https://www.nzx.com/companies/ATM/announcements/249100
https://www.nzx.com/companies/ATM/announcements/252821

Their average buy in price must be pretty up there, perhaps 75c or so? They are still happily holding.

in the detail this notice they sold 6,500,000 shares

https://www.nzx.com/files/attachments/195012.pdf

[nextbigthing]

Substantial Security Holder notice

One discloses -

When you go over 5% of the shares in a company
When you go under 5% of the share in a company
When your substantial shareholding changes by 1% or more (increase or decrease)

So this 1%, that's 1% of the total company, ie ATM has around 660000000 shares, so anyone would need to announce a change of 6.6m shares or more? (As opposed to the 1% relating to Milfords holding as it is over 5% - Ie 1% of Milfords holding if that makes sense?)

This seller keeps reloading approx 200000 shares each time they get taken out. This pattern has been occuring for a while suggesting it's the same broker due to the same pattern. However there hasn't been a SSH notice for a seller. That seems odd to me.

[NT001]

Thanks stoploss.

I found the section on the last page about fund managers interesting.

SSH disclosure by fund managers
Fund management companies trade frequently, acquiring and disposing of the same security for different underlying clients. As such, events requiring SSH disclosure can be the result of numerous transactions carried out across a period of time, and sometimes across numerous accounts.
FMA’s expectation is that fund managers should ensure that reconciliation of total holdings is carried out with sufficient frequency, to enable identification and disclosure of movements in substantial holdings requiring disclosure immediately that those movements occur.

[winner69]

So this 1%, that's 1% of the total company, ie ATM has around 660000000 shares, so anyone would need to announce a change of 6.6m shares or more? (As opposed to the 1% relating to Milfords holding as it is over 5% - Ie 1% of Milfords holding if that makes sense?)

This seller keeps reloading approx 200000 shares each time they get taken out. This pattern has been occuring for a while suggesting it's the same broker due to the same pattern. However there hasn't been a SSH notice for a seller. That seems odd to me.

A seller would only need to disclose such sales if they already held over 5% of the shares. Under 5% no SSH disclosures needed

Plenty of churn eh

[nextbigthing]

How bizzare of Milford to buy 32,637,352 shares over a period of time but sell 6,500,00 in the middle of that process. They were buying at 85c just prior to the sell at 81.6c then were continuing to buy at 80c afterwards so it was hardly a sneaky profit taking trade. Perhaps a requirement to rebalance one of the funds?

Anyway, nice to know Milford are sitting on 32mil shares that cost over 80 cents a pop (on top of the rest of their holding). Thanks for that link Winner.

[percy]

[QUOTE=Snoopy;509381]You misunderstood what I was telling you about HNZ. There was serious risk in the share at the time it was trading at 60c, because of the non core property portfolio. Much of this risk has since been sorted. You might say by the skill of management. I might say by the pure luck of having a much stronger property market nationally than anyone envisaged. The truth is probably in the middle. Given the risk was sorted and the share price jumped so much to $1 is proof of how big a risk really was when the share was trading at 60c.

There was no luck involved.
Directors/management [very skilled people] told shareholders what the position was,what they would achieve. taking account their view of an improving property market.
Anyone who had either attended Heartland's agms,or read their updates would have been aware of the situation.
Any risk was minimal, as I open pointed out at the time.

[NT001]

Thanks Winner

Is there any update available?

[Jasemc]

sellers cleared out to 60 cents see what gets dropped at 59.

[see weed]

sellers cleared out to 60 cents see what gets dropped at 59.

One buyer, 295,000 at 59c, 165,000 sellers at 60c . Come back 1 hour later 58c--59c . 295,000 gone. Still a bit of selling pressure.

[see weed]

Every morning when I have a2 on my Wheet Bix and Sultana Bran, it reminds me why we have shares in this company.

[see weed]

I see the milk wars are still raging. First thing you see when you google a2, they now have a video clip, milk matchup on 'A Current Affair' , claiming there is no advantage of drinking a2:mellow:........................ Update, just had another look half an hour later, and it has disappeared.

[Harrie]

The FMA guidelines seem pretty clear about disclosure when an entity hold more than 5% and there is a change by 1% or more either way.
In fact they seem to make a fairly big point of ensuring that directors and officers are aware of these mandatory obligations to the extent that fines for non disclosure in a timely manner are able to be imposed.
Thanks for all that info on SSH W69, There are a couple of things someone may be able to answer:
What was asked by NBT regarding the 1% i'm not sure has been clarified. Is this a change of 1% of the companies shares, or a change of 1% in the holdings of a particular entity. The two are quite different in outcome as far as the SSH rules apply.
Secondly, the FMA seem a bit vague on what constitutes SSH "disclosure in a timely manner" There is some reference to 5 working days but not sure if that clause applies to the 1% change in SSH?

[winner69]

The FMA guidelines seem pretty clear about disclosure when an entity hold more than 5% and there is a change by 1% or more either way.
In fact they seem to make a fairly big point of ensuring that directors and officers are aware of these mandatory obligations to the extent that fines for non disclosure in a timely manner are able to be imposed.
Thanks for all that info on SSH W69, There are a couple of things someone may be able to answer:
What was asked by NBT regarding the 1% i'm not sure has been clarified. Is this a change of 1% of the companies shares, or a change of 1% in the holdings of a particular entity. The two are quite different in outcome as far as the SSH rules apply.
Secondly, the FMA seem a bit vague on what constitutes SSH "disclosure in a timely manner" There is some reference to 5 working days but not sure if that clause applies to the 1% change in SSH?

The 1% and the 5% is of the total shares of the company on issue - in ATM case 1% or 5% of 660 million shares

[winner69]

The other part of the question harrie

(Quote) The disclosure must be given as soon as the person knows, or ought to know, that the person has the substantial holding

Here is your homework for the weekend .....exam on Monday

Answers all your questions

http://www.legislation.govt.nz/act/public/1988/0234/latest/DLM139727.html

[nextbigthing]

The 1% and the 5% is of the total shares of the company on issue - in ATM case 1% or 5% of 660 million shares

So if the holder has over 5% then they can only buy or sell 6.6m shares (660,000,000 x 0.01) before having to issue a notice. That sort of volume has gone through in just a few days as of recent, yet no notice. So I guess this leaves a few options - the seller is under 5% and will run out of shares soon enough, or the buyer and seller is the same person (or holding company/broker buying and selling to its own clients), or everybody is spooking everybody into selling off small amounts which combined is adding up.

[Fisherking]

So if the holder has over 5% then they can only buy or sell 6.6m shares (660,000,000 x 0.01) before having to issue a notice. That sort of volume has gone through in just a few days as of recent, yet no notice. So I guess this leaves a few options - the seller is under 5% and will run out of shares soon enough, or the buyer and seller is the same person (or holding company/broker buying and selling to its own clients), or everybody is spooking everybody into selling off small amounts which combined is adding up.

I think that with the volume of shares that have traded in the past 4 odd months we can safely say there is no single seller reducing their shareholding. I also think that if the buyer and seller were the same person the actions would largely offset themselves.

[MAC]

Shorting - you "borrow" the shares from a super fund, then sell them on market. With sufficient volume you can independently drive the price down, at which point you buy them back and "return" them. Then you repeat the play. This can go on forever, at least until a buyer other than the shorter steps in to buy up the shares and pushing the price higher, ending the shorting party. Selling "borrowed" shares does not require a SSH notice as the owner hasnt sold them, and the buyer hasnt kept them. Who's doing it? Who knows. Maybe a dairy company with deep pockets who is more than a little pissed off with A2 right now, and wants to restrict their access to future capital?

ATM don't require further capital for the medium term, they've $16M in cash and intend to finance the US entry from three consecutive years of sacrificed EBIT and internal holdings.

I remain sceptical of conspiracy theories in general, but the most feasible of those kicking about perhaps is your short seller KW positioning for a large holding or as a longer shot a takeover.

Somebody out there knows though, what really surpries me is that all you normally curious traders haven’t customarily flushed out who from chatty brokers or IRESS ?

[see weed]

Substantial sec. hold. As at 4/9/14..... Fre. Foods=117,878,629...17.86%, Mil. Ass. Man=97,877,776...14.83%, Mount. Road. Invest.=57,558,701...8.72%, AMP Cap=51,385,948...7.78%, NZ Sup=39,798,527...6.03%.

[baller18]

This is a bit off topic, but has anyone tried the lewis road whittaker chocolate milk? $6.50 for 750ml though!

[see weed]

This is a bit off topic, but has anyone tried the lewis road whittaker chocolate milk? $6.50 for 750ml though!

No. I can get $4.90 2lt. a2 and add my own chocolate or milo, a lot cheaper and healther .:)

[Harrie]

Shorting - you "borrow" the shares from a super fund, then sell them on market. With sufficient volume you can independently drive the price down, at which point you buy them back and "return" them. Then you repeat the play. This can go on forever, at least until a buyer other than the shorter steps in to buy up the shares and pushing the price higher, ending the shorting party. Selling "borrowed" shares does not require a SSH notice as the owner hasnt sold them, and the buyer hasnt kept them. Who's doing it? Who knows. Maybe a dairy company with deep pockets who is more than a little pissed off with A2 right now, and wants to restrict their access to future capital?

There could only be one reason that anyone would want to do that, and that's to make a take over bid.
If a fund manager was to "lend" a bunch of shares to another entity then not much point in that unless there is a riskless premium involved. eg: at a MP of 0.63 enter into a contract to "repay" at a price of 0.65 sometime into the future. Fund manager books an immediate profit of 2c per share.
So the "borrowed" shares are used for the sole purpose of screwing the SP down to where there is building resistance. Lets say that is 55c. That's a loss of 10c per share at the end of the contract, not very smart unless you are intending to make an offer on a substantial number more shares at a price of 10c lower than would otherwise be the case eh!
IMO, with the risk associated with that strategy, I don't buy it.

[NT001]

I'm pleased to see some people who know a lot more than I do about how the market works seem to share my suspicions now. The descriptions of shorting do seem to fit in with the way ATM shares have been dribbled into the market, rather than offered as a substantial block. You wouldn't need to deploy very many shares to use this method, and probably wouldn't even have to borrow from a big holder. As I suggested some weeks ago, it still seems to point to a takeover. However at this stage I'm somewhat comforted by Snapiti's advice that "as an investor in ATM I am not concerned at all about this...... I have watched many stocks have their share price manipulated by big players. Experience says no need to worry or panic."

[Harrie]

I think you should do your homework on how shorting works.......
Shorting happens all day every day (not so much on the NZX).
Stocks are shorted to make a profit and not for takeover purposes(although I am sure this does happen).
Some US stocks have 30% of their shares in short plays.
ATM is a perfect stock to short as it has difficult fundamentals to value therefore putting a floor under the share price.
The trading pattern most certainly indicates someone has shorted the stock and is doing a good job of driving the price down. Annoying as it is large players are constantly using their position to sniff out opportunities like this. I am a little jealous.
As an investor in ATM I am not concerned at all about this...... I have watch many stocks have there share price manipulated by big players. Experience says no need to worry or panic.

I agree with you KW it would be nice to have the shorts openly reported like they do on overseas markets.

I'm not sure how you have interpreted what I have said in response to KW as not understanding how "shorting the market" works. It would be fair to say that having worked in the futures market some time ago, I think I would qualify as having some experience around the topic.
My response to KW was to use his terminology as one way in which a "short" could possibly work, and on the scenario KW set out I doubted that any one would undertake that high risk strategy. I'm not sure that I have heard of shares being "borrowed" but I could see a strategy where a contract could be arranged whereby shares were allocated to a buyer on the basis that they were returned at a higher price. Useful for a fund Manager because they could immediately book a locked in "spread"
Having said this , a strategy such as this is possible but I'm not aware of this practise because the only reason that anyone would do this as I have said is to manipulate the share price down and hope that what is lost is more than made up on the takeover bid.
There is off course, if we want to get into all the machinations of strategy, the possibility that the borrower could adopt the above strategy at the same time as writing a "put" option with another party as a hedge........another one for you to explain snapiti?


I'm not sure if any of the above strategies are legal in NZ anyway, and I don't really think ATM is big enough. To be honest I agree with the others that none of this is really relevant to long term holders, but it does provide some intrigue of what may be going on behind ATM's shareholding irregularities.

[Hoop]

I think that with the volume of shares that have traded in the past 4 odd months we can safely say there is no single seller reducing their shareholding. I also think that if the buyer and seller were the same person the actions would largely offset themselves.

Ummm...you have lost me with your logic Fisherking :confused:..
4 months ago ATM was 79c now 59c

[nextbigthing]

Thanks KW some great info there.

I've emailed the company to see if they would like to comment however as of yet no reply, I think I read somewhere that getting back to people isn't their best attribute. I shall let you all know if I get a reply.

A few weeks ago I had a terrible case of man flu and whilst bedridden narrowly avoiding death was able to watch the volume closely. It was a very consistent pattern of selling, 3-9 sell orders for about 150-250 thousand shares reloaded each time after it got taken out and dropping a cent each day or so. That same pattern is still continuing more or less. That to me suggests the same broker/seller. With decent volume and no SSH then to me that really suggests what KW is saying, shorting.

Why short it? Well it could be just to make money in which case we don't have to fret as ride it out and it will return to a fair value. But as someone else has suggested, what's all this IP worth to the like of Nestle or one of the really big food companies? More than the market cap of ATM nowadays? Probably IMHO. Especially if you knock a huge whack off that mcap by shorting.

Please understand I'm just hypothesizing here. Don't take it as gospel.

[winner69]

Thanks KW some great info there.

I've emailed the company to see if they would like to comment however as of yet no reply, I think I read somewhere that getting back to people isn't their best attribute. I shall let you all know if I get a reply.

A few weeks ago I had a terrible case of man flu and whilst bedridden narrowly avoiding death was able to watch the volume closely. It was a very consistent pattern of selling, 3-9 sell orders for about 150-250 thousand shares reloaded each time after it got taken out and dropping a cent each day or so. That same pattern is still continuing more or less. That to me suggests the same broker/seller. With decent volume and no SSH then to me that really suggests what KW is saying, shorting.

Why short it? Well it could be just to make money in which case we don't have to fret as ride it out and it will return to a fair value. But as someone else has suggested, what's all this IP worth to the like of Nestle or one of the really big food companies? More than the market cap of ATM nowadays? Probably IMHO. Especially if you knock a huge whack off that mcap by shorting.

Please understand I'm just hypothesizing here. Don't take it as gospel.

If the shorting being done to make money (not setting up an acquisition) then this headline would be very bad news for the shorters

Nestle make bid for A2 Milk at $2 a share

[MAC]

They have been very quiet of late too, they could have announced the Synlait registration especially after having said this in the FY14 report;

“there have been changes to access arrangements for imported infant formula including a requirement for manufacturing companies and brands to achieve a new form of registration from May 2014. Whilst we believe this approach should ultimately be positive for quality producers, the short term impact of these changes has brought uncertainty into the market which has impacted many participants including a2MC”

It would also have been a positive matter to have announced the magnitude of the fledgling fresh milk airfreight market into Asia which could be substantial, as big as infant formula, yet nothing but silence, well aside from a slip of back door outlook information to the press.

Why should they have suddenly become shrinking violets, not like ATM at all ?

[Jasemc]

Not sure they have suddenly become shrinking violets. They seem to release very little warm fuzzy news. If you want to punt assume at the agm they will announce USA and other great news. So buy 40million shares and sell after agm and retire.

[NT001]

They have been very quiet of late too, they could have announced the Synlait registration. ... Why should they have suddenly become shrinking violets, not like ATM at all ?

I agree MAC, the company and its top shareholders seem surprisingly unperturbed by the manipulated fall in share price, and could have done more about it. From what I've been reading, shorting can be hazardous, especially if a big buyer enters the market to scoop up the shares when they've become depressed and starts pushing them up again, or if good news is announced that pushes demand for the shares up. The latter could easily have happened but hasn't. Mountain Road and Freedom Foods which control the company own almost 30% of the shares so they have a lot at stake, and presumably know more about what's going on than we do.

That said, A2MC's PR has never been nearly as active and informative as it could/should be, which I find strange and somewhat worrying. For example it does not reply to blatantly misleading statements by mainstream dairy or by self-proclaimed experts. The company's overall strategy has been to not antagonise mainstream dairy and the health-claims regulators too much, which may have been sensible in the past. But I think the anecdotal and scientific evidence in favour of A2 (and against A1) is now so strong that the company should get a bit bolder and more proactive in educating the public, bearing in mind that its patents don't last for ever.

[stoploss]

In order to short a stock, that is selling a share you do not own, you have to "borrow" the shares from someone who does own them, so that you can deliver them to the buyer. EVERY SHORT SELLER MUST BORROW THE SHARES. This is called a Covered Short, and is the only way you can short stocks since the post GFC regulations made Naked Shorts (selling a share and buying it back before delivery of the original sold shares can be made) illegal.
It is of course legal everywhere since it is a basic part of the market mechanics.

the shares are not returned to the lender at a higher price, the lender simply gets interest on the value of the shares loaned for so long as the short seller of them takes before buying them back and returning them. This is usually a short period of time, as if the share price is falling, you pay back the "loan" and borrow them again at the cheaper market price.

I can make the shares i own available through my broker to cover short sellers. Its not just fund managers who can do it, anyone can. If one were planning on holding shares through a correction, its an easy way to make money (assuming that the share price will eventually recover and you arent contributing to your own loss of capital)

"Easy way to make money " That's what the clients of OPUS prime thought over the GFC...........

[MAC]

It was more perhaps a question to others as to whether companies in general go quiet when in discussion with large investing interests ?.

I’ve booked flights for the AGM , it’s typically my only annual reason to have to go Auckland, would prefer they had the AGM’s in Sydney actually, perhaps though we’ll find out more from chit chat over the usual ubiquitous plastic cup of fresh a2.

[nextbigthing]

I was at a buffet breakfast the other day with a few colleagues. I noticed almost all of them tucking into the gluten free cereal/fruit/whatever mix. So I asked them, are you gluten intolerant? No they all replied. So why are you eating gluten free cereal? No one had an answer and they looked around awkwardly. But the answer is this. They perceive they're getting some benefit because this cereal is 'special' regardless of whether they need it or it actually works.
I believe the same goes for A2. Regardless of whether people need it, they will buy it for its perceived benefit. This is why the Aussie market has done so well. The Chinese are obviously right into getting health benefits from what they intake so I think the fresh milk will do well there if executed correctly. And the market there is huge. Onwards and upwards.

[mattwanz]

A bit slower today with Labour day holiday in most states of Australia.......hmmmm

[MAC]

Seems to be a bit of a pick up in interest since ATM launched their online marketing campaign in the UK.

http://www.google.co.nz/trends/explore#q=%22a2%20milk%22&geo=GB&date=1%2F2014%209m&cmpt=q

I’m not sure that google trends really constitutes a market survey, but maybe it reflects some level of online familiarisation being done by prospective customers ?

[NT001]

I was at a buffet breakfast the other day with a few colleagues. I noticed almost all of them tucking into the gluten free cereal/fruit/whatever mix. So I asked them, are you gluten intolerant? No they all replied. So why are you eating gluten free cereal? No one had an answer .


Interesting observation. But is there a connection between a gluten-free diet and A1/A2 milk?. Yes, there is. So were those guys getting stuck in to the gluten-free cereal pouring A1 milk onto it? Silly fellows.

Fewer than 1 percent of people worldwide suffer from coeliac dissase which requires its sufferers to eat gluten-free, yet there's huge emphasis on gluten-free these days. A lot of others seem to think it's trendy or heathy, although in fact most people can handle perfectly well the gluten that comes from wheat and some similar grains.

Coeliac disease damages the gut lining and makes it easier for the dangerous BCM7 peptide produced by A1 milk ("the devil in milk") to get into the bloodstream and from there to the brain where it is believed to be a causal factor in some neurological diseases such as schizophrenia. Such conditions are considerably more common among sufferers of coeliac disease, so logic suggests that sufferers of coeliac disease, who really need a gluten-free diet, would be very well advised to stick to A2 milk.

[axe]

It's not just Coeliacs sufferers who go gluten free.
People with IBS will generally go GF, and some IBS sufferers also go dairy free. I have been wondering whether the IBS people who go dairy free are just intolerant to the A1, and would be fine with A2 products.

There is a lot individual personal feedback (heresay?) out there on the internet with regards to A2/A1 and IBS and a whole raft of issues, but I haven't been able to find decent scientific medical studies that confirm anything.

I am strongly considering adding ATM to my portfolio, but I will not buy into a downtrend like this at this point in time. Somehow it still seems over valued.

[NT001]

It's not just Coeliacs sufferers who go gluten free.

You're right, Axe, but as you say there's very little science on the IBS-BCM7 connection as yet, although IBS sufferers are drawing connections. It'll probably be quite a while before anyone can get funds for a double-blind clinical human study on it, but the anecdotal record and logic both point to there being a likely connection. Among the sites I've seen that do mention it is

http://fedup.com.au/factsheets/symptom-factsheets/irritable-bowel-symptoms-ibs

[see weed]

It was more perhaps a question to others as to whether companies in general go quiet when in discussion with large investing interests ?.

I’ve booked flights for the AGM , it’s typically my only annual reason to have to go Auckland, would prefer they had the AGM’s in Sydney actually, perhaps though we’ll find out more from chit chat over the usual ubiquitous plastic cup of fresh a2.

Might see you there MAC

[Harrie]

It surprise's me greatly you have never heard the word borrowing when it come's to shorting stocks as that is a fairly mainstream terminology.
As for puts I have dabbled with those in the US market and my terminology for them is either insurance or leverage/gearing depending on the play.
One thing is for sure the end result can be very volatile.... massive gains or loss the lot is more often the outcome. A bit too risky for snaps these days.
I suggest those wanting to learn more about the put options search it on the internet and watch fast money on the CNBC channel.....our time about 9-10 am in the morning..... great show channel 91 on sky tv

Obviously been out of the futures market too long snapiti. Back then there was only one way to short and that was what KW termed as a "naked short"
Still cant't see though why instead of paying "interest" on the borrowed shares cannot be converted to a pay back "price" ie borrow at a price of 65c and pay back at a price of 67c. included in that transaction is the cost of "Borrowing" eg 6500000 shares at 0.65 is a "cost" of $4225000. There would need to be a time limit on the borrowed shares but lets say that is 3 months. At a price of 67c that would convert to $4355000, so effectively the borrower pays the lender $130k = $12.30% annualised return. Its all semantics I suppose, but that was what I thought could be a way of structuring a contract.
The whole idea of using this methodolgy is a moot point, because I think we all struggle with the motives behind that manipulation, if it indeed exists.

MAC, hope you have a pleasant trip to the AGM and come back with lots of intriguing insights!. I think that the question you posed about the fact that no announcements being made, could well point to discussions with another party. The other party would insist on no information being released to the market while negotiations were being undertaken with ATM, otherwise it queers their pitch.

[NT001]

Fascinating piece by Keith Woodford in the latest Sunday Star-Times and on his own blogsite about the very significant self-imposed limitations under which NZ's export dairy industry has chosen to operate. The article does not appear to have much direct bearing on A2MC but does provide background on some important aspects of dairy economics that are not generally well understood.

http://keithwoodford.wordpress.com/2014/10/07/the-challenges-of-dairy-seasonality/#more-1153

[mayday]

A2 Platinum's official website for Chinese parents to purchase at, Stage 1 is retailed NZD95.00 (approx.) per 900g tin.

http://a2nutrition.tmall.com/shop/view_shop.htm?shop_id=107020628

PS. Tmail is owned by Alibaba

[NT001]

Keith Woodford has just released two very interesting articles that greatly illuminate the global dairy market, especially China's. Neither of them specifically mentions A2 but there's a lot of information that helps understand A2MC's global strategy. The two articles connect together rather well. The first is about how well placed Australia is to exploit the Chinese market.

http://keithwoodford.wordpress.com/2014/10/08/with-a-free-trade-deal-australia-can-win-chinas-dairy-market/#more-1156

The second article contains information not generally appreciated by those outside the industry about the self-imposed restrictions under which Fonterra operates in the global market. Of course A2 is not bound by these Fonterra-created restrictions but they're worth knowing about and understanding, as are the general advantages that the dairy industries of Australia and the US enjoy in comparison to NZ.

http://keithwoodford.wordpress.com/2014/10/07/the-challenges-of-dairy-seasonality/

[see weed]

All quiet around here lately. Is this what you call " A slow boat to China"? Sp. around 58c to 60c going on 4 weeks now. Someone is holding sp at 60c, and could be buying more at 58-59c. Who knows? Wake me up when the wind picks up.

[NT001]

I know the owner of Fresh Choice. May have a word in his ear. ;)

If you're still following this thread, Tsuba, I'd be interested in knowing whether you took up the issue of A2 supplies with Fresh Choice in Queenstown. My daughter and family are moving to Alexandra where I doubt it would be available, but they'll be in Q'town quite often. Any luck?

[dingoNZ]

Was unable to find any in Countdown in Wellington (Newtown) today, slightly disappointed to be honest.

[see weed]

Was unable to find any in Countdown in Wellington (Newtown) today, slightly disappointed to be honest.

We are lucky up here in Auck. I got 4 Countdowns within 2 or 4 km. from my place. Just ph. them up to see who has it. But I do get the feeling they only deliver once a week. The BB date is normally about 13 to 14 days. Talked to my 3rd cousin on Sat, who lives in Sydney and knows all about a2, as it is more known about over there, probably advertised over there a lot more than here.

[NT001]

Was unable to find any in Countdown in Wellington (Newtown) today, slightly disappointed to be honest.

Can happen, specially on Sundays, although I've found most of the Countdowns in Wellington (Newtown, Karori, Crofton Downs, Johnsonville and Kilbirnie) well stocked lately. We have a big extended family at present including grandkids we insist on being given A2-only, and the checkouts stare at us a bit when we buy four at a time, and sometimes ask us why. But now half the family are moving to Central Otago and I suspect won't be able to get A2, at least for a while.

Fortunately the kids are over 2 years, and it's the first couple of years that are particularly critical medically. Young infants have permeable intestines ("leaky guts") to allow certain essential nutrients to pass through into the bloodstream, which also opens the door to the dangerous BCM7 peptide yielded by A1 milk. Once the gut naturally seals up (for most people but not all) the risk is diminished.

[nextbigthing]

Opening trade a whopping total of three shares pushing the price back up to 59c.
Now try and tell me the price isn't being manipulated.

[NT001]

Opening trade a whopping total of three shares pushing the price back up to 59c. Now try and tell me the price isn't being manipulated.

Just been chatting with my broker, who says there does appear to be a big seller who is not up to any hanky-panky but is trying to ensure he/she gets a minimum of around 59-60c and is controlling the flow accordingly but will at some stage disappear. And meanwhile there are buyers who see that there are plenty of shares available at that price so why push the price up? Regarding the 3 shares at today's opening he thinks it's just someone filling an order to bring their holding up to a nice round 10,000 or so, and said the first trade for NZX today was similarly for just four shares. I told him that some of my mates are suspicious and wonder whether a T/O is in the works. His advice was to watch for any movements and declarations among the bigger shareholders. I'm personally not able to assess the credibilirty of all this, just passing on what he said.

[Harrie]

How hard would it need to be to pay a bunch of people in the UK who consider themselves to be lactose intolerent to be part of a controlled study, to analyse whether A2 milk intake makes any difference. From my reading it appears that the supposed intolerance is more to do with the BCM7 peptide than the lactose, and in one comment I read it assumed that of the 20% who consider themselves lactose intolerent up to 75% of those may be intolerent to factors not associated to the lactose element at all! Does anyone have any further information on this?

[NT001]

How hard would it need to be to pay a bunch of people in the UK who consider themselves to be lactose intolerent to be part of a controlled study, to analyse whether A2 milk intake makes any difference.

You are spot on, except that you can't PAY people to be part of a trial. But trials are expensive and have to be paid for. At present the problem is that A2 Milk are the only people willing to fund scientifically sound trials, but these then get criticised by mainstream dairy and their stooges like Rosemarty Stanton on the grounds that they are funded by A2MC and therefore not convincing. There's no scientific argument about the facts - which are indisputable - just stupid suggestions that the facts are "not convincing in my opinion". Fonterra and NZG (Food Safety etc) won't touch this subject with a barge pole because despite repeated advice that there should be more funded research into it, they know what the results will be, and their first loyalty is to the NZ commercially-driven economy (ie dairy industry export receipts), not to consumer safety or scientific truth. You won't see Fonterra publicly disputing the mounting scientific evidence against A1 - it knows where the truth lies, so just remains silent. It's going to be a long ride because of the power of Fonterra, DairyUK etc, but eventually we'll get there, and they'll be singing our song.

[MAC]

I would agree with that Black Knat, it is clinical trials that health professionals have to trust and rely on.

Most clinical trials are funded by the company producing the product, whether it is drugs, or medical devices or milk, nobody should have any issue with ATM funding trials.

I personally though don’t think it is in the interests of ATM to actually do them, they don’t need to perform trials as unlike with medical products, the public are capable of trying and testing a2 milk for themselves and will continue buying or otherwise at their own discretion based on their perception of results.

In performing large trials ATM would be taking the A1 milk companies on head on, sometimes that can be a successful marketing strategy, but I don’t believe ATM are big enough yet to see that through, perhaps once they have a good solid foothold in Europe and the US in a several year’s time.

Until then debate on the matter is king and the more of it the better.

Debate >> Awareness >> Sales

[NT001]

This statement is simply false - as has been discussed before.

I do accept that a significant portion of Australians are prepared to pay extra for a2 milk, even without an established benefit accepted by mainstream health professionals. But that's Australians for you. Australians do have a slightly different cultural approach to NZ, and some other nations. In my observation there is quite a significant suspicion of doctors and science generally - we have that too - but perhaps to a lesser extent.

It's easy to say Australians are culturally crazy and prepared to pay ridiculous amounts for their milk for no valid reason, and to say "there is quite a significant suspicion of doctors and science generally" (about A1-A2).

But can anyone actually cite any "mainstream health professional" who advances scientific evidence rather than mere "suspicion" to try to cast doubt on the many clinical and other trials being published in peer-reviewed journals that show the A1-yielded peptide BCM7 is linked to health problems including digestive discomfort, autism and probably other wider human health issues?

Where are the scientific trials that produce evidence in rebuttal? There aren't any. Where are the statements by reputable scientists showing these trials to be producing false results? There aren't any. The only put-downs we see are from people who are not scientifically qualified in this specialist area and who distort the results in order to criticise them. Where are the responses from the "mainstream" dairy industry scientists with all their scientific resources showing fault with the "devil in the milk" thesis? There aren't any. They remain silent, and let PR agencies and suchlike commenters put out flawed and often scientifically absurd arguments on their behalf.

It is certainly true that "doctors and science generally" are slow to buy the A2 argument because it's a pretty big thing for them to swallow and it's complicated and they don't have time to read up on the facts and they prefer to accept the official line put out by the Food Safety Authority a decade ago when there was far less scientific evidence available and is now totally out of date but is still carried as gospel on its website.

When we have dozens of scientific papers pointing in one direction and not a single one rebutting them, are we to really put our faith in the views of those who just say they are not yet convinced? I'm still waiting to see a scientific paper that actually rebuts the A1-A2 argument.

[MAC]

Just been chatting with my broker, who says there does appear to be a big seller who is not up to any hanky-panky but is trying to ensure he/she gets a minimum of around 59-60c and is controlling the flow accordingly but will at some stage disappear. And meanwhile there are buyers who see that there are plenty of shares available at that price so why push the price up? Regarding the 3 shares at today's opening he thinks it's just someone filling an order to bring their holding up to a nice round 10,000 or so, and said the first trade for NZX today was similarly for just four shares. I told him that some of my mates are suspicious and wonder whether a T/O is in the works. His advice was to watch for any movements and declarations among the bigger shareholders. I'm personally not able to assess the credibilirty of all this, just passing on what he said.

Was there any inclination as to whom NT, just as a matter of idle curiosity ?

[nextbigthing]

Round figures.

660m shares total x 0.05 (disclosure threshold) = 33m shares. Ie someone can sell up to 33m shares with no disclosure.

Average volume 500000 shares a day (conservative - easily doing this).

33m / 0.5m per day = 66 days.

How long has this selling been going on for? A while! Therefore, THE END IS NIGH :eek2:

[Harrie]

I'm not convinced MAC that clinical trials will prove much more than reaffirm the findings of human trials undertaken recently. There is still not a strong enough scientific correlation between A1 and all the alleged downsides that emanate from it.
Its all too long term to draw any immediate conclusions from the science.
What I think is far more relevant and especially in the UK is the immediate positive impact for ATM of conducting more of a trial for those who suffer from lactose intolerance.
This does not need to be scientific in terms of measuring stool consistency, bloating and the like, it just needs to be scientifically arranged as a professional study. Did A2 milk cause an adverse reaction. Did A1 cause an adverse reaction. Simple.
If the report I read NT is anything to go by then 75% of those who consider themselves lactose intolerant would benefit, and that represents about 15% of the total UK milk market.
This way you take the heat out of the A1 A2 debate in a different way. Commentators would not be able to deny the facts if in fact there was no reaction to A2 milk from those who originally thought that they were lactose intolerant.

[dingoNZ]

Round figures.

660m shares total x 0.05 (disclosure threshold) = 33m shares. Ie someone can sell up to 33m shares with no disclosure.

Average volume 500000 shares a day (conservative - easily doing this).

33m / 0.5m per day = 66 days.

How long has this selling been going on for? A while! Therefore, THE END IS NIGH :eek2:

Assuming there is only one seller

[Harrie]

Round figures.

660m shares total x 0.05 (disclosure threshold) = 33m shares. Ie someone can sell up to 33m shares with no disclosure.

Average volume 500000 shares a day (conservative - easily doing this).

33m / 0.5m per day = 66 days.

How long has this selling been going on for? A while! Therefore, THE END IS NIGH :eek2:

My understanding NBT is that once you achieve a 5% holding then its a change of 1% of total holding that needs to be reported. That's 6.6 million shares not 33m shares.(may need to be corrected on that)
What I am more unsure about is the time frame of when more or less than 1% change is required to be reported by those holding over 5%.

Assuming I am correct with the 1% reporting threshold then has there been a big change in shareholding not yet reported, or are there lots of less than 1% shareholdings among the bigger players who hold over 5% changing hands, or are there lots of less than 5% shareholders selling, or is there lots of selling and buying back going on with the same shareholder, or is someone manipulating the SP somehow through derivatives, or what?

[NT001]

It is not correct to dismiss the research studies as "inconclusive". They each relate to specific aspects of the A1 problem, and many are "conclusive". None of them purports to be conclusive about the totality of the entire debate, which would be expecting too much. But many are conclusive insofar as particular details are concerned, while others say there is evidence pointing to certain conclusions that have yet to be tested. They are all subject to scientific challenge if someone would like to challenge them, that's fine, but they are not being challenged.

There is no challenge, no debate, no dispute, about the fact that A1 milk yields the BCM7 peptide which can get into the bloodstream and can reach the brain and is linked with certain human health problems. Some people may say they remain to be convinced. That's fine, but no one is putting up evidence that it's incorrect. That doesn't necessarily have to be just because of a worldwide dairy industry conspiracy (although one can certainly surmise that such exists), it can easily be explained by laziness, ignorance or any number of other reasons.

A health benefit can be established by scientific findings, and can exist regardless of whether "mainstream health professionals" or anyone else happen to find it "convincing". Some of the health benefits are already established. To be aware of and draw attention to such scientific research is neither "unmeasured" (whatever that means) nor ignorant. The charge of ignorance can be better laid at those who dismiss the scientific findings but cannot put up any argument against them.

[NT001]

You clearly do not understand anything about scientific method. You should stick to posting on issues you actually know something about, whatever they may be, rather than repeatedly posting such dribble.

I think I have a fair understanding of both scientic method and the scientific issues involved here. But I'll leave it for others to draw their own conclusions, and will continue waiting with interest to see whether "scientific method" comes up with any challenge to the case against A1 milk and BCM7. Cheers

[nextbigthing]

Assuming there is only one seller

Correct, given the pattern of selling I'm guessing there's only one. But there could be more.

[nextbigthing]

My understanding NBT is that once you achieve a 5% holding then its a change of 1% of total holding that needs to be reported. That's 6.6 million shares not 33m shares.(may need to be corrected on that)
What I am more unsure about is the time frame of when more or less than 1% change is required to be reported by those holding over 5%.

Assuming I am correct with the 1% reporting threshold then has there been a big change in shareholding not yet reported, or are there lots of less than 1% shareholdings among the bigger players who hold over 5% changing hands, or are there lots of less than 5% shareholders selling, or is there lots of selling and buying back going on with the same shareholder, or is someone manipulating the SP somehow through derivatives, or what?

6.6m would've been cleaned up in a matter of days so I think we can assume that's not the case

[nextbigthing]

And assuming its not a short seller, who can borrow, sell and buy back the same shares forever.

Yes, I personally think this is looking like the most likely option.

That raises the question; if they are creating all this artificial sell volume then surely when they eventually give it up then it should return to its fair value (whatever that may be). And if they choose not to give it up, then they risk getting stung big time when the good news starts flowing or if their bluff gets called by someone with a bit of cash behind them.

[MAC]

MAC you may well be right that it is all a matter of awareness of the heath "issue" leading to sales. It may be in the interests of a2 (and holders) for the scientific "uncertainty" to continue. However that is not a terribly meritorious position for the company to take morally.

Morality, not sure I’d go as far as to make it such an issue Black Knat, very many products out there in the world are sold without clinical trials having ever been performed on a comparative basis. I’ve never seen a scientific study suggesting vegemite is any better than marmite.

The Australian chief executive Peter Nathan quite clearly says that ATM are "definitely not making a health claim", "We are simply saying that this is a milk which many people have reported enables them to enjoy the benefit of dairy without the discomfort."

What I would say though is that the a2 milk company truly have an exceptional marketing team, but, at the end of the day, if customers have trialled the product for themselves, have assessed the benefits at home with their family, and have voted at the supermarket checkout, who are you or I to say they are wrong.

[Harrie]

6.6m would've been cleaned up in a matter of days so I think we can assume that's not the case

These are the rules from the Financial markets conduct act Sept 2013

Thresholds
The thresholds for disclosure are when a person's relevant interest in voting securities reaches, exceeds or falls below 5% or more of a class of voting securities and where there is an increase or decrease of 1% above that. A disclosure is also required for any change in the nature of any relevant interest.

Also:
Deadline
Notify a change in holdings as soon as the disclosable event has occurred.

This appears to me to be that once the 5% of voting shares has been attained, securities bought or sold representing 1% of total shares must be disclosed within a reasonable time frame.
I think we can safely say that neither Milfords nor any other substantial shareholders position has changed by more or less than 6.6 million shares in the last couple of months.
Based on the number od shares NBT has indicated have been traded, and assuming there is no "borrowing" going on, its also possible that there is a whole heap of shareholders out there jumping out because the wholesale milk market has been kicked to touch, shareholders who have less than 5% of the companies shares could easily trade 33 million shares over a few months.
The same shareholders are likely to come back into the market when there is better news coming out of China, UK and USA.
I'm not sure that I subscribe to the theory that anyone would be stupid enough to play the borrow and buy back game on such a thin market...bloody suicide

[MAC]

I think it must remain a matter of engineered pragmatism Harrie.

Too many hard health facts and certainties released too soon risks raising the A1 companies ire before the a2 milk company has grown big enough to fend them off.

If ATM were to be taken over by one of the big multinationals, then boom, watch them take on the A1 bunch head on with trials galore and all that financial backing, but not yet as a small antipodean milk company.

Too much market share and similarly the knives will proportionally come out, we have started to see a bit of that in Australia already. My view is that the market share should be capped at around 15% in Australia, controlled from that point forward by retail price setting.

[Harrie]

Morality, not sure I’d go as far as to make it such an issue Black Knat, very many products out there in the world are sold without clinical trials having ever been performed on a comparative basis. I’ve never seen a scientific study suggesting vegemite is any better than marmite.

The Australian chief executive Peter Nathan quite clearly says that ATM are "definitely not making a health claim", "We are simply saying that this is a milk which many people have reported enables them to enjoy the benefit of dairy without the discomfort."

What I would say though is that the a2 milk company truly have an exceptional marketing team, but, at the end of the day, if customers have trialled the product for themselves, have assessed the benefits at home with their family, and have voted at the supermarket checkout, who are you or I to say they are wrong.

Could not agree more MAC. The science may never "prove" a correlation between A1 and health issues, so if consumers rely totally on absolute undisputable scientific evidence to prove that A1 has health downsides they will be waiting a long time. In the meantime more and more anecdotal testimonials continue to pour in favouring a switch to A2 for a variety of reasons. That is a lot more powerful than the science.

[Tsuba]

I thought I was going to try my first A2 today. I phoned Fresh Choice in Queenstown yesterday and the chap I spoke to said they were getting in 10 units. Well I went there this morning and not a sausage. The lady I spoke to said they had some in for an Australian customer request but dumped it due to not being popular and hard to get. The A2 label was on the shelf $4.99.

New World in Frankton do not stock. Sorry for getting NTs hopes up.

[NT001]

I think a bit too much can be read into a reported comment by Peter Nathan (CEO of A2MC Australia) that "we are definitely not making a health claim" in relation to the Curtin University trial. He was just making the point that by publicising the Curtin results, A2MC was not infringing the law against "health claims". He was certainly not playing down the Curtin findings, nor was he denying the central theme of the company's sales campaign, that drinking A2 milk can bring health benefits.

It comes down to a technicallegal issue. A2MC's rivals would love to see the company prosecuted and tied up in legal proceedings for allegedly transgressing the strict laws barring the making of "health claims" for food products, and Mr Nathan is not about to walk into that trap.

The company's policy is to mainly let scientists and medical professionals do the talking. The lead scientist in the Curtin trial has been speaking widely on its findings and getting great publicity, especially in UK media.

The Curtin trial's conclusion that people drinking A1 milk tended to suffer digestive problems not experienced by those drinking A1 was not a "health claim", it was a scientific finding. And it is prominently publicised on A2MC's websites.

[Harrie]

NT. I'm delighted to hear that Curtins scientific anaysis is getting some traction in the UK. Its all "griss to the mill" along with anecdotal evidence. The study however is centred around digestive discomfort and I'm not sure that this alone will encourage increased sales for A2. For me the biggest impact would be if evidence could show that in a large number of cases, "deemed" lactose intolerance is more to do with A1 beta casein than the lactose in the milk which is also found in A2, so A2 is not going to work for those who are actually lactose intolerent. If a study could show that, especially in the UK, where 20% of the market are supposedly lactose intolerent, then A2's future would look pretty bright, because it could lead on to other "perceived" health benefits. Apart from that study, the science would need to prove correlations with type 2 diabetes to get traction, IMO and that is a much longer process to prove.

[MAC]

Fair enough MAC, however a number on this thread and in the wider community go well beyond Mr Nathan's comments, and claim numerous health benefit that are established scientific fact.

Oh well, each to their own you know, to be fair though there are over a 100 scientific papers in support of a2 benefits that cannot be totally ignored, probably many papers that don't support it too.

Science in the lab is just that but if that is enough for some folk to believe, then there’s nothing wrong with that Black Knat, that's fine and harmless.

It is only clinical trials on humans though that would provide any definitive proof, the science alone can’t do that, and I don’t think ATM should feel a need to do any trials to be honest.

Many years away may a conclusive outcome be, it makes for much better marketing for mum’s on the internet to discover a new feel good product, than it does poking an a1 juggernaut in the eye with clinical trials.

[Harrie]

In previous posts, I had mentioned that fund managers operate under an investment mandate to the effect that there is usually self imposed limits on exposure to any one listed security on the NZX. With Milford funds management having the highest exposure to ATM as a funds management group I searched their website to see if there was anything in their investment statements to that effect and could not find anything. I emailed them to find out and got this response:

"We do have a limit of a maximum of 7% in any one NZX listed company, however, this is not a hard and fast rule.

If we felt that a company held excellent growth opportunities that we wanted to take advantage of we could hold more than this, however, any such decision would be carefully considered and investigated by both our Investment Committee and our Risk and Compliance department."

In view of the fact, that in the absence of any disclosure representing a change of 1% of the company shares over the last few months, they hold over twice their own maximums, they would have to have shown significant confidence in ATM's growth path to both their investment and compliance committees to maitain their 15% exposure.
It was for this reason I suspected that Milford could have been a seller, and hence comment around timliness of disclosure under the relevant act.
I can immagine that given the above investment mandate, the risk committee have got their work cut out to sanction maintaing that exposure!

[NT001]

There are over a 100 scientific papers in support of a2 benefits that cannot be totally ignored, probably many papers that don't support it too.

Science in the lab is just that but if that is enough for some folk to believe, then there’s nothing wrong with that. It is only clinical trials on humans though that would provide any definitive proof, the science alone can’t do that, and I don’t think ATM should feel a need to do any trials to be honest.

Science is crucial to this whole debate. Otherwise the critics, doubters, commercial competitors and mainstream dairy industry will simply keep on saying there's no scientific proof, and anecdotal reports are just emotional garbage.

Consumers usually read the media before buying something new and controversial, and if the science doesn't support the product they're much less likely to try it - and if they don't try it they won't experience its benefits.

Some science can only be done in the lab, and should not be dismissed as merely "fine and hamless" for those who like to believe that kind of stuff. Lab science adds vitally to the overall understanding of the A1-A2 issue.

For example, when the European Food Safety Authority concluded there was no health benefit in A2 milk a primary reason it gave was that although BCM7 was dangerous it could not get into the human bloodstream and be carried to the brain where it could wreak havoc. This has since been disproved by lab tests of blood taken from human subjects. Without those lab tests, the EFSA's findings would stand intact, whereas they were fundamentally flawed.

Based on those lab tests, it is now possible to explain how BCM7 can be linked with conditions such as autism. No one is saying BCM7 is the sole cause of autism, but this knowledge helps inform health professionals why they are finding that some patients on the autistitic spectrum show remarkable improvement when they switch to A2. These professionals now have a scientific explanation, which is what they want, as to why this may occur.

Clinical trials on humans are also important because for years the critics have been saying "the only evidence you have is based on mice and rabbits - what about humans?" The Curtin trial was the first of its kind involving humans, and it has caused quite a shift in that aspect of the debate. It is no longer possible to say "there's no evidence that people drinking A2 have better outcomes than those who drink A1."

As regards the number of scientific papers for and against A2, a lot of the scientific papers on milk protein research don't actually analyse the health benefits of A2. What they analyse is the health dangers of A1 - that's where the big scientific interest lies. No one is saying if you drink A2 you won't get autism or diabetes or schizophrenia or tummyache. It's like the old smoking debate - no one claimed that if you didn't smoke you wouldn't get lung cancer.

Regarding papers not supporting the benefits of A2, let's put it this way: there has only been one peer-reviewed paper that concluded there was essentially no difference between drinking A1 and A2, and that paper has since been comprehensively shot down. It was based on a rodent trial that was subsequently admitted by Fonterra's chief scientist to have been a total cockup.

[Snoopy]

In previous posts, I had mentioned that fund managers operate under an investment mandate to the effect that there is usually self imposed limits on exposure to any one listed security on the NZX. With Milford funds management having the highest exposure to ATM as a funds management group I searched their website to see if there was anything in their investment statements to that effect and could not find anything. I emailed them to find out and got this response:

"We do have a limit of a maximum of 7% in any one NZX listed company, however, this is not a hard and fast rule.

If we felt that a company held excellent growth opportunities that we wanted to take advantage of we could hold more than this, however, any such decision would be carefully considered and investigated by both our Investment Committee and our Risk and Compliance department."

In view of the fact, that in the absence of any disclosure representing a change of 1% of the company shares over the last few months, they hold over twice their own maximums, they would have to have shown significant confidence in ATM's growth path to both their investment and compliance committees to maitain their 15% exposure.
It was for this reason I suspected that Milford could have been a seller, and hence comment around timliness of disclosure under the relevant act.
I can imagine that given the above investment mandate, the risk committee have got their work cut out to sanction maintaining that exposure!

Harrie, I suspect you have misinterpreted Milford's e-mail response to your question.

A fund manager limits risk by balancing the size of each investment in their total portfolio. A 7% limit would mean no particular investment of Milford's portfolio would be allowed to exceed 7% of the value of Milford's total investment in that fund. So if a company was relatively small (like ATM), Milford could easily hold a much bigger stake than 7% of the shares on issue in that company (in ATM for example), without going over the 7% ceiling of total value for one company in the underlying Milford fund.

SNOOPY

[Harrie]

Harrie, I suspect you have misinterpreted Milford's e-mail response to your question.

A fund manager limits risk by balancing the size of each investment in their total portfolio. A 7% limit would mean no particular investment of Milford's portfolio would be allowed to exceed 7% of the value of Milford's total investment in that fund. So if a company was relatively small (like ATM), Milford could easily hold a much bigger stake than 7% of the shares on issue in that company (in ATM for example), without going over the 7% ceiling of total value for one company in the underlying Milford fund.

SNOOPY

Fair interpretation Snoopy, I'll get that clarified. Its how Milford have interpreted my question. I can see that 7% of Milfords total funds under management would be quite different to 7% of ATM's shareholding

[MAC]

I’ve only read a small amount of research NT, it all seems well presented and reasoned at face value to me but I’m not a biochemist, I do have one in the family though who gives a2 milk a ‘why not’ endorsement and has her tea with a2.

http://www.betacasein.org/index.php?p=science-overview

For the lay public though, it’s try at home and word of mouth from there that does the real biso though wouldn’t you say. Who’s really to say why more prefer vegemite to marmite ?

I don’t drink a lot of milk, so I’m undecided if it’s giving me all the benefits, but what I do know is that it makes a dam fine cup of coffee, whether that’s the a2 protein or the jersey cows I don’t know, but it’s a good enough reason for me.

[winner69]

Fair interpretation Snoopy, I'll get that clarified. Its how Milford have interpreted my question. I can see that 7% of Milfords total funds under management would be quite different to 7% of ATM's shareholding

ATM is just over 2% of their Active Growth Fund

[winner69]

Do they hold it in any of the other funds?

(a) total number held in class: 97,877,776
(b) total in class: 660,066,979
(c) total percentage held in class: 14.83% (note, relevant interests held by the manager as follows):
Milford Active Growth Wholesale Fund (3.32%), (Custodian - TEA Custodians),
Milford Dynamic Wholesale Fund (2.51%), (Custodian - TEA Custodians),
NZ Equities Wholesale Fund (3.83%), (Custodian - TEA Custodians),
Waikato Community Trust (0.33%), (Custodian - TEA Custodians),
New Zealand Superannuation Fund (3.45%), (Custodian - New Zealand Superannuation Fund Nominees Limited)
Mercer Trans-Tasman Shares Trust (1.39%), (Custodian – BNP Paribas Securities Limited).

[NT001]

I’ve only read a small amount of research NT, it all seems well presented and reasoned at face value to me but I’m not a biochemist, I do have one in the family though who gives a2 milk a ‘why not’ endorsement and has her tea with a2. For the lay public though, it’s try at home and word of mouth from there that does the real biso though wouldn’t you say?


Thanks MAC. I'm not a biochemist either but the abstracts of a lot of papers give the guts - and Keith Woodford's book is my bible. I'm glad the biochemist in your family uses A2.

I totally agree with you that word of mouth and try-at-home are hugely important, but if the media are saying A2 is a dud and is unsupported by science, far fewer people will try it or recommend it, and fewer shops will stock it. Cheers

[nextbigthing]

Depth is currently looking terrible! Any lower and I might launch a takeover myself :)

[dingoNZ]

Depth is currently looking terrible! Any lower and I might launch a takeover myself :)


good things don't happen overnight, just tuck these shares away in the draw and check back in 5 years

[bull....]

nice downtrend channel it is in hitting the top now with a bottom at 45c , bollingers have 54 weekly 50 monthly

[airedale]

I realise that ATM have patents and intellectual property for their product, but is there anything which would prevent another milk company, or farm company, from breeding from their own A2 cows and selling that milk.

[MAC]

I realise that ATM have patents and intellectual property for their product, but is there anything which would prevent another milk company, or farm company, from breeding from their own A2 cows and selling that milk.

The answer is no, Fresha do exactly that, but only by agreement and they must pay royalties to ATM.

[BFG]

Looks like a bollinger band squeeze with another leg lower. Blue horseshoe definitely does not love ATM.

[NT001]

I realise that ATM have patents and intellectual property for their product, but is there anything which would prevent another milk company, or farm company, from breeding from their own A2 cows and selling that milk.

It probably can't be stopped entirely but there are difficulties. A2MC's IP includes exclusive trademark rights to use the label "A2" in marketing milk in quite a few countries. It also owns exclusive rights to the technology whereby one candetermine that a cow is pure A2. There's no point in a rival saying "we've got cows that we are pretty sure are all A2" because you only need to have one cow in the herd that is half-half A1-A2 (which could be easily detected by testing a bottle of its milk) and you'd be exposed for selling A1-contaminated milk. Simply breeding-on from cows that have been tested as A2 would be pretty risky. You really need to have every new cow in the herd tested, which is not exactly cheap - in fact that's one of the reasons A2 milk is expensive..

As regards the trademark limitation, if you had your cows tested and they were all pure A2 you might be able to market the milk as "A1-free" but then you'd have to conduct a marketing campaign explaining what that means, and you'd run into REAL problems with mainstream dairy of a kind that A2MC has so far pretty much managed to avoid.

[klid]

Wow the share price keeps on falling. I was liking it at 60c, when is this trend going to end?

What I don't understand is why they don't focus more on marketing. Broadcast. Television and internet advertisements about it.

Personally, I like milk, but know of a lot of people that don't drink it because it upsets their stomachs or whatever. Well, I only know of this milk because they trade on the NZX. If I were a person that has issues with milk, i.e. their target customer, and didn't have knowledge of the company through the NZX, then I wouldn't know about this milk at all, and I think therein lies the problem, mostly problematic with the UK market.

Probably this has been seen linked to etc but I was just reading it:
http://www.dairyreporter.com/Markets/Western-functional-milk-success-limited-different-picture-in-Asia

[ratkin]

Wow the share price keeps on falling. I was liking it at 60c, when is this trend going to end?

What I don't understand is why they don't focus more on marketing. Broadcast. Television and internet advertisements about it.

Personally, I like milk, but know of a lot of people that don't drink it because it upsets their stomachs or whatever. Well, I only know of this milk because they trade on the NZX. If I were a person that has issues with milk, i.e. their target customer, and didn't have knowledge of the company through the NZX, then I wouldn't know about this milk at all, and I think therein lies the problem, mostly problematic with the UK market.

Probably this has been seen linked to etc but I was just reading it:
http://www.dairyreporter.com/Markets/Western-functional-milk-success-limited-different-picture-in-Asia

When i was in the UK saw plenty of adverts with Danni Minogue jumping around on a trampoline, but when i went in the shops found nothing. Apparently i was in the wrong part of the country and it wasnt stocked.
There so many milk alternatives around now that for most people its easier to just drink one of them. Personally converted to soy years ago

[NT001]

(a) total number held in class: 97,877,776
(b) total in class: 660,066,979
(c) total percentage held in class: 14.83% (note, relevant interests held by the manager as follows):
Milford Active Growth Wholesale Fund (3.32%), (Custodian - TEA Custodians),
Milford Dynamic Wholesale Fund (2.51%), (Custodian - TEA Custodians),
NZ Equities Wholesale Fund (3.83%), (Custodian - TEA Custodians),
Waikato Community Trust (0.33%), (Custodian - TEA Custodians),
New Zealand Superannuation Fund (3.45%), (Custodian - New Zealand Superannuation Fund Nominees Limited)
Mercer Trans-Tasman Shares Trust (1.39%), (Custodian – BNP Paribas Securities Limited).

I wonder what Milford are telling their investor and custodial clients at the moment. I take some comfort from their presence with 14.83% of ATM, and when you put them alongside Freedom Foods with 18.6% and Mountain Road with 9% you've got a fairly solid identifiable core of 42%.

Presumably Milford's stakes are mainly held custodially by NZ Central Securities Depository Ltd (operated by the Reserve Bank) which has custody of 48% of ATM shares. We don't know much about the other 33% held in the same custody, but I expect some would be A2CM executives etc who would have sizeable holdings. There've been some sales out of NZCSD lately, although not huge - its total holding has only gone down 5m shares (less than 1% of ATM) since mid-August.

To my mind which is a bit untrained in these things, this leaves some interesting questions about where the recent selling has been coming from, and whether there has indeed been some circular trading going on.

[airedale]

It looked like the bottom was forming around 60 cents, today's action reinforces KW's oft repeated advice.

[Harrie]

Clarification on my previous post. Milford will not go past committing 7% of FUM to any one listed company on the NZX unles they thourily vet it through the risk and compliance committee. They will also not go above an exposure of any more than 19.90% of a companies share capital. They are close to that with Tourism holdings (18%) and restuarant brands (15%) and ATM (14.83%)

[winner69]

Immediately after the last ATM "death cross" the share price went up from 50c to 96c (+92%). The one prior went from 11c to 68c.

That "death cross" MAC was referring to was in June was around 80 cents......suppose after two previous big rises after a death cross ATM was due to do what often happens after a death cross.

KW said pure genius selling at a 200MA or something .....pure genius not buying at 80 cents in my case

Still watching ....maybe one day it might go up again, unless fundamentals are well and truly stuffed and ATM is really only worth 50 cents

[BFG]

GDT auction up 1.4% overnight.

[MAC]

GDT auction up 1.4% overnight.

Yes, it is good to see prices stabilising after the dizzying heights of the last year or two, very good for ATM to have lower farm gate supply costs going forward, good for the exchange rate too, all good.

There’s possibly only one seller not seeing it, here it is if you are reading.

http://www.nzherald.co.nz/economy/news/article.cfm?c_id=34&objectid=11342876

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[NT001]

Yes, it is good to see prices stabilising after the dizzying heights of the last year or two, very good for ATM to have lower farm gate supply costs going forward, good for the exchange rate too, all good.

MAC, I'm not sure that price movements in the global dairy market and changes in Fonterra's local farmer payout will have much direct impact on A2MC, either here or in Australia. Surely the company wouldn't be buying milk in the open market and at Fonterra's milk rates. It would have to have rather special contracts with its supplying farmers that would insulate them from the risky vagaries of the GDT.

Such contracts would have to compensate farmers for special costs, risks and practical requirements that don't apply to other dairy farmers. I'm not familiar with such details but I imagine they would include:

+building up an A2 herd in the first place;
+testing every cow initially for A2 purity and tagging each one electronically so their identity and A2 status can't ever be in doubt;
+keeping those cows separate from non-A2 stock, which in practice probably means having only A2 cows on the farm, and rigorously ensuring the exclusion of strays from next door;
+milking them in a reliable A2-only milking sheds;
+being subject to continuous milk testing to ensure absolute A2 purity, with the risk that if any truckload turns out to be at all A-1 contaminated, payment gets heavily cut.

It's because of all this stuff that A2 milk costs twice as much in the shops, and I wouldn't expect the retail price or the price paid to A2 farmers would change because of the GDT.

However, I can see how the GDT may affect the ATM share price simply by affecting the overall economy and investment market, and perhaps by giving investors a negative perception of anything to do with dairy.

[MAC]

It’s a worthy discussion NT,

The premium that a2 farmers receive in covering conversion and other costs over a1 farmers is 8 to 10%, ATM have told us that, however the retail premium is typically 50%, hence the potential of the a2 proposition.

I don’t know explicitly if ATM pay-outs to farmers swing as much over time or to the same extent that Fonterra’s pay-outs may do, though one would anticipate that Fonterra, simply because of their size and influence on farm gate prices, very probably do set an underlying market price in NZ, similarly with the large Australian dairy companies.

What does seem to be more certain though is that a2 retail prices have been consistent through both the rise and the fall in farm gate costs.

One can see the effect of high farm gate prices on both Fonterra and Synlait gross margins in the chart below.

ATM gross margins have not been affected, in fact they have risen, I attribute that to increasing efficiencies from an increasing scale of distribution and production including gains made at the Smeaton Grange facility offsetting any effect from the peak in farm gate prices.

If ATM are indeed reducing farm gate pay-outs right now we should see that already really quite nice gross margin pick even up a little further at HY15 reporting time, let’s see.

6362

[NT001]

It’s a worthy discussion NT,

The premium that a2 farmers receive in covering conversion and other costs over a1 farmers is 8 to 10%, ATM have told us that, however the retail premium is typically 50%, hence the potential of the a2 proposition.


Thanks, MAC, I wasn't aware of that margin figure. I had seen some discussion by farmers of whether all the bother was worth it.

[Harrie]

The gross margins graph you have posted MAC is interesting. What seems to be clear is that it proves what we already know and that is that A2 is seen to be a premium health product and falling farm gate prices, if anything, provides a benefit to ATM's gross margin.
Makes you wonder why the SP has be slaughtered comparative to FSF. Over the last year FSF have been negative 8% while ATM has been negative 21%. Over the last 6 months FSF have actually improved by 0.80% while ATM has been negative 35%. Admittedly, the SP for ATM probably hit a speculative spike around 6 months ago though. IMHO the speculative move was based on the premise that A2 would take off in the UK and USA the same way as it did in Aussie. The market dynamics over there obviously work quite differently. It took 5 or 6 years to get where it has in Aussie so its not unreasonable to expect that it will be at least similar in the UK and USA

[MAC]

Earlier in the year Milford and others were buying at 90c when analyst consensus price targets were at 88c, analyst consensus price targets are presently at 85c, that’s around 55% above present SP.

One can’t thus fairly say the SP was overvalued at 90c based on that advice, my view is that at 96c ATM was at fair value to marginally undervalued.

Would agree though that entering new markets is just like starting a new business and takes time. ATM did allow for such within their four year 2012 strategic plan.

Their advice is for UK profitability in 2017, around one year late due to Wiseman, they are well ahead of plan in Australia, they are behind on infant formula into China due to Synlait registration, but have opened up a new windfall fresh milk market of similar magnitude, we should anticipate the US to be profitable after the three year funding round is complete, probably in 2019 or 2020 IMO.

In terms of revenue targets and progress ATM had this to say within their FY;

“Whilst revenue growth in China and the UK are presently well behind original plan, this shortfall should be compensated by sales of infant formula in Australia and other products in both Australia and Asia”.

There are a lot more products and markets to assess now then there were just a couple of years ago, on balance and aggregate they appear based on that advice to be pretty on track.

The only real point of reflection is the revision of the 2016 revenue goal from $280M to $230M due to exchange rate movement, although since that revision there seems to have been some Fx relief, perhaps that will continue, who really knows

[Harrie]

No problem with any of that MAC, just a matter of the market cluing on to it I suspect. Interesting though that given Milfords average buy in price must be around the mid to high 70's, and that they could increase their holdings up another 5% at prices well below that to lower average cost, that they appear not to be doing so at this point?

[Fisherking]

It’s a worthy discussion NT,

The premium that a2 farmers receive in covering conversion and other costs over a1 farmers is 8 to 10%, ATM have told us that, however the retail premium is typically 50%, hence the potential of the a2 proposition.

I don’t know explicitly if ATM pay-outs to farmers swing as much over time or to the same extent that Fonterra’s pay-outs may do, though one would anticipate that Fonterra, simply because of their size and influence on farm gate prices, very probably do set an underlying market price in NZ, similarly with the large Australian dairy companies.

What does seem to be more certain though is that a2 retail prices have been consistent through both the rise and the fall in farm gate costs.

One can see the effect of high farm gate prices on both Fonterra and Synlait gross margins in the chart below.

ATM gross margins have not been affected, in fact they have risen, I attribute that to increasing efficiencies from an increasing scale of distribution and production including gains made at the Smeaton Grange facility offsetting any effect from the peak in farm gate prices.

If ATM are indeed reducing farm gate pay-outs right now we should see that already really quite nice gross margin pick even up a little further at HY15 reporting time, let’s see.

6362

Where are you getting the retail premium of 50% from? What i've seen in my local Countdown is 10% premium on regular milk. I cannot believe they are paying 50% more and selling for lower margin.

[MAC]

Where are you getting the retail premium of 50% from? What i've seen in my local Countdown is 10% premium on regular milk. I cannot believe they are paying 50% more and selling for lower margin.

I haven’t a more recent plot but a2 is still trucking along unwaveringly at a top shelf price of $5 per bottle http://shop.coles.com.au/online/national/a2-milk-full-cream-9760091p

6364

“Since inception, a2™ brand milk has retailed at the top end of branded milks, and from early 2011 has been at a c.150% premium over generic milks”

http://thea2milkcompany.com/wp-content/uploads/2014/08/Strategic-Plan-2012.pdf

Unlike Australia and the UK, the piddling New Zealand market at 0.11% of revenues, is controlled by a company called Fresha that supplies, markets, distributes and retails a2 under a licensing agreement. It is Fresha's business as to what they charge for their milk here not ATM's.

[MAC]

No problem with any of that MAC, just a matter of the market cluing on to it I suspect.

No wonder it begs for speculation Harrie, there’s been the big seller, the big shorter and the takeover talk, could of course be any or all of those things, but someone said to me a few days ago, not someone from ST from elsewhere, that there are still a lot of XRO margin calls firing.

Since we have not seen any SSH’s it’s led me to consider that perhaps all we are really seeing is one, possibly more than one, medium size but really quite desperate sellers having to cash up quick to settle their over extensions on XRO.

As the say on ebay, those who bought XRO also bought PEB and ATM and lux liquid, anyway, a YTD overlay of XRO and ATM tells the tale.

PEB may have broken the correlation after an AGM and a couple of analyst reports created enough buying pressure to offset the XRO losers, no such luck for ATM just yet.

But when one keeps stretching an elastic band tighter, tighter, tighter, well ……………………..

[nextbigthing]

I'm not 100% sure but I thought I read that ATM will always pay farmers 8% more than the going rate to reward them for having an a2 herd and to ensure supply.

[Harrie]

No wonder it begs for speculation Harrie, there’s been the big seller, the big shorter and the takeover talk, could of course be any or all of those things, but someone said to me a few days ago, not someone from ST from elsewhere, that there are still a lot of XRO margin calls firing.

Since we have not seen any SSH’s it’s led me to consider that perhaps all we are really seeing is one, possibly more than one, medium size but really quite desperate sellers having to cash up quick to settle their over extensions on XRO.

As the say on ebay, those who bought XRO also bought PEB and ATM and lux liquid, anyway, a YTD overlay of XRO and ATM tells the tale.

PEB may have broken the correlation after an AGM and a couple of analyst reports created enough buying pressure to offset the XRO losers, no such luck for ATM just yet.

But when one keeps stretching an elastic band tighter, tighter, tighter, well ……………………..

Seems like a more logical explanation for the trading irregularities to me MAC. I am highly sceptical that anyone would adopt the high risk strategy of shorting ATM by "borrowing" and buying back when the market for ATM is relatively thin. Get caught short I this stock and you would be utterly screwed

[BFG]

Others have probably said this .... shorting is very common. I believe for example that significant short positions were taken last year in DIL. I would personally be surprised if there had not been numerous short positions taken on many of New Zealand's more liquid "growth" companies over the six months or so.

None other than Morgan Stanley took a >5% short position in DIL during the drama. I remember Sparky calling it a great announcement... until we read further and saw the "borrowed stock repaid" lines later on!

[NT001]

I'm coming round to the view that at least part of the ATM selling is coming from investors who over-extended during the big peak early this year.

I've just been looking back through this thread between mid-December and mid-January and noticed that there was puzzlement among members, since there were no announcements or fundamentals that seemed to justify the sudden big rise except for the Forsyth Barr tip that ATM was a share to watch in 2014 and looked like a takeover prospect. The shares could have got a bit of extra stimulation from the announcement in early January that A2 Milk had gone on sale in a large number of UK supermarkets, but the sharp climb had already begun by then.

It looks like the FB speculation, which was widely reported, was probably the main trigger and might have lured a few gungho investors into over-extending, especially with some other high-profile shares (XRO) also looking good at that time. Some traders will have taken their ATM profits and got out quickly but I'm sure others hung on and are probably now being forced to reassess their holdings, especially if they have also invested in the energy SOEs and the raft of recent new software floats.

[Harrie]

Others have probably said this .... shorting is very common. I believe for example that significant short positions were taken last year in DIL. I would personally be surprised if there had not been numerous short positions taken on many of New Zealand's more liquid "growth" companies over the six months or so.

I am not saying shorting a stock does not happen Black Knat, more that it is unlikely to happen in a reasonably illiquid stock, unless you have some "inside" knowledge, because the risk/return factor does not stack up.
In this stock, one positive bit of news released to the market could send the price up by 10% or more given that unless its a reasonably significant announcement it would not be released. Caught on a short, especially if its a leveraged one would be an unhappy experience.
The proposition of traders needing liquidity to cover shorts in XRO or other speculative stock IMHO seems to make more sense to me.

[MAC]

I am not saying shorting a stock does not happen Black Knat, more that it is unlikely to happen in a reasonably illiquid stock, unless you have some "inside" knowledge, because the risk/return factor does not stack up.
In this stock, one positive bit of news released to the market could send the price up by 10% or more given that unless its a reasonably significant announcement it would not be released. Caught on a short, especially if its a leveraged one would be an unhappy experience.
The proposition of traders needing liquidity to cover shorts in XRO or other speculative stock IMHO seems to make more sense to me.

There’s been a total of $3,572M dollars wiped off XRO’s market cap since its peak thus far, yep I had to calculate that twice, couldn't believe it initially.

Much of that would have been salvaged from elsewhere, and many XRO investors were probably predisposed to investing heavily within the SciTech sector also. It’s no wonder stocks like ATM and PEB have been so very heavily beaten up in that context.

But, that just serves to provide absolute bargain basement prices for both growth and value investors about here. At 55c ATM is a half price discount sale as far as I’m concerned.

It’s been an interesting one, I don’t think very many at all back in March would have anticipated precisely that a single stock sell down like XRO could have had so much impact on others.

[mayday]

I am not saying shorting a stock does not happen Black Knat, more that it is unlikely to happen in a reasonably illiquid stock, unless you have some "inside" knowledge, because the risk/return factor does not stack up.
In this stock, one positive bit of news released to the market could send the price up by 10% or more given that unless its a reasonably significant announcement it would not be released. Caught on a short, especially if its a leveraged one would be an unhappy experience.
The proposition of traders needing liquidity to cover shorts in XRO or other speculative stock IMHO seems to make more sense to me.

If anyone has been shorting ATM, doesn't seem he's gonna make too much profit out of this stock. Although the cap looks slight high, FA still looks positive and most of shareholders seems to be willing to hold rather than sell.

Looking forward to the annual meeting in Nov.

Disc: holding

[MAC]

AGM is just a month away now, top of my list is;

It would be quite nice if ATM can provide a better sound bite to the media than “the first patent expires in 2015”, that’s more than just a bit misleading to those whom are not patent lawyers.

The other on my list relates to the habitual misunderstanding by some as to the extent of reinvestment and earnings sacrifice for growth. Virtually all free cashflow’s are going into growth and that will continue for at least another three years whist ATM are expanding into the US market.

I want to know if ATM would also consider reporting ‘underlying profit from ongoing operations’

That would much better clarify for some the efficacy of the business and perhaps also provide an anticipation of what should be expected from the potential of the new markets also.

[nextbigthing]

Danube want $550m or something out of Fonterra for the recent bot scare. That amount would buy them ATM at the current shareprice. My point being at this price it's peanuts to a large company like that, yet what's the IP worth to them? Ironic that the price has been driven right down recently.

[NT001]

There’s been a total of $3,572M dollars wiped off XRO’s market cap since its peak thus far, yep I had to calculate that twice, couldn't believe it initially.

Much of that would have been salvaged from elsewhere, and many XRO investors were probably predisposed to investing heavily within the SciTech sector also. It’s no wonder stocks like ATM and PEB have been so very heavily beaten up in that context.

But, that just serves to provide absolute bargain basement prices for both growth and value investors about here. At 55c ATM is a half price discount sale as far as I’m concerned.

It’s been an interesting one, I don’t think very many at all back in March would have anticipated precisely that a single stock sell down like XRO could have had so much impact on others.

That's a fascinating calculation, MAC, and really does give substance to this line of thinking. Strange that it doesn't seem to have been picked up by the media business analysts - it's got huge market ramifications. Is there any way of knowing how much of the investment in Xero was actually by NZers rather than offshore investors/traders?

[BFG]

What you witnessed in March was worldwide investors realising QE was ending and with it the hot money chasing more money upwards at extreme valuations. As such, growth stocks suffered horrendously. ATM is listed as growth.

I can guarantee a lot of those funds losing money were from elsewhere as XRO joined the NZX50 and the MSCI Global Index. Saw a lot of international trades pre and post market as well as Asian and Aussie traders flooding in around noon during the runs.

[MAC]

That's a fascinating calculation, MAC, and really does give substance to this line of thinking. Strange that it doesn't seem to have been picked up by the media business analysts - it's got huge market ramifications. Is there any way of knowing how much of the investment in Xero was actually by NZers rather than offshore investors/traders?

I'm really not sure NT, XRO is not a stock I own or research all that heavily, perhaps a question for others, but with the ATM market cap at a humble $356M, it does seem to provide some perspective.

Agree with you NBT, it does make ATM look like a tasty tit bit in the big picture.

[Goldstein]

There’s been a total of $3,572M dollars wiped off XRO’s market cap since its peak thus far, yep I had to calculate that twice, couldn't believe it initially.


Just checked the total NZX market cap, which is 88b. So your figure MAC is a whopping 4% (of current value). Blimey.

[Xerof]

Don't get too carried away.....the vast majority of holders hold (almost) forever, just look at any top 100 share register. It's just a peripheral group who will be in and out, plus the churners of course, who might play every day with a small fraction of their holdings, letting the algo's do it all for them

So, for most (in XRO at least), it's huge paper gains made on the way up, followed mostly by huge paper losses on the way down, to be sitting wondering WTF happened to their paper profits

[winner69]

Just checked the total NZX market cap, which is 88b. So your figure MAC is a whopping 4% (of current value). Blimey.

Add in $0.9 billion that RYM is down and the $1.0 billion FBU is down the losses on the NZX have been truly horrendous

Puts the $0.3 billion that ATM are down in the not too bad category eh .....almost on a par with EBO

[NT001]

Agree with you NBT, it does make ATM look like a tasty tit bit in the big picture.

For quite a while I've been suspicious that a planned takeover might be behind the apparently odd behaviour of the ATM share price, but this raises the question: what would a new owner actually do with ATM?

If the objective was to buy up its IP, what for? To try to close down the whole A1-A2 debate? That wouldn't achieve much because scientists around the world, totally independent of A2MC, have got their teeth into the issue of BCM7 and the risks attached to A1, and they can't be closed down, and won't be. They've barely started on this and will keep going on issues like BCM7's links with autism, schizophrenia, SIDS etc, and later the harder-to-prove links with diabetes and heart disease. They don't need funding from A2MC to keep working on issues that are of serious health concern globally.

A second alternative might be that the buyer would want to do pretty much what A2MC is already doing, but push it much faster. This would involve very vigorously promoting public understanding of the medical risks of A1, in other words taking on the global mainstream dairy industry head-on. Realistically this could only be done by a company that is not already involved itself in the production, processing or marketing of dairy products containing A1. That excludes Fonterra, Danone, Nestle etc. It would also involve antagonising the authorities in countries like China, Australia, NZ and quite a few others that have huge dairy industries and would not want to be told they are basically poison.

There's also the issue of supply. One reason A2MC is not moving quite as fast as some of us would like in places like the UK and USA is that it takes time to organise sources of supply, farmers in concentrated areas around a specialist processing plant who can produce commercially viable supplies of guiaranteed pure A2 milk. Not so hard if A2 is marketed as a niche product, but harder if it's supposed to take a big slice of the market.

So I'm going off the takeover idea. What I can still envisage, though, is a big company in the food and beverage field that is not in the dairy sector wanting a piece of the action through a buy-in. But that would have to be through a friendly offer. And let's not forget, Freedom Foods is already there with nearly 19% of A2MC and access through the Perich family to more cash if needed.

[MAC]

I had always considered a US takeover as more likely than Chinese or Australian, wouldn't rule it completly out though.

This is all hypothetical of course, there is no guarantee ATM would get the same penetration as they presently have or may continue to further grow in Australia, or alternativley they could get more in the US, who really knows. Home brand retail milk prices are similar in Australia and the US though.

Australia pop: 23M
United states pop: 319M
Australian segment revenues FY14: $107M

A similar sized US market could generate in say 5 years time, 107 x (319/23) = $1,484M in revenues

With an ATM market cap presently at $363M, the US market alone could well be attractive to one of the larger US dairy companies whom may want it from the get go, well about now.

[see weed]

With respect NT001 I don't really know where to start. Those studies suggesting a heath benefit associated with a2 milk as against a1 milk are inconclusive. They have not been accepted by mainstream health professionals as convincing. They have to be convincing in order to establish a likely benefit.

I take it that your explanation as to why the majority of mainstream health professionals do not accept there is a benefit with a2 is because you think they are bias, or there is a world-wide conspiracy on the part of the dairy industry or some such thing. In my view that is unlikely, the better view is that most mainstream health professionals who have taken the time to review the evidence have found it unconvincing.

My worry with this thread is that (with the greatest of respect) there is a nut-case element. Some of the activities described are a little disturbing (seeweed) and much of the "scientific" comment is at best unmeasured and at worst ignorant.

Fully agree, I would have to be a nut-case buying another 18k today, which I did. Phoned Milford Asset Man. this avo, but they would not tell me anything.

[psychic]

Some nut just bought about 930,000 shares post close.........

[NT001]

Some nut just bought about 930,000 shares post close.........

Pretty sound investment, I'd say. Wouldn't you agree, MAC?

[MAC]

Pretty sound investment, I'd say. Wouldn't you agree, MAC?

Oh absolutely and totally without a doubt, it was actually a 2,860,947 share buy that went through after the close, someone clearly wanted to lock it in before the weekend, should be interesting to see what next week brings.

I think Physic was responding to Seeweed and Black Knat's wee scientific debate.

I would only point out that when it comes to science there is a very fine line between genius and insanity, perhaps crazy not to give something good a try, perhaps a genius for doing so.

[nextbigthing]

NT001, why would someone like Nestle not takeover ATM completely for the IP and then use their power to promote and distribute a2 milk but at a mainstream level giving them a seriously good point if difference over say Danube. It actually doesn't take long at all to test/build an a2 herd so would be a smart move. And why not spend $30m driving the price down to get the whole company $300m cheaper?

The other thing is there's still no SSH notices from a seller but also not from any BUYERS. Could someone be buying and selling to themselves to drive the price down for a takeover?

[NT001]

NT001, why would someone like Nestle not takeover ATM completely for the IP and then use their power to promote and distribute a2 milk but at a mainstream level giving them a seriously good point if difference over say Danube. It actually doesn't take long at all to test/build an a2 herd so would be a smart move. And why not spend $30m driving the price down to get the whole company $300m cheaper?

The other thing is there's still no SSH notices from a seller but also not from any BUYERS. Could someone be buying and selling to themselves to drive the price down for a takeover?

It's all possible, NBT, who knows? I certainly agree there may have been some circular trading to drive the price down. Your scenario does have some logic and we need to watch for it, although I've recently tended to doubt its viability and that's why I advanced my reasoning. Good to keep all these options under discussion though.

[see weed]

It's all possible, NBT, who knows? I certainly agree there may have been some circular trading to drive the price down. Your scenario does have some logic and we need to watch for it, although I've recently tended to doubt its viability and that's why I advanced my reasoning. Good to keep all these options under discussion though.

Sold some 3 weeks ago, but have bought them back again to average down. Maybe there might be a few others doing the same.

[NT001]

Oh absolutely and totally without a doubt, it was actually a 2,860,947 share buy that went through after the close, someone clearly wanted to lock it in before the weekend, should be interesting to see what next week brings.

Actually it appears about 450k of those went through in trades 9-27 of normal afternoon trading at 55c, and the rest, about 2.4m, were picked up in 10 further trades at the same price after the close. What's going on? Someone selling to/buying from themselves as NBT suggests?

[Harrie]

Actually it appears about 450k of those went through in trades 9-27 of normal afternoon trading at 55c, and the rest, about 2.4m, were picked up in 10 further trades at the same price after the close. What's going on? Someone selling to/buying from themselves as NBT suggests?

No, I think in the absence of any SSH notices it is just some selling pressure from punters holding long positions in XRO etc needing to cover margin calls.

There is a possibility that a group of smart arses working a jump or two ahead of the market seeing what is happening to the long covering, and using the borrow and buyback technique in anticipation of further selling pressure in the more illiquid stocks such as ATM where there are bigger bangs for the same buck on the downside. Here, only small amounts of shares sold a have a large impact on price. I still see that as a long shot though...highly speculative.

The only other possibility but less likely, is the take over possibility. Don't know if this is a good strategy either because I'm sure freedom foods, and other major shareholders would have to be looking at a price of $2.00+ therefore a little bit of manipulation to drive the price down in the short term would not make a single bit of difference to an offer price IMO.

[NT001]

FWIW I pulled the following trading totals in ATM from Yahoo.com for the six months April 17-Oct 17, correlating them with the fall in share price over that period.

April 17-30 (10 days) 13,774,100 shares SP fall 85c to 81c

May (22 days) 44,229,000 80c to 78c

June (21 days) 50,863,000 78c to 69c

July (23 days) 21,331,400 70c to 65c

August (21 days) 21,907,000 63c to 64c

September (22 days) 25,193,500 62c to 58c

October 1-17 (13 days) 8,686,800 59c to 55c

Six-month total 185,984,800 85c to 55c

Trades equivalent to 28% of the company’s 660,066,979 shares on issue have taken place in six months.

There were three days, in May-June, when trades exceeded 10m shares, and there have been three other days when they were approx 6m or above. The last really big trading day was 26 August (8.25m)

[winner69]

FWIW I pulled the following trading totals in ATM from Yahoo.com for the six months April 17-Oct 17, correlating them with the fall in share price over that period.

April 17-30 (10 days) 13,774,100 shares SP fall 85c to 81c

May (22 days) 44,229,000 80c to 78c

June (21 days) 50,863,000 78c to 69c

July (23 days) 21,331,400 70c to 65c

August (21 days) 21,907,000 63c to 64c

September (22 days) 25,193,500 62c to 58c

October 1-17 (13 days) 8,686,800 59c to 55c

Six-month total 185,984,800 85c to 55c

Trades equivalent to 28% of the company’s 660,066,979 shares on issue have taken place in six months.

There were three days, in May-June, when trades exceeded 10m shares, and there have been three other days when they were approx 6m or above. The last really big trading day was 26 August (8.25m)

What does the correlation show NT?

Remember free float is 422 million shares so effectively 44% of shares churned in 6 months. Take into you and MAC haven't sold that's nearly an annualised 100% churn.

Remember also that one (if not 2) of those high volume days was Milford selling.

Don't all those numbers just suggest a long steady sell down over the last six months? Often this is a sign that price is just adjusting to fair value. Nothing more or nothing less than that and no conspiracy theories needed, just speculation drove the shareprice to unrealistically great heights and 55/60 cents really is a fair price.

In the absence of any profits how fair is 55 cents value? At $363m market cap ATM is at more than 6 times book value and trading at more than 3 times sales. Even if it had a NPAT margin of 16% it would e trading on a PE of 20. All seem to suggest current price more than 'fair'

I just waiting for maybe buying at a discount to this 'fair' price

[BFG]

Just picked up a bottle of A2 to try over the coming week as lactofree was out. Certainly not selling as fast as the Lewis Road stuff, but then again what is (do they put crack in it?)

[NT001]

Don't all those numbers just suggest a long steady sell down over the last six months? Often this is a sign that price is just adjusting to fair value. Nothing more or nothing less than that and no conspiracy theories needed, just speculation drove the shareprice to unrealistically great heights and 55/60 cents really is a fair price.

Yes Winner, I think you and Harrie have probably got it right, between you. In posting those transaction totals I was not suggesting a conspiracy, just noting the facts which I agree support your interpretation. As I pointed out myself in post 2195, there was no obvious rational basis for the SP surging into the 90s, and in view of what's been happening elsewhere (XRO etc) an adjustment was hardly surprising.

Fair price? On your figures the SP is overpriced. MAC and I would say otherwise and he has TA to support his view, I've really only got a lot of faith in the company and its science assets. The market's a bit against ATM at the moment, and I still don't discount takeover of some kind, although for what purpose I can't quite see. Good time for long-term holders to accumulate, I'd say. Tomorrow could be interesting.

[NT001]

Don't all those numbers just suggest a long steady sell down over the last six months? Often this is a sign that price is just adjusting to fair value. Nothing more or nothing less than that and no conspiracy theories needed, just speculation drove the shareprice to unrealistically great heights and 55/60 cents really is a fair price.

Yes Winner, I think you and Harrie have probably got it right, between you. In posting those transaction totals I was not suggesting a conspiracy, just noting the facts which I agree support your interpretation. As I pointed out myself in post 2195, there was no obvious rational basis for the SP surging into the 90s, and in view of what's been happening elsewhere (XRO etc) an adjustment was hardly surprising.

Fair price? On your figures the SP is overpriced. MAC and I would say otherwise and he has TA to support his view, I've really only got a lot of faith in the company and its science assets. The market's a bit against ATM at the moment, and I still don't discount takeover of some kind, although for what purpose I can't quite see. Good time for long-term holders to accumulate, I'd say. Tomorrow could be interesting.

[MAC]

I think you mean FA rather than TA NT001, I honestly couldn’t do what you do, invest on faith and science alone, the money wouldn’t leave the bank, I have to do the numbers, anally run the DCF and other models, even that’s not enough, there has to be good forward growth prospects, good management, market research and a focused strategic plan.

I’m happy to continue to hold ATM for several years or until the fundamentals alter, no sign of that at this time, I’ve topped up recently and am content with my spread, would be topping some more right now if I wasn’t already at my diversification limit. It’s a dip and opportunity from fair value that should never have occurred, and that’s no reason not to take advantage.

[nextbigthing]

anally run the DCF and other models

Must resist the urge to post the multitude of inappropriate comments running through my mind right now.

[mayday]

Must resist the urge to post the multitude of inappropriate comments running through my mind right now.

LOL...dudes

[Harrie]

I agree with you W69, apart from trying to dispel conspiracy theory, technically it would appear that ATM is close to "fair value" based on the ratio analyses you have calculated. We have all done those calcs but as everyone knows todays fair value is tomorrows discounted price in some cases.

The question has to be around market growth potential and the belief that ATM can capitalise on opportunities and significantly increase its sales revenue. The market SP definitely moved on anticipation of growth expectations earlier this year. The market is telling us now that expectation of growth has been less than convincing to date, and that until it reads otherwise ATM will be discounted to around technical "fair value".
I accept MAC's DCF models but these are based on forecasts and forecasts are just that. Forecasts need to be justified by reality. Its all about the faith that this company can forfill its sales revenue targets. Its a bigger leap of faith to be buying in at 90c, but less of a leap at 55c.
I look at the science and the growing anecdotal evidence. I look at the growing market for milk powder and fresh milk in China, (goddam its $16 bil now and expected to grow to $30bil by 2017!) I see without any conclusive scientific evidence A2's share by sales revenue in Australia move to around 10%, I see the massive amount of leverage that can be gained by a diversification of product using A2, I see more discussion around downsides of A1 beta protein etc etc, then I look at the downside. Its still milk, there has been no scientific evidence that it has any detrimental effect, its the closest to mothers milk you can buy, so the worst that can happen is that it will trade at "fair value".
This would have to be the best "fair value" investment around...just keep accumulating.

[winner69]

Anybody have any idea what the cash (investing cash that is) is needed over the next 5 years to make this growth happen.

I note 2013 was $5.8m and 2014 was $7.5m ......what about the next few years?

Just anally updating DCF

Probably will need to reverse engineer growth rates and margins to get anyway near an EV of $660m ($1 a share) and then assess that with my current assumptions.

[nextbigthing]

Just anally updating DCF


IMHO this method produces sh!t results.

[NT001]

I think you mean FA rather than TA NT001, I honestly couldn’t do what you do, invest on faith and science alone, the money wouldn’t leave the bank, I have to do the numbers, anally run the DCF and other models, even that’s not enough

Yes MAC, I did mean FA, which is an abbreviation describing how much I know about it, as many on this thread will have realised by now. I was lucky to buy in when I had some spare cash and A2Corp was a penny dreadful that sounded like it was onto something interesting and beneficial. I get a lot of fun out of discussing where it may or may not be headed, and would be concerned about a takeover, but I have other things to do in life than worry about managing it technically as an investment. The way you do it sounds interesting.