ATM - A2 Milk Corporation Limited

[see weed]

A2M up 10c after NZX close yesterday. Is today the day of Results? Or will it be tomorrow......Friday at 4.30pm?.........opps

[mfd]

Nothing big changed ...only projecting pretty lower margins ahead ...also did 677 mil and full year around 1400 mil subject to some conditions ...so not seeing better second half ...On first look no down grade and no upgrade ....just a grind lower I suppose

Full year revenue guidance changed from 1.4-1.55 to just 1.4, upside is gone. Full year margin guidance reduced from 26-29% to 24-26% excluding spending on Mataura Valley. Not a great result. Better hope for more next year...

[trader_jackson]

1H NPAT down 35% and another downgrade (margins and revenue down = big profit downgrade)...
The numbers were already falling apart, but now it appears the story is as well... and when the story begins to fall apart, Mr Market will no doubt be questioning if ATM is worth its current $8.3b...
Sub $10 on the open is my guess.

[Poet]

Full year revenue guidance changed from 1.4-1.55 to just 1.4, upside is gone. Full year margin guidance reduced from 26-29% to 24-26% excluding spending on Mataura Valley. Not a great result. Better hope for more next year...

To my reading, that's definitely the third downgrade.

[alokdhir]

1H NPAT down 35% and another downgrade (margins and revenue down = big profit downgrade)...
The numbers were already falling apart, but now it appears the story is as well... and when the story begins to fall apart, Mr Market will no doubt be questioning if ATM is worth its current $8.3b...
Sub $10 on the open is my guess.

Maybe after Australia open ...our folks in NZ are always more optimistic ...lol

But IMHO it will slowly grind down to earlier projected levels of $ 9 based on TA

[JeremyALD]

Full year revenue guidance changed from 1.4-1.55 to just 1.4, upside is gone. Full year margin guidance reduced from 26-29% to 24-26% excluding spending on Mataura Valley. Not a great result. Better hope for more next year...

Piss poor really. 1.4m also presumes "significant improvement" on quarter on quarter performance. It's clear the daigou channel has fallen apart.

I was also surprised their cash position has decreased and they have so much inventory on hand.

Considering making my exit today. Late I know, but the story is only getting worse at this stage.

[bull....]

terrible numbers

gross margins down due to channel mix change
inventory blow out which they are having trouble selling thru

just to name a few maybe i post some more sobering facts later

[Balance]

You can work the numbers out for yourselves : THIRD DOWNGRADE


Outlook FY21

Globally there continues to be unprecedented levels of uncertainty and volatility due to COVID-19.

The Company remains confident in the underlying fundamentals of the business and will continue to invest behind the brand and in its capability to drive long term growth.

However, the pace of recovery in the daigou/reseller channel and in the CBEC channel has been slower than previously anticipated and the Company now expects revenue to be at the lower end of the previous guidance range.
A lower EBITDA margin range is now expected due to lower revenue, higher brand investment, longer daigou/reseller support, movements in foreign currency and adverse channel mix relative to what was anticipated in December.

Accordingly, the Company’s FY21 outlook is now as follows:

• Group revenue for FY21 in the order of $1.4 billion

• Group EBITDA margin for FY21 of 24% to 26% (excluding MVM acquisition costs)

The outlook for FY21 assumes the actions being taken to re-activate the daigou/reseller channel deliver a significant improvement in quarter-on-quarter growth from 3Q21 to 4Q21.

Second Downgrade : 18 Dec 2020

Our FY21 guidance as follows:

• Group revenue for FY21 of $1.40 billion to $1.55 billion

• Group EBITDA margin for FY21 of between 26 per cent and 29 per cent.

First Downgrade : 28 Sept 2020

an update to our outlook to include our view of Group revenue as follows:

- Group revenue for 1H21 of $725 million to $775 million

- Group revenue for FY21 of $1.80 billion to $1.90 billion

- Group EBITDA margin for FY21 in the order of 31%.

Results for F20 : 19 August 2020

Total revenue of $1.73 billion, an increase of 32.8%

• EBITDA4 of $549.7 million, an increase of 32.9%

[winner69]

FUNDAMENTLS REMAIN STRONG they say in the headline

[bull....]

You can work the numbers out for yourselves : THIRD DOWNGRADE


Outlook FY21

Globally there continues to be unprecedented levels of uncertainty and volatility due to COVID-19.

The Company remains confident in the underlying fundamentals of the business and will continue to invest behind the brand and in its capability to drive long term growth.

However, the pace of recovery in the daigou/reseller channel and in the CBEC channel has been slower than previously anticipated and the Company now expects revenue to be at the lower end of the previous guidance range.
A lower EBITDA margin range is now expected due to lower revenue, higher brand investment, longer daigou/reseller support, movements in foreign currency and adverse channel mix relative to what was anticipated in December.

Accordingly, the Company’s FY21 outlook is now as follows:

• Group revenue for FY21 in the order of $1.4 billion

• Group EBITDA margin for FY21 of 24% to 26% (excluding MVM acquisition costs)

The outlook for FY21 assumes the actions being taken to re-activate the daigou/reseller channel deliver a significant improvement in quarter-on-quarter growth from 3Q21 to 4Q21.

Second Downgrade : 18 Dec 2020

Our FY21 guidance as follows:

• Group revenue for FY21 of $1.40 billion to $1.55 billion

• Group EBITDA margin for FY21 of between 26 per cent and 29 per cent.

First Downgrade : 28 Sept 2020

an update to our outlook to include our view of Group revenue as follows:

- Group revenue for 1H21 of $725 million to $775 million

- Group revenue for FY21 of $1.80 billion to $1.90 billion

- Group EBITDA margin for FY21 in the order of 31%.

Results for F20 : 19 August 2020

Total revenue of $1.73 billion, an increase of 32.8%

• EBITDA4 of $549.7 million, an increase of 32.9%

management should be given a hand. they saw it all coming and sold heaps of shares before it all went down hill

[alokdhir]

When all the Bs start posting here ...to me it means results are bad ...sure indication ...just waiting for the third also to say something here ...maybe soon ..lol :p

[Rawz]

Revenue 2H20 TO 1H21

Diagou -$183.5M (-46.7%)
CBEC -$77.2M (-42%)
China label +22.1M (+11.6%)

China store footprint increase to 22k stores from 19.1k (+15%)

You would think big drop in Diagou + CBEC would = large growth (say 40%+) in China label. Heck you would at least think it would grow in line with the 15% increase in store footprint. Perhaps Chinese mothers think if its not an English label then why pay the premium price.

[winner69]

Balance - no sign of the big clean out by the new CEO

That stock adjustment doesn't count as part of any cleanout

[winner69]

When all the Bs start posting here ...to me it means results are bad ...sure indication ...just waiting for the third also to say something here ...maybe soon ..lol :p

Right on - methinks this thread going to turn to custard today

[alokdhir]

Right on - methinks this thread going to turn to custard today


Actually its not that bad ..its not a full downgrade ...just little more damped expectations ...so I dont feel it will be big down immediately ...maybe slow grind down as market will need to write off this year and many will like to exit and deploy funds somewhere else in the meanwhile as it will be dead investment here for 6-12 months

[Balance]

Updated timeline for you, bull ....


management should be given a hand. they saw it all coming and sold heaps of shares before it all went down hill


You can work the numbers out for yourselves : THIRD DOWNGRADE


Outlook FY21

Globally there continues to be unprecedented levels of uncertainty and volatility due to COVID-19.

The Company remains confident in the underlying fundamentals of the business and will continue to invest behind the brand and in its capability to drive long term growth.

However, the pace of recovery in the daigou/reseller channel and in the CBEC channel has been slower than previously anticipated and the Company now expects revenue to be at the lower end of the previous guidance range.
A lower EBITDA margin range is now expected due to lower revenue, higher brand investment, longer daigou/reseller support, movements in foreign currency and adverse channel mix relative to what was anticipated in December.

Accordingly, the Company’s FY21 outlook is now as follows:

• Group revenue for FY21 in the order of $1.4 billion

• Group EBITDA margin for FY21 of 24% to 26% (excluding MVM acquisition costs)

The outlook for FY21 assumes the actions being taken to re-activate the daigou/reseller channel deliver a significant improvement in quarter-on-quarter growth from 3Q21 to 4Q21.

Second Downgrade : 18 Dec 2020

Our FY21 guidance as follows:

• Group revenue for FY21 of $1.40 billion to $1.55 billion

• Group EBITDA margin for FY21 of between 26 per cent and 29 per cent.

First Downgrade : 28 Sept 2020

an update to our outlook to include our view of Group revenue as follows:

- Group revenue for 1H21 of $725 million to $775 million

- Group revenue for FY21 of $1.80 billion to $1.90 billion

- Group EBITDA margin for FY21 in the order of 31%.

27 August 2020 : Massive Sale of Shares By Directors & Management

https://www.nzx.com/announcements/358806

Results for F20 : 19 August 2020

Total revenue of $1.73 billion, an increase of 32.8%

• EBITDA4 of $549.7 million, an increase of 32.9%

[Balance]

Balance - no sign of the big clean out by the new CEO

That stock adjustment doesn't count as part of any cleanout

You and I who have been around know what happens next, right?

[porkandpuha]

Not great, but not groundbreakingly terrible like some here would have us believe. Outlook is more towards the lower end of initial guidance and they may miss by 1-2% but given Mr Market has typically been skeptical with A2 over the past 4-5 months, it will be interesting to see if that was already factored in to yesterdays share price.

[Gregnz]

Right on - methinks this thread going to turn to custard today

Yep, it’s a shame. Many have left this thread permanently for these reasons. Will just let them go at it today, they can just reply to themselves all day. I think you’d be hard pressed to find many long term holders still present here.

[bull....]

ive updated my forecast for a pe of 15 - 18 based on current earnings given today implies share price of $5 - $6

[bull....]

Yep, it’s a shame. Many have left this thread permanently for these reasons. Will just let them go at it today, they can just reply to themselves all day. I think you’d be hard pressed to find many long term holders still present here.

lol there all over on hotcopper , reads like a drunken playlist of eternal hope

[Balance]

lol there all over on hotcopper , reads like a drunken playlist of eternal hope

Greed has turned to hope - soon will become FEAR?

[silu]

I'm gonna sell my remaining holding on open it seems. Although the report is nowhere as bad as some make us believe the way forward is suddenly clouded by marketing speak and I think management themselves are just pulling figures out of thin air now. I still think it is a worthwhile investment at the right price there's no use going against the negative sentiment at the moment.

[Ruby]

Be good if the 3B's could stick to factual commentary that is welcome,rather than enjoying a feeling of schadenfreude.

[Balance]

I'm gonna sell my remaining holding on open it seems. Although the report is nowhere as bad as some make us believe the way forward is suddenly clouded by marketing speak and I think management themselves are just pulling figures out of thin air now. I still think it is a worthwhile investment at the right price there's no use going against the negative sentiment at the moment.

Heaps of marketing speak but note that the company (or rather, directors & management) actually cut back marketing spend by 20% - something that Jayne believed in her strategic review that they should increase to protect ATM's market positioning.

[YoungBull]

I am personally a long term holder, but I’m definitely not driven by emotion. I’m trying to approach this as rationally as I can, but I don’t have a huge amount of market experience. The struggle that I am having is that

A) on the one hand the best profits are made by those who have the nerves to hold and buy during company down turns. Buffet famously bought Coca Cola at a time where they were dumping huge amounts of bad product into the ocean somewhere in Asia, as a step towards a product line had failed, management was failing and being replaced etc.

B) But on the other hand I completely understand there is a difference between having nerves and holding onto a dead fish. You need to exit the company when exiting is required.

The difficulty is that for me A2 is dancing between these two. The economic moat for me is their premium brand. They have lots of cash on hand, I don’t see bankruptcy as a risk. The biggest risk is therefore as you all say increasing competition and a loss of the requirement for a ‘premium’ offering by the Asian community. The struggle is for me to exit the company I want to see definitive evidence that the competition is eroding their market share substantially (I would be okay with a small erosion as the market is so large). The trouble is this management, on the basis of their reporting lately, is not going to be very candid about the severity of erosion by competition. The other difficulty is that realising too late that competition is significantly eroding the market share can mean you are taking a much larger loss than if you had taken earlier action on less information. On the counter you risk acting on something that never eventuates.

Therefore as a long term holder, I am going to continue to hold until I see more concrete evidence that competition is absolutely killing A2. Some of the wiser investors in this forum are going to tell me that the evidence is right in front of my face and it’s glaringly obvious, but this is the risk I am taking as an inexperienced investor. We all have to take our lick at some point and learn from it.

[see weed]

Yep, it’s a shame. Many have left this thread permanently for these reasons. Will just let them go at it today, they can just reply to themselves all day. I think you’d be hard pressed to find many long term holders still present here.
I am still here.

[Gregnz]

I am still here.

might just be you and me.

[Balance]

might just be you and me.

Garbage - have a look at users (162) currently browsing the thread.

[777]

And me. Biggest problem today is what price to buy at.

[alokdhir]

I am surprised to see today very proactive ATM NZ investors trying to sell as many ATM at the opening at rock bottom prices ...think they are trying to outsmart their ozzy cousins ...maybe they will still have the last laugh ...:eek2:

[DownTownJr]

And me. Biggest problem today is what price to buy at.

Or when to sell...

[777]

Or when to sell...

Lock in your losses if you wish.

[Gregnz]

I’m going to take the risk that it’s a market over reaction and add a few more on open.

[alokdhir]

OUCHHHH ...open $ 9.50 ...:scared:

[allfromacell]

I've never seen the buy side so thin with this share.

[alokdhir]

OUCHHHH ...open $ 9.50 ...:scared:

Even buyer at $ 3 can be seen in the depth ....:scared:

[bull....]

next area of support on the charts looks like 7.60 - 8 previous area of congestion from 2017

[silu]

Heaps of marketing speak but note that the company (or rather, directors & management) actually cut back marketing spend by 20% - something that Jayne believed in her strategic review that they should increase to protect ATM's market positioning.

In hindsight I should have sold when they got rid of Jayne. I believed her strategy was the right one.

[bull....]

In hindsight I should have sold when they got rid of Jayne. I believed her strategy was the right one.

i was a jane fan too. we were among the minority on that one on this forum as most were all singing geoff return as the messiah has returned

[dreamcatcher]

Not a bad post @YoungBull good on you for making a decision that suits you. Think about adding the previous Aust Daigou trading back to result.

I'm still here makes three.............

[alokdhir]

next area of support on the charts looks like 7.60 - 8 previous area of congestion from 2017

When to buy for a dead cat bounce ...it always happens for ATM ...all 3 previous big drops lead to dead cat bounce ...so this time also very possible...8.80 -9.20 zone....??

[Balance]

Not a bad post @YoungBull good on you for making a decision that suits you. Think about adding the previous Aust Daigou trading back to result.

I'm still here makes three.............

There are plenty who have taken note of the warnings from the 3 Bs and got out.

I have personally received thank you messages from them.

Too bad for those who think they know better.

[winner69]

i was a jane fan too. we were among the minority on that one on this forum as most were all singing geoff return as the messiah has returned

Gone downhill since Jayne left --- company performance

Said many times bring Geoff back a big mistake - caretaker whose past best by date when company need drive

Chairman Hearn has a lot to answer for

His resignation should be coming soon

I take it Chairman Hearn is still ensconced in the UK?

[bull....]

When to buy for a dead cat bounce ...it always happens for ATM ...all 3 previous big drops lead to dead cat bounce ...so this time also very possible...8.80 -9.20 zone....??

thats the thing the stock price will just keep tracking down till price eventually catches up with fundamentals. it will only go up if the fundamental picture changes.
the management seem to think its just around the corner so i hope there right or it be like you say dead cat bounces

[alokdhir]

thats the thing the stock price will just keep tracking down till price eventually catches up with fundamentals. it will only go up if the fundamental picture changes.
the management seem to think its just around the corner so i hope there right or it be like you say dead cat bounces

I think it bounces from 20% down levels ...so around $ 8.80 I can try to get some juice out of it ...

Also I think its nearing long term buy levels ...can reward in a big way if u have 2-3 years perspective

[Balance]

Gone downhill since Jayne left --- company performance

Said many times bring Geoff back a big mistake - caretaker whose past best by date when company need drive

Chairman Hearn has a lot to answer for

His resignation should be coming soon

I take it Chairman Hearn is still ensconced in the UK?

Did they (Hearn, Geoff, Nathan etc etc) not do well, selling all those shares near the top of the market a month before the first downgrade?

Sell when directors and management sell - many did so on the ASX and boy, they read the management so well!

[see weed]

Funny how things go. Looking back to 20/2/18 bought 21,000 @ $9.30 and sold them the next morning for $11. That makes me smile.:)

[Balance]

Also I think its nearing long term buy levels ...can reward in a big way if u have 2-3 years perspective

That's what some were saying after the first downgrade.

I recall it well.

[winner69]

So full year ebitda going to be about $336m - down $214m on last year (about 40%)

Sales being down 20% account for about half of the $214m

But the real killer is the significamyly margin - reason behind the other half of the lower ebitda

Sales decline compounded by lower margins - ouch

[bull....]

Gone downhill since Jayne left --- company performance

Said many times bring Geoff back a big mistake - caretaker whose past best by date when company need drive

Chairman Hearn has a lot to answer for

His resignation should be coming soon

I take it Chairman Hearn is still ensconced in the UK?

geoff's good but thats why he wanted jane because she's good at marketing and taking a2 to the next level. hearn f..cked up

[YoungBull]

I think the difficulty with this is you’re assuming your analysis is already correct based on these short term price fluctuations, fluctuations which have been driven by all sorts of emotions. No one said that they think they know better, I’m just wanting more evidence to strengthen my decision for the long long term. You have commented several times on the bad emotion involved with this stock, but I note a lot of your responses are directed to the behaviour of other investors, which in itself means you are very emotionally involved. The fact that you take other people deciding to hold instead of sell as being a statement against you personally shows that you too are not immune to emotion 😉

Exit: in response to balance

[alokdhir]

So full year ebitda going to be about $336m - down $214m on last year (about 40%)

Sales being down 20% account for about half of the $214m

But the real killer is the significamyly margin - reason behind the other half of the lower ebitda

Sales decline compounded by lower margins - ouch

Thats the most worrying part ...loosing sales but keeping your margins is understandable ...as sales can be recaptured much faster when environment improves ...but margins not easy to recapture back as it seems they diluting their brand premium for buying revenue to show something in results

They still blaming this on less sales so margins less as fixed costs high ...but its not that simple ...they giving some back to show reasonable sales may be the truer picture

[Entrep]

Do any of the Council of Bs have a price at which they would be interested?

[alokdhir]

Do any of the Council of Bs have a price at which they would be interested?

All say around $ 6 ...so safely can invest around $ 8.50 ....IMHO :D

[winner69]

Bit of a surprise operating cash flow was negative (compared to +$160m pcp)

[Balance]

I think the difficulty with this is you’re assuming your analysis is already correct based on these short term price fluctuations, fluctuations which have been driven by all sorts of emotions. No one said that they think they know better, I’m just wanting more evidence to strengthen my decision for the long long term. You have commented several times on the bad emotion involved with this stock, but I note a lot of your responses are directed to the behaviour of other investors, which in itself means you are very emotionally involved. The fact that you take other people deciding to hold instead of sell as being a statement against you personally shows that you too are not immune to emotion 😉

Exit: in response to balance

Downgrades come in 3s, YoungBull. Lock that away.

In ATM’s case, I predict there will be another downgrade within the next 3 months once the new CEO has had a chance to really get his feet under the desk.

[Balance]

Do any of the Council of Bs have a price at which they would be interested?

Wait for the next downgrade - new CEO will want to well and truly clean out the cupboards, hire his own people and do a strategy reset.

Going to be heaps more expenses to be incurred in the year ahead.

His catch cry will be : ‘Short term pain for long term gain.’

Sounds like Jayne?

[dreamcatcher]

There are plenty who have taken note of the warnings from the 3 Bs and got out.

I have personally received thank you messages from them.

Too bad for those who think they know better.

Good on you @Balance you are a true champion...........

[winner69]

Thats the most worrying part ...loosing sales but keeping your margins is understandable ...as sales can be recaptured much faster when environment improves ...but margins not easy to recapture back as it seems they diluting their brand premium for buying revenue to show something in results

They still blaming this on less sales so margins less as fixed costs high ...but its not that simple ...they giving some back to show reasonable sales may be the truer picture

The margin problem all at Gross Margin level - probably all selling price related

Expenses were down $31m on pcp - a big chunk of that marketing

[Balance]

The margin problem all at Gross Margin level - probably all selling price related

Expenses were down $31m on pcp - a big chunk of that marketing

All that cash in the bank and they were pre-occupied with how NOT to spend it rather than spend it effectively, as Jayne wanted to do in marketing & promotion.

[imarktu]

As a bag holder at $21.40, I am also still here. Using this as an opportunity to watch and learn - has been really interesting to observe the discourse here.
Personally I'll probably look to top up at some point, perhaps around the $8 mark if (when?) it gets to that.

[Bjauck]

Wait for the next downgrade - new CEO will want to well and truly clean out the cupboards, hire his own people and do a strategy reset.

Going to be heaps more expenses to be incurred in the year ahead.

His catch cry will be : ‘Short term pain for long term gain.’

Sounds like Jayne? This had a share price that was full of froth for a couple years. At least there is no dividend to cut. Unfortunately I had not reduced my holding enough.

[bull....]

As a bag holder at $21.40, I am also still here. Using this as an opportunity to watch and learn - has been really interesting to observe the discourse here.
Personally I'll probably look to top up at some point, perhaps around the $8 mark if (when?) it gets to that.

not as if they are going to go bust , the million dollar question though is what is a good price to top up ?

[Waltzing]

3 baritone's or 3 basses ....

[Rawz]

Lots traded. It was at $4m turnover. I then came back 20mins later and refreshed to see $19m turnover.
A heap keen to sell. And a heap keen to buy.

[TLM54]

People are starting to cover their positions

[Ohdoyle]

Will be interesting to see what those shorting do today. That's another que to watch. I wonder whether they have been exiting their positions or doubling down. Guess I will find out next week.

I sold most my position this morning at a loss of 15 percent.

I mainly purchased this on the back of morning star analysis. The contrarion in me decided morning star cant be wrong about every stock. Haha but looks like they proved me wrong.

I kept 300 shares just for curiosities sake. I think that's the biggest loss I have ever turned from paper to real. It definitely hurts but serves me right for investing in something I had no real conviction for or insight into.

[jonu]

Lots traded. It was at $4m turnover. I then came back 20mins later and refreshed to see $19m turnover.
A heap keen to sell. And a heap keen to buy.

Most of the volume has been offmarket at $9.20.

The bounce will really kick in as we approach ASX open.

Discl. Bought this morning at $9.15

[Waltzing]

"I think that's the biggest loss I have ever turned from paper to real"

...lived to trade another day.

under fire.. the only way to go...

[Rawz]

Will be interesting to see what those shorting do today. That's another que to watch. I wonder whether they have been exiting their positions or doubling down. Guess I will find out next week.

I sold most my position this morning at a loss of 15 percent.

I mainly purchased this on the back of morning star analysis. The contrarion in me decided morning star cant be wrong about every stock. Haha but looks like they proved me wrong.

I kept 300 shares just for curiosities sake. I think that's the biggest loss I have ever turned from paper to real. It definitely hurts but serves me right for investing in something I had no real conviction for or insight into.

This is pretty much my exact story but it played out on the 2nd downgrade and I sold the lot. I moved the funds to other stocks and made back the loss plus heaps more.

If like you say you don't have any conviction you'll feel much better for flushing the dunny and moving on IMO.

If you like A2 and believe in the company you will be content with holding and buying more.

[imarktu]

not as if they are going to go bust , the million dollar question though is what is a good price to top up ?

Well, considering I've topped up various times between $20 and $13, I think the million dollar answer is "I have absolutely no idea". :t_up:

[tomm]

Be Greedy when others are fearfull...:t_up:
Warren Buffett.

[alokdhir]

Maybe after Australia open ...our folks in NZ are always more optimistic ...lol

But IMHO it will slowly grind down to earlier projected levels of $ 9 based on TA

I was thinking slow grind to $ 9 ...but it reached there in 15 minutes ...looks like ATM investors believe in fast action either way ..:cool:

[alokdhir]

Be Greedy when others are fearfull...:t_up:
Warren Buffett.

Thats what I am doing to FPH ...maybe need do to ATM too, soon ...Need direct link between RBNZ and my account though :D

[dreamcatcher]

If you like A2 and believe in the company you will be content with holding and buying more.

That's very true as some early holders are basically free-held or close too a bit like a shorter in reverse.

Add a few when SP goes south watching the panic without fear of losses.

[Habits]

Its time i quit this company ... fishing in another (effluent) pond so to speak and switching to fonterra fsf instead. This morning they issued a small rise in eps outlook... who would have thought this six months ago.

[Lion_graf]

40% down and looking to drop further. I was seriously considering exiting yesterday and couldn't bring myself to do it. I guess I'll continue to hold for the next 3-4 years 😕

[Gregnz]

Been a great trading stock this morning $$

[Joshuatree]

Hope you're not being influenced by Couta on H/C. He is great example why not to have all/most of your eggs in one basket.

[Gregnz]

Hope you're not being influenced by Couta on H/C. He is great example why not to have all/most of your eggs in one basket.

Have a very diversified portfolio. Bought a decent sized chunk of ATM this morning at $9.17, offloaded them at $9.80. Hence a great trading stock this morning.

[bull....]

the aussies are not happy with this result

[porkandpuha]

Hope you're not being influenced by Couta on H/C. He is great example why not to have all/most of your eggs in one basket.

Yet strangely nobody was saying this from 2016 through to 2020.

[Mr Slothbear]

Results not good but pretty much exactly as we expected. Going to have to wait for august to really see how thing are. Have increased my holding this morning at a good price. In this for the long run.

is interesting to wonder in an alternate universe how things would’ve gone with Jaynes strategy but neither here nor there. I truly do feel the difference drinking A2 and I drink a lot of it. I see a long runway for growth in china but I see some trials and tribulations over the next 1 to 2 years before we see the light and be rewarded

[Balance]

Yet strangely nobody was saying this from 2016 through to 2020.

Stock was on an uptrend vs a clear & accelerating downtrend in the last 5 months.

[Gregnz]

Yet strangely nobody was saying this from 2016 through to 2020.

Two faced comes to mind. Happy to take advice when times are good, gee if they had put all their eggs in one basket and bought into ATM in 2016, those were impressive returns!! When those good times change as a result of a one in one hundred year event (pandemic), suddenly that advice changes. Many are two faced unfortunately, happy to take the advice when it works in their favour, but happy to dish out the criticism when times change.

[Lease]

Frankly to say, a2 is quite honest. AUS/NZ sales down over 30% because of daigou disruption. If this part could be recovered, A2 would be still an excellent company to invest.

[Gregnz]

And as I said earlier, amazing trading stock today! Incredible. Crickey, at this rate, I might be able to almost eliminate the losses I had from the parcel of shares I bought at $15.06.

[Joshuatree]

Yet strangely nobody was saying this from 2016 through to 2020.

Its a basic golden rule of investing p&p, being diversified. My risk and reward situ is more to protect my gains rather then taking huge risks at this point/age in my life. Longterm it may come right . I hold a tiny parcel in my portfolio and will review whether to keep it or sell.

[Joshuatree]

Two faced comes to mind. Happy to take advice when times are good, gee if they had put all their eggs in one basket and bought into ATM in 2016, those were impressive returns!! When those good times change as a result of a one in one hundred year event (pandemic), suddenly that advice changes. Many are two faced unfortunately, happy to take the advice when it works in their favour, but happy to dish out the criticism when times change.

Great way to make $1000,000 ,start with $5,000,000. Hope its your own money your'e gambling with and you dont take anyone else down with you, but hey who cares.;)

[Balance]

Two faced comes to mind. Happy to take advice when times are good, gee if they had put all their eggs in one basket and bought into ATM in 2016, those were impressive returns!! When those good times change as a result of a one in one hundred year event (pandemic), suddenly that advice changes. Many are two faced unfortunately, happy to take the advice when it works in their favour, but happy to dish out the criticism when times change.

Fools venture where angels dare not venture.

One in a hundred year event has made some companies and unmake others - ATM’s problems are deeper than just daigou as the Craig’s note two days ago alerted to.

[Gregnz]

Great way to make $1000,000 ,start with $5,000,000. Hope its your own money your'e gambling with and you dont take anyone else down with you, but hey who cares.;)

Really? You do realise what the returns were if you'd invested $100,000 in ATM in 2016?
But yes a pandemic came along, and suddenly those who told you to invest in 2016, generating returns not seen elsewhere, and suddenly you treat them as the scum of the earth for not selling out at the top and believing in the long term trajectory of the company?

[Balance]

Nice volume going through - shorters are covering and providing short term price support.

[Gregnz]

Fools venture where angels dare not venture.

One in a hundred year event has made some companies and unmake others - ATM’s problems are deeper than just daigou as the Craig’s note two days ago alerted to.

Balance, its very easy to be critical when you've never dipped your toe in the water.

Right, off for a break from the forum, will let you discuss among yourselves. You're good company for each other.

[Balance]

Balance, its very easy to be critical when you've never dipped your toe in the water.

Right, off for a break from the forum, will let you discuss among yourselves. You're good company for each other.

Made very good money on ATM by selling out high when Jayne was told to go and on the first downgrade.

The rest is history.

[Gregnz]

Made very good money on ATM by selling out high when Jayne was told to go and on the first downgrade.

The rest is history.

Today was a great opportunity to dip that toe in again. Buy at $9.17, sell at $9.80. Buy at $8.96, sell at $9.52.

[Balance]

Today was a great opportunity to dip that toe in again. Buy at $9.17, sell at $9.80. Buy at $8.96, sell at $9.52.

Good on you and well done!

But that’s not my game.

[winner69]

First half ebitda margin 26.4% and from guidance H2 ebitda margin will be about 21%

Wouldn't want margins to stay this low.

[alokdhir]

First half ebitda margin 26.4% and from guidance H2 ebitda margin will be about 21%

Wouldn't want margins to stay this low.

U have nailed the real and main problem buddy ...thats what I was saying many times ...its not just covid problem anymore ...their brand strength has been exposed fully in this difficult time

[Joshuatree]

Really? You do realise what the returns were if you'd invested $100,000 in ATM in 2016?
But yes a pandemic came along, and suddenly those who told you to invest in 2016, generating returns not seen elsewhere, and suddenly you treat them as the scum of the earth for not selling out at the top and believing in the long term trajectory of the company?

Scum, your word bud.Use some soap. I object to anyone who thinks they are the self appointed advisor/expert and that people do what they do; and ramp, pump the hell out of a stock , big noting all the way.These people need to be held to account.

[Balance]

U have nailed the real and main problem buddy ...thats what I was saying many times ...its not just covid problem anymore ...their brand strength has been exposed fully in this difficult time

ATM IF $44

Karicare A2 IF $29.95

Puts the margin erosion issue starkly in focus.

[bottomfeeder]

Today was a great opportunity to dip that toe in again. Buy at $9.17, sell at $9.80. Buy at $8.96, sell at $9.52.

I didn't quite get the best trades you did today, but a bit similar. Effectively I made up some money on the holding loss on the shares I had, booked up a tax loss on trading using FIFO, and still hold the same number of shares at a lower cost. Seemed like a semi decent day for me. Still need a long term gain though. Hey, it makes sense to me.

[dreamcatcher]

ATM IF $44

Karicare A2 IF $29.95

Puts the margin erosion issue starkly in focus.

Please put some numbers up for karicare sales so we can compare volume

[nztx]

I was thinking slow grind to $ 9 ...but it reached there in 15 minutes ...looks like ATM investors believe in fast action either way ..:cool:

fast action up the other way a possibility now .. must be a few out there with their bicycle pumps in hand at current SP levels .. ;)

[nztx]

And as I said earlier, amazing trading stock today! Incredible. Crickey, at this rate, I might be able to almost eliminate the losses I had from the parcel of shares I bought at $15.06.


Yessssss I see red on ledger like that from past forays toooo - same strategy :)

be a bit of a Shorter's delight today I guess for those who picked it ..

[porkandpuha]

Its a basic golden rule of investing p&p, being diversified. My risk and reward situ is more to protect my gains rather then taking huge risks at this point/age in my life. Longterm it may come right . I hold a tiny parcel in my portfolio and will review whether to keep it or sell.

Its a basic golden rule of *your* investing. One that Buffet often kicks back on too. Not saying you are wrong, but even you alluded to it yourself that the risk/reward you seek is specific to your own point/age in life. My point is if Coutta, among others, diversifed for the sake of diversifying from 2016 through to 2020 they would have missed the crazy growth. It goes both ways.

[Balance]

Nice volume going through - shorters are covering and providing short term price support.

19m shares done on ASX so far - looks like many ‘long term’ holders fleeing out and they must be grateful that the shorters are there to take their stock!

So what happens when the shorters stop covering?

[777]

So what happens when the shorters stop covering?

I'm sure you will tell us.

[longy]

Me too...still holding...I don't post much as don't have much to add. Me hoping vaccine works, border reopen, traveling resume and blue sky once more.

[Ferg]

I think that's the biggest loss I have ever turned from paper to real.

Here you go Ohdoyle. Something to cheer you up.

https://imgflip.com/i/4zdire (https://imgflip.com/i/4zdi97)

12341

[JohnnyTheHorse]

Besides the old adage of downgrades come in threes, here are a couple of tips for people to consider for stocks in monthly downtrends. Hopefully helps people learn.

- If holding, use a stoploss. Don't think that it can't get any worse, because it certainly can of often does. There were several very clear stoploss levels on a2 on the way down. E.g. After many attempts and failures at breaking AU$20, the clear stop loss was AU$17 (being the previous monthly higher low).

- If looking to buy, wait for a confirmed weekly uptrend and place a stoploss below the low. Do not try to pick the bottom! a2 has not been in a weekly uptrend, hence you should not have bought on the way down thinking it's cheap.

Feel free to PM if you wan to discuss further.

[Balance]

19m shares done on ASX so far - looks like many ‘long term’ holders fleeing out and they must be grateful that the shorters are there to take their stock!

So what happens when the shorters stop covering?

Impressive turnover on ASX (where it really counts instead of the NZX which is just a 'shunt' market) - 30m shares.

The analysts & brokers will be scrambling to adjust their forecasts after the third downgrade today so what will the next few days bring?

Not much credibility left in their forecasts as it's clear they blindly follow the company's guidance, guidance which is increasingly looking like stabs in the dark.

So will new CEO take a more considered & measured stab at F21 & F22 forecasts & initiate a fourth and savage downgrade?

[carrom74]

The last time Atm was in this price range was back in 2018 where they made $977m revenue. Now they are forecasting $1.4b with focus on finding and growing in new markets(us/canada etc). I know this stock”s price is based on historical exponential growth trajectory. But i am still finding it a bit strange on how the price gets slaughtered on already known facts(second downgrade).today’s volume is about 5%of the equity (approx)- ASX and NZX combined.

[Beagle]

Impressive turnover on ASX (where it really counts instead of the NZX which is just a 'shunt' market) - 30m shares.

The analysts & brokers will be scrambling to adjust their forecasts after the third downgrade today so what will the next few days bring?

Not much credibility left in their forecasts as it's clear they blindly follow the company's guidance, guidance which is increasingly looking like stabs in the dark.

So will new CEO take a more considered & measured stab at F21 & F22 forecasts & initiate a fourth and savage downgrade?

Well done mate. Downgrades almost always come in three's is something you know I have supported you on for many, many months with this one.
I see eps of approx 31 cps based on today's downgrade but I agree, the chance of another downgrade is very real and certainly more likely than not in my opinion.

My sense with this one is the brand value, IP and business case keeps getting weaker and weaker with every update. Pricing power and margins keep getting eroded at quite an alarming pace. I think growth in the future is going to be incredibly expensive to achieve in terms of marketing spend and will be far, far more modest than it ever has been in the past.

It appears A2 milk is steadily heading towards just being another common and everyday commodity with widespread brand proliferation, which undoubtedly will further reduce ATM margins in the future. First mover advantage only lasts so long...and then its gone.

ATM is yesterday's growth stock that's still priced on a forward PE of more than 30, (even after today's share price drop), like its going to resume growing strongly in the very near future. That's very unlikely in my opinion. I am happy to stay out and would never contemplate buying on a steep confirmed downtrend until a definite confirmed new base and new uptrend has been established. I don't believe that's going to happen anytime soon.

[Habits]

Well done mate. Downgrades almost always come in three's is something you know I have supported you on for many, many months with this one.
I see eps of approx 31 cps based on today's downgrade but I agree, the chance of another downgrade is very real and certainly more likely than not in my opinion.
To me the brand value, IP and business case keeps getting weaker and weaker with every update. Pricing power and margins keep getting eroded at quite considerable pace.
I think growth in the future is going to be incredibly expensive to achieve in terms of marketing spend and will be far, far more modest than it ever has been in the past.
I think A2 milk is steadily heading towards just being another common and everyday commodity with widespread brand proliferation further reducing ATM margins in the future.
First mover advantage only lasts so long...and then its gone.

Reading this assessment I get the impressions: Heading south... more stampedes

[winner69]

Guy from Hamilton Hinden not all that despondent -

He said the company remains confident in the underlying fundamentals of the business and would continue to invest in the brand and in its capability to drive long-term growth.

Its liquid milk businesses in Australia, its United States business and its Chinese-label milk formula business all increased revenue in the first half.

”There are some positives to be taken out of the growth that they are getting,” Davies said. ”Long term, the brand they have cultivated over the years is still very very strong.”

https://www.stuff.co.nz/business/124349465/shares-in-a2-milk-tumble-after-firsthalf-profit-falls-35-and-outlook-weakens

[Baa_Baa]

Well done those who picked another downgrade, clearly ATM don't yet have a grip on their sales channels post covid, or expenses supplying their market in current state, or stock levels. Lots of things to fix. Yet. Still, they make a sh1tload of money.

That said, my opening stake is underwater but my second entry today is above, so far. I'm not talking about mortgaging the house or taking leverage on this, but I'm happy to take advantage of price weakness.

ATM aren't going out of business, $1.4b rev forecast, truckloads of cash in the bank and still very profitable with growing ancilliary markets.

Clearly it's not for some, but to use a cliche, "when others are fearful".

GLTAH. Investing is about the future. Just depends on how far into the future you look, and what you're prepared to pay for part of that future.

[Beagle]

Well done those who picked another downgrade, clearly ATM don't yet have a grip on their sales channels post covid, or expenses supplying their market in current state, or stock levels. Lots of things to fix. Yet. Still, they make a sh1tload of money.

That said, my opening stake is underwater but my second entry today is above, so far. I'm not talking about mortgaging the house or taking leverage on this, but I'm happy to take advantage of price weakness.

ATM aren't going out of business, $1.4b rev forecast, truckloads of cash in the bank and still very profitable with growing ancilliary markets.

Clearly it's not for some, but to use a cliche, "when others are fearful".

GLTAH. Investing is about the future. Just depends on how far into the future you look, and what you're prepared to pay for part of that future.

Understood you taking a modest position with a very tight stop when it broke up through the 30 day MA as TA clearly signaled a possible new uptrend forming but I'm sorry mate I'm a bit confused here...you've lost me with the rationale behind the TA now ?

I would have thought you would have been stopped out with your tight stop and left it at that as a losing trade, accepting one never wins every time and taken a step back and been philosophical about it.

We have a very clear downtrend for some 7 months now from $21.74. I doubt the TA legends Hoop or KW would touch this with a 40 foot barge pole. Good luck though mate, I think you are going to need it to get out of this hole.

Speaking of holes...ATM dragged the index into 10%+ correction territory today https://www.goodreturns.co.nz/article/976518207/a2-sends-nzx-50-to-4-month-low.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+25+Feb+ 2021

[Biscuit]

.......still very profitable with growing ancilliary markets.

........Just depends on how far into the future you look....


They are profitable but with negative operating cashflow. That's not a good sign. The future's never rosy if you are bleeding cash.

[longy]

They are profitable but with negative operating cashflow. That's not a good sign. The future's never rosy if you are bleeding cash.

Please correct me if I am wrong but did they just bought a factory or two?

[winner69]

Please correct me if I am wrong but did they just bought a factory or two?

Operating Cash Flow was negative $10m v last year positive $160m.

That’s day to day stuff and then they spent more on Synlait rights issue and few other investment things

Haven’t spent cash on big factory’s yet

[Dassets]

So ATM now looks like it may drop out of the ASX50. Looks like only 1 indexer fund using that so quite small selling if that happens but still shows the emerging capital markets issues these guys facing.

[alokdhir]

After reading all the posts here ...some emotional ...some rational ...some hopeful ...some spiteful

ATM is in a big downtrend ....no doubt

When it will turn around if it will ? Will it reach past glory if it turns around ?

Very difficult questions to answer with any degree of certainty

So best u can do if u want to invest now or hold is have faith in the story and management

Past bad times have shown me that management is not investor friendly also they are not as savvy as we think them to be ...hopefully new CEO will add some value to already written off team ...mind u ...thats hope not reality as yet

Story is also showing some holes ...as other A2 milk brands are increasing competition in a lucrative market thus making big margins in their business a thing of the past ...Brand strength is only on paper as per me

Keeping above in mind I will prefer to stay away as dont have enough reasons to take a punt here ...

Disclosure : Followed KFL in and then followed them out in early Dec. at a loss :eek2:

[sb9]

Well done those who picked another downgrade, clearly ATM don't yet have a grip on their sales channels post covid, or expenses supplying their market in current state, or stock levels. Lots of things to fix. Yet. Still, they make a sh1tload of money.

That said, my opening stake is underwater but my second entry today is above, so far. I'm not talking about mortgaging the house or taking leverage on this, but I'm happy to take advantage of price weakness.

ATM aren't going out of business, $1.4b rev forecast, truckloads of cash in the bank and still very profitable with growing ancilliary markets.

Clearly it's not for some, but to use a cliche, "when others are fearful".

GLTAH. Investing is about the future. Just depends on how far into the future you look, and what you're prepared to pay for part of that future.

Yes, not a great report unfortunately. However, its a good opportunity for new CEO to reset long term strategy that is more sustainable which can withstand calamities like COVID and other disasters. If he can steer the ship back to previous levels, there is a big reward for him in the wings.

I said before and say it again "time's is up for Mr Hearn, he needs to go...."

[Nor]

Seems like a crazy business model. People stuffing cans of infant formula in their person luggage or bundling it up and posting it.

[Balance]

Story is also showing some holes ...as other A2 milk brands are increasing competition in a lucrative market thus making big margins in their business a thing of the past ...Brand strength is only on paper as per me

Keeping above in mind I will prefer to stay away as dont have enough reasons to take a punt here ...

Disclosure : Followed KFL in and then followed them out in early Dec. at a loss :eek2:

KFL did well, getting out when they did - cut their losses while many in the market were still dreamy about the share price going back to $20 one day.

Meanwhile, it is clear from the Craig's update that the writing was on the wall for those who care to read & digest the bad news :


Stephen Ridgewell published and extensive preview overnight in advance of the ATM 1H21 result on Thursday. The result is pre-guided with $181m of EBITDA expected although the key questions for Ridgewell is whether ATM can provide confidence that revenue and margin trends are stabilising sequentially and also whether ATM can diversify its channels to market and defend its brand premium under new CEO David Bortolussi. Clarity on the latter question will take some time, although feedback from our proprietary large daigou contacts suggest that the sequential sales snap back is yet to eventuate. The issues around this important channel are multifaceted but can be best summarised as follows:

· Volumes declining - volume trends have worsened in early 2021 with Jan sales -70% yoy (vs. -55% yoy in the Dec qtr) with a much smaller than normal increase in demand ahead of the Chinese New Year period (chart 1)

· ATM’s daigou market share has eased – ATM has gone from market share gainer in 2018/19 to holding relative share versus other key daigou brands such as Danone’s Aptamil.

· Eroding Price Premiums – The decline in ATM’s price point benchmarked to 1 January 2020 has been more severe than other major brands which could reflect inventory overstocking but also greater A2 only competition (see Feihe’s A2 launch below).

· Price cuts have struggled to trickle down – ATM alluded to some prices cuts to restore daigou margins although feedback suggests that these have not yet been passed on from wholesale to large daigou.

· Brand spend needs to increase – Feedback suggests that ATM has become much harder to sell with daigou commenting that in addition to price cuts they want ATM to increase brand spend.

ATM’s current challenges reflect a mix of industry headwinds but also ATM specific issues. International brand market share has fallen from 56% to 49% over the past two years, driven by i) food safety concerns with consumers concerned about the risk of catching COVID from imported tins ii) regulations that support domestic brands iii) greater nationalism and iv) increasing competition as domestic brands more aggressively target tier 1 & 2 cities. This however does not explain why ATM’s history of gaining share appears to have halted. Whatever the primary driver, as Ridgewell indicates, ATM’s over-reliance on the daigou channel also means it has been more impacted by its collapse. With this in mind we now expect ATM to deliver FY21e EBITDA of $387m, at the low end of the guidance range ($364m - $450m, midpoint $406m) and with the PER still elevated at 31x we prefer to sit on the side-lines at these levels. Neutral rating retained with an updated TP -9% to $10.63 …"

Everything points towards the glory days of ATM fading rapidly in the face of competition (refer Craig's note above) and gross mismanagement :

- Getting rid of Jayne as the board preferred short term sp performance over long term strategic positioning,

- Appointing a self-acknowledged 'been there, done that and need someone else for the job' ex CEO,

- Losing key marketing & promotional executives,

- Chairman directing the board & management of a multi-billion dollar company from outside the company's three principal hubs of activities - NZ, Australia & China.

A company with management who have no clue about how its single biggest market (daigou) is performing - massive inventory pileup (& writing off $22m of expired inventory), loss of market share, having to discount and provide additional financial support - what does that say to you about the state of this company?

Cash rich (for sure) but fat, lazy & grossly mismanaged with executives gouging on benefits and share sales - it has all been too easy.

[Entrep]

Seems like a crazy business model. People stuffing cans of infant formula in their person luggage or bundling it up and posting it.

hahah yeah I have been thinking the same thing

[Akane]

I'm calling it now, it's going to go sideways for a VERY LONG TIME with blips downwards every now and then. I stand by my original value of $8, possibly dipping to $6.
I'm holding this till it withers away, hope this is a good daily reminder of how I screwed up buying on hype.

[Balance]

I'm calling it now, it's going to go sideways for a VERY LONG TIME with blips downwards every now and then. I stand by my original value of $8, possibly dipping to $6.
I'm holding this till it withers away, hope this is a good daily reminder of how I screwed up buying on hype.

Nothing wrong with the business model - except that ATM did not move fast enough (as Jayne wanted) to diversify distribution channels & leverage successfully off the huge market established via the daigou.

Have a read of how Comvita has repositioned their sales reliance on daigou successfully.

[Biscuit]

....... massive inventory pileup (& writing off $22m of expired inventory), loss of market share, having to discount and provide additional financial support -.......

So the profit margin is down - does that take into account the write down on expired inventory? Does it take into account the unsold inventory? Serious question. Are we looking a falling sales margins or just falling profit margins?

[Baa_Baa]

Will be interesting to see what the broker analysts make of the results and future, commentaries should flow fairly quickly from now.

[JohnnyTheHorse]

Will be interesting to see what the broker analysts make of the results and future, commentaries should flow fairly quickly from now.

Problem is that nearly none of the broker report I've read have actually put decent work into their report. They have just based it off the company announcement, then keep revising their price down on each announcement.

There is still huge room for further margin compression going forward due to increasing competition, high milk price and currency. I think this is going to seriously impact future earnings potential.

[tomm]

Will be interesting to see what the broker analysts make of the results and future, commentaries should flow fairly quickly from now.
Jarden put a $11.40 on ATM this morning also.
It is gonna be an interesting day, they give an extra 45 mins to trade today.

[see weed]

Not going down as fast as yesterday. Anybody buying in at this level for a quick day trade or waiting to see where Aussi takes us?

[tomm]

Not going down as fast as yesterday. Anybody buying in at this level for a quick day trade or waiting to see where Aussi takes us?
It was traded by more than 37 Mil of shares changed hand yesterday on ASX, I have never seen anything like that yesterday, it is clearly indicates a strong support level for A2 I suggest.

[whatsup]

Dipped my toe into ATM @ 9.15 ( 2200 ) is this the bottom, hope I dont get slaughtered once Aussie opens !

I think ATM is way over sold !

[sb9]

https://assets-au-01.kc-usercontent.com/bca3e5d5-83bd-02bf-1c27-acb036630e5b/df2ee78f-aff8-4dcc-a018-2220f8212124/The%20a2%20Milk%20Company%20Limited%20-%20HY21%20Results%20-%20Analyst%20Q&A%20-%2010011881%20-%20250221.mp3

Analysts investor conference call link from y'day following release of HY results for those that're keen to know more...very insightful.

[alokdhir]

Jarden put a $11.40 on ATM this morning also.
It is gonna be an interesting day, they give an extra 45 mins to trade today.

45 mins extra ??? Is it Index rebalancing day ??

[tomm]

45 mins extra ??? Is it Index rebalancing day ??
yes, it is.

[Balance]

It was traded by more than 37 Mil of shares changed hand yesterday on ASX, I have never seen anything like that yesterday, it is clearly indicates a strong support level for A2 I suggest.

Strong support level?

Short covering and the smart money is taking the opportunity to get the hell out before the fourth downgrade.

[tomm]

Strong support level?

Short covering and the smart money is taking the opportunity to get the hell out before the fourth downgrade.
You won't know whether short are covering or not yesterday untill 4 days later.
there must be one (distrust) and another one (trust) to get those shares throught. :t_up:
If people don't trust: SELL NOW .and do not nagging unless you do believe in the company but pretending to be a down ramper to get a cheap entry.
People with trust : Buy Now .

[Balance]

there must be one (distrust) and another one (trust) to get those shares throught. :t_up:

Do you understand short coverings?

[tomm]

Do you understand short coverings?
I am absolutely understand that , but you need to come back to me in 3 days for the data to be available to confirm that.

[Baa_Baa]

Understood you taking a modest position with a very tight stop when it broke up through the 30 day MA as TA clearly signaled a possible new uptrend forming but I'm sorry mate I'm a bit confused here...you've lost me with the rationale behind the TA now ?

The TA is fecked for the meantime, may be a support at $8.67 from the 11/10/18 low.

Stop loss orders (or limit sell) didn't work in a large gap down market open, it either:
- 'sell market price' - triggers at the price set and sells at market open, locking in the loss, not stopping the loss
- 'sell limit price' - triggers and tries to sell at the limit price which was gapped so the sell order sits in the queue way above the bid

So I got trapped in by the gap-down open, but haven't realised the loss by selling. The limit sell order has been removed.

Happy to average down with small​ parcels and revert to previously mentioned TA buy-in large when the trend reverses. Which might be some time away! Lol.

I repeat, these are small value trades, beginning to build a stake, acknowledging the risk potential for lower prices.

[HKG2301]

Dipped my toe into ATM @ 9.15 ( 2200 ) is this the bottom, hope I dont get slaughtered once Aussie opens !

I think ATM is way over sold !

Yeah, me too. Picked up some @ 9.18 and another order in at 8.80 if it drops that far.

Have to say, more than a little tired of the hammering the share is receiving here from a few posters. Yeah, we get it. You were right, no need to labour the point. It's now become the fashion to bash ATM into the ground, just as it was to talk it to the stars last year. Sentiment drives SP in growth stocks (a fact I'm sure you're aware of) so labouring the point - eg 'fourth downgrade coming, run for the hills!' - sounds very strongly like you just talking your (short) book.

OK, over to the ASX, where I'm hoping for a bit of a bounce at the open...

[BlackPeter]

Yeah, me too. Picked up @ 9.18 and another order at 8.80 if it drops that far.

Have to say, more than a little tired of the hammering the share is receiving here from a few posters. Yeah, we get it. You were right, no need to labour the point. It's now become the fashion to bash ATM into the ground, just as it was to talk it to the stars last year. Sentiment drives SP in growth stocks (a fact I'm sure you're aware of) so labouring the point - eg 'fourth downgrade coming, run for the hills!' - sounds very strongly like you just talking your (short) book.

OK, over to the ASX, where I'm hoping for a bit of a bounce at the open...

Always interesting these threads. If posters start to turn against each other you know that things are bad ...

Share price is underlying value plus hype (remember - hype can be positive or negative). These forums are a great tool to measure the hype. Lets keep it that way, shall we?

[ratkin]

Yeah, me too. Picked up @ 9.18 and another order at 8.80 if it drops that far.

Sentiment drives SP in growth stocks (a fact I'm sure you're aware of) so labouring the point - eg 'fourth downgrade coming, run for the hills!' - sounds very strongly like you just talking your (short) book.

OK, over to the ASX, where I'm hoping for a bit of a bounce at the open...

In the short term sentiment rules, but longterm there is no hiding from the numbers

[JohnnyTheHorse]

CITI downgrade to A$7.15.
GS downgrade to A$12.09 (place no value of GS forecast as this will be their third or fourth time in a row being woefully wrong on this stock).

[BlackPeter]

CITI downgrade to A$7.15.
GS downgrade to A$12.09 (place no value of GS forecast as this will be their third or fourth time in a row being woefully wrong on this stock).

Problem is - analysts try to predict the price which is value plus hype ... and they are terrible hype forecasters, but - aren't we all :) ?

[tomm]

Problem is - analysts try to predict the price which is value plus hype ... and they are terrible hype forecasters, but - aren't we all :) ?
MorningStar : $15.10
Jarden: $11.40
Very interesting.
Citi Selling : CS , Jarden and Morningstar ... are buying, just my guess :t_up:

[HKG2301]

In the short term sentiment rules, but longterm there is no hiding from the numbers

If you are a true & total believer in market efficiency and have an investment horizon beyond one year, maybe. I'm neither.

Even ignoring the current 'Covid/Fed/Tesla/Robinhood/GameStock/Reddit/Wallstreetbets earthquake shaking the markets you surely have to acknowledge that 'spin' and sentiment (fear & greed) often have a HUGE influence. One which can last long enough for a fleet-footed investor to make far greater gains than a buy&holder. Not talking day- or options-trading here, just your average investor who keeps his eyes on the market and is willing to trade when a shorter-term opportunity presents.

In fact, I'd argue that, in current markets, the idea of buy & hold investing is not only very limiting, it's wrong! [Except perhaps for the likes of Mr Buffet, but I'm no Buffet!]

It's with that view that I find this tsunami of book-talking a bit of a bore...

;)

[Balance]

Problem is - analysts try to predict the price which is value plus hype ... and they are terrible hype forecasters, but - aren't we all :) ?

Look at the consistency and track record of the analyst & broker - that’s more useful than analysts’ absolute calls.

It is well known in the stockbroking industry that there are no prizes for trying to be a hero & get calls right - stick with the pack & everyone is either right or wrong.

And that means regurgitating in the main what the companies state, with slight adjustments either way.

[Joshuatree]

Its a basic golden rule of *your* investing. One that Buffet often kicks back on too. Not saying you are wrong, but even you alluded to it yourself that the risk/reward you seek is specific to your own point/age in life. My point is if Coutta, among others, diversifed for the sake of diversifying from 2016 through to 2020 they would have missed the crazy growth. It goes both ways.

So true. But what happens when all/most of your eggs in one basket turns sour/south?. It puts one in a horrible situ.We humans dont like to crystallise a loss and can be like the frog in a pot of water heating up; do nothing or become defensive, spruik, promote,pump the stock and encourage others to buy, follow, support .Ones integrity can be challenged when everything is at stake.Im never putting myself in that situ again.I was in the NZX 87 crash and learnt from that..
I cant convince my friend to take some profits or at least free carry his ONLY holding, in Tesla, he is ( a few days ago, its dropped re 20% since )up re 800% has made re $2.5 mill plus, and says is holding for 10 years. But he is not pumping it spruiking it, trying to influence anyone but simply shares his complete and thorough research and knowledge with me when we meet and i ask questions. Hope ATM comes right for holders and believers.

[Beagle]

So true. But what happens when all/most of your eggs in one basket turns sour/south?. It puts one in a horrible situ.We humans dont like to crystallise a loss and can be like the frog in a pot of water heating up; do nothing or become defensive, spruik, promote,pump the stock and encourage others to buy, follow, support .Ones integrity can be challenged when everything is at stake.Im never putting myself in that situ again.I was in the NZX 87 crash and learnt from that..
I cant convince my friend to take some profits or at least free carry his ONLY holding, in Tesla, he is ( a few days ago, its dropped re 20% since )up re 800% has made re $2.5 mill plus, and says is holding for 10 years. But he is not pumping it spruiking it, trying to influence anyone but simply shares his complete and thorough research and knowledge with me when we meet and i ask questions. Hope ATM comes right for holders and believers.

Extremely frustrating trying to help your friends take a more professional approach to investing isn't it !
First mover advantage only lasts so long and then it rapidly dissipates and dwindles down to the point where its gone...something that seems lost on a lot of ATM and Tesla shareholders !
Plenty of competition is now here and VAST amounts of further competition is coming....eventually A2 Milk and Tesla vehicles will be just another commodity.

[nztx]

ATM currently looks to be one of the few Green's in a sea of Red today .. ;)

Did the market sneeze or catch a bad flu somewhere ? ;)

[tomm]

ATM currently looks to be one of the few Green's in a sea of Red today .. ;)

Did the market sneeze or catch a bad flu somewhere ? ;)
You made my day LOL hahahah...

[LEMON]

https://assets-au-01.kc-usercontent.com/bca3e5d5-83bd-02bf-1c27-acb036630e5b/df2ee78f-aff8-4dcc-a018-2220f8212124/The%20a2%20Milk%20Company%20Limited%20-%20HY21%20Results%20-%20Analyst%20Q&A%20-%2010011881%20-%20250221.mp3

Analysts investor conference call link from y'day following release of HY results for those that are keen to know more...very insightful.

Not sure what to make of it.
A lot of expectations but they already implied this the last 3 times.

They mentioned how they now have a plan for Daigou in the future. Just wonder why a company with 700+ million could not implement this earlier.

Can someone maybe help me understand the discussion about having a tracer programme set up for inventory, Could someone highlight the reason?

Thanks.

[tomm]

Not sure what to make of it.
A lot of expectations but they already implied this the last 3 times.

They mentioned how they now have a plan for Daigou in the future. Just wonder why a company with 700+ million could not implement this earlier.

Can someone maybe help me understand the discussion about having a tracer programme set up for inventory, Could someone highlight the reason?

Thanks.
More accurate to work with stocks , whether it needs refill or old stocks stucks on the shelves, they can work it out by themselves insteads of rely to the stores to report back.

[LEMON]

More accurate to work with stocks , whether it needs refill or old stocks stucks on the shelves, they can work it out by themselves insteads of rely to the stores to report back.

Ahh that would make sense, the discussion took a spin off context at one point.
I thought maybe they lost a huge number of product somewhere.

Thanks for clearing that up.

[tomm]

Dipped my toe into ATM @ 9.15 ( 2200 ) is this the bottom, hope I dont get slaughtered once Aussie opens !

I think ATM is way over sold !
That price is a dream for this shares.

[tomm]

Ahh that would make sense, the discussion took a spin off context at one point.
I thought maybe they lost a huge number of product somewhere.

Thanks for clearing that up.
That is a step forward to techs as we may say , also cutting cost.

[tomm]

Not sure what to make of it.
A lot of expectations but they already implied this the last 3 times.

They mentioned how they now have a plan for Daigou in the future. Just wonder why a company with 700+ million could not implement this earlier.

Can someone maybe help me understand the discussion about having a tracer programme set up for inventory, Could someone highlight the reason?

Thanks.
stock was ending up in places it shouldn't if the distributors are doing the job correctly. It was going to the wrong ecommerce site and to ecommerce stores not bound by a2's strick pricing policy. It wasn't a2's inventory it was the distributors which caused the problem. Thats why traceability is so important. If they know which distributors are breaching their agreement because stock turns up in the wrong retailers or ecommerce sites they can hold them to account. By publicising to distributors they can track the product they will stop this happening.

[nztx]

That price is a dream for this shares.

my thoughts too .. the gut feeling is that there's a fair bit of market overkill that goes on
with ATM's announcements hitting the wire along the way ..

Such consistent punishment would appear to open some fairly good opportunities for those
brave enough to jump on the rollercoaster .. ;)

[LEMON]

stock was ending up in places it shouldn't if the distributors are doing the job correctly. It was going to the wrong ecommerce site and to ecommerce stores not bound by a2's strick pricing policy. It wasn't a2's inventory it was the distributors which caused the problem. Thats why traceability is so important. If they know which distributors are breaching their agreement because stock turns up in the wrong retailers or ecommerce sites they can hold them to account. By publicising to distributors they can track the product they will stop this happening.


Now I understand fully.
Thanks tomm.
Appreciate it

[Balance]

Some comments after the last downgrade on 18 December 2020 :


So just a minor, distinctly un-worrying guidance adjustment after all.

Now for that relief rally!

:t_up:


Hardly a massive downgrade.


Im not in a rush to hop out. The news is good enough for me to stay in for the long haul


similar stance here

may even look at a bit of averaging down to smooth things over at the right levels


Time to top up and average down. Over 50% down from ATH

[Gregnz]

my thoughts too .. the gut feeling is that there's a fair bit of market overkill that goes on
with ATM's announcements hitting the wire along the way ..

Such consistent punishment would appear to open some fairly good opportunities for those
brave enough to jump on the rollercoaster .. ;)

Agreed. I tend to think the market expects ATM to exceed guidance, and anything less results in a massive over reaction. I've done very nicely recently based on such over reactions.

Interesting that our national airline yesterday reported quite a significant loss, and unlikely to return to profitability until at least 2024, plus a capital raise to further dilute the SP (plus perhaps conversion of a high interest massive government loan to equity), and even when profitable, those profits were minimal considering the capital involved, yet the SP increased. Goes to show how the market reacts.

I saw this across on HC, good to put things into perspective... (credit to whoever originally posted it).

12345

[Gregnz]

Some comments after the last downgrade on 18 December 2020 :

Are you Moosie? Even fellow poster Beagle agrees that compiling a whole lot of quotes out of context is disgraceful. Honestly Balance, you need to take a break from the forum.
You also appear to have a lot of time on your hands, if your retired, how about stepping away from the keyboard and contribute out there in society, ie perhaps volunteer work?

[Balance]

Yeah, me too. Picked up @ 9.18 and another order at 8.80 if it drops that far.

Have to say, more than a little tired of the hammering the share is receiving here from a few posters. Yeah, we get it. You were right, no need to labour the point. It's now become the fashion to bash ATM into the ground, just as it was to talk it to the stars last year. Sentiment drives SP in growth stocks (a fact I'm sure you're aware of) so labouring the point - eg 'fourth downgrade coming, run for the hills!' - sounds very strongly like you just talking your (short) book.

OK, over to the ASX, where I'm hoping for a bit of a bounce at the open...

Speak for yourself.

Some of us post not for the 'head in the sand' brigade but for the many others who come to the site to get a balanced view.

I do not do shorts so you can count me out for starters.

[Balance]

Are you Moosie? Even fellow poster Beagle agrees that compiling a whole lot of quotes out of context is disgraceful. Honestly Balance, you need to take a break from the forum.
You also appear to have a lot of time on your hands, if your retired, how about stepping away from the keyboard and contribute out there in society, ie perhaps volunteer work?

Out of context?

We are reading exactly the same sort of postings (especially the postings which attempt to cast posters who have correctly predicted this third downgrade as self-interested shorters wanting to spook holders into selling) from some posters in the last 2 days after yet another downgrade.

All in perspective, my friend for those who come to this site to read postings in context.

You would love to have just your view here so others can blindly follow you down the slippery slope for the last 6 months?

[Gregnz]

Out of context?

We are reading exactly the same sort of postings from the same posters in the last 2 days after yet another downgrade.

All in perspective, my friend for those who come to this site to read postings in context.

You've taken a post of mine from December? Thats why its out of context. I've actually been very quiet on the forum the past two days if you havent noticed, while you've been banging away incessantly on your keyboard.

[Gregnz]

Out of context?

We are reading exactly the same sort of postings from the same posters in the last 2 days after yet another downgrade.

All in perspective, my friend for those who come to this site to read postings in context.

You would love to have just your view here so others can blindly follow you down the slippery slope for the last 6 months?

So your suggesting only negative views here are acceptable to you? How about a 'balanced' view Balance?

[Balance]

So your suggesting only negative views here are acceptable to you? How about a 'balanced' view Balance?

Ah - as if I have not posted positive views!

[Balance]

Chill, Gregnz.

Read the posting from yourself yesterday and you know it's all in context.


You've taken a post of mine from December? Thats why its out of context. I've actually been very quiet on the forum the past two days if you havent noticed, while you've been banging away incessantly on your keyboard.


Really? You do realise what the returns were if you'd invested $100,000 in ATM in 2016?
But yes a pandemic came along, and suddenly those who told you to invest in 2016, generating returns not seen elsewhere, and suddenly you treat them as the scum of the earth for not selling out at the top and believing in the long term trajectory of the company?

[Gregnz]

Chill, Gregnz.

Read the posting from yourself yesterday and you know it's all in context.

I still have no reason to not believe in the long term trajectory of the company.

Collating various posts from members across various timeframes is disgraceful and you know that. If you don't, then you clearly have a lot to learn.

[Balance]

I still have no reason to not believe in the long term trajectory of the company.

Collating various posts from members across various timeframes is disgraceful and you know that. If you don't, then you clearly have a lot to learn.

All in context - am I not allowed to highlight how some posters consistently downplay the gravity of the downgrades from one downgrade to the other?

Am I not allowed to share my observations on this site?

Everything to learn from history, my friend.

Never get emotional when it comes to stocks - it clouds judgement.

[Gregnz]

All in context - am I not allowed to highlight how some posters consistently downplay the gravity of the downgrades from one downgrade to the other.

Everything to learn from history, my friend.

Well what I can assure you, when the tide turns and ATM is back in recovery mode, perhaps back at previous highs, you can be sure that I wont stoop as low as to rub salt in the wounds of non holders by hunting the forum for historical posts, to collate and post. My morals are far higher than that.

[Balance]

Well what I can assure you, when the tide turns and ATM is back in recovery mode, perhaps back at previous highs, you can be sure that I wont stoop as low as to rub salt in wound of non holders by hunting the forum for historical posts, to collate and post. My morals are far higher than that.

Nothing to do with morals - everything to do with observations.

I have been a keen observer of what's going on with ATM & the postings here - like everyone, trying to glean insights and part of the observations is who to follow and who not to follow.

If you are suggesting I do not share my observations, then that's another matter which I beg to differ.

[Baa_Baa]

Well what I can assure you, when the tide turns and ATM is back in recovery mode, perhaps back at previous highs, you can be sure that I wont stoop as low as to rub salt in wound of non holders by hunting the forum for historical posts, to collate and post. My morals are far higher than that.

You certainly have high principles and a measured response generally, I see you doing your thing on HC and compared to here, that's a real rats nest. As for our resident commentators, rather than seeing it as a negative, consider perhaps their take on the psychology and circumstances .. and they've been right. I've seen it literally hundreds of times, but what may surprise you is that they are adept at buying into the things they been warning about .. when the situation changes. Very experienced investors & traders, I don't think they actually mean any ill towards people who choose not to take their 'advice', albeit sometimes when challenged it can get a bit personal from both sides.

Anyway, who would've picked it, one day later and my parcel from yesterday is nicely in profit. Makes me wonder if the market had priced in the third downgrade and yesterday was an over reaction. Early days, ATM has a lot of ground to make up, and goodwill to restore in investors, best just to let them get on with it.

[Beagle]

You can work the numbers out for yourselves : THIRD DOWNGRADE


Outlook FY21

Globally there continues to be unprecedented levels of uncertainty and volatility due to COVID-19.

The Company remains confident in the underlying fundamentals of the business and will continue to invest behind the brand and in its capability to drive long term growth.

However, the pace of recovery in the daigou/reseller channel and in the CBEC channel has been slower than previously anticipated and the Company now expects revenue to be at the lower end of the previous guidance range.
A lower EBITDA margin range is now expected due to lower revenue, higher brand investment, longer daigou/reseller support, movements in foreign currency and adverse channel mix relative to what was anticipated in December.

Accordingly, the Company’s FY21 outlook is now as follows:

• Group revenue for FY21 in the order of $1.4 billion

• Group EBITDA margin for FY21 of 24% to 26% (excluding MVM acquisition costs)

The outlook for FY21 assumes the actions being taken to re-activate the daigou/reseller channel deliver a significant improvement in quarter-on-quarter growth from 3Q21 to 4Q21.

Second Downgrade : 18 Dec 2020

Our FY21 guidance as follows:

• Group revenue for FY21 of $1.40 billion to $1.55 billion

• Group EBITDA margin for FY21 of between 26 per cent and 29 per cent.

First Downgrade : 28 Sept 2020

an update to our outlook to include our view of Group revenue as follows:

- Group revenue for 1H21 of $725 million to $775 million

- Group revenue for FY21 of $1.80 billion to $1.90 billion

- Group EBITDA margin for FY21 in the order of 31%.

Results for F20 : 19 August 2020

Total revenue of $1.73 billion, an increase of 32.8%

• EBITDA4 of $549.7 million, an increase of 32.9%

Give yourself a pat on the back mate and put your feet up and have a rest. You've contributed many, many thousands of useful posts over nearly two decades. Don't let the newbies who often have little respect for the old hands on here get to you. I just highlighted this part of your very useful post so those with a very short attention span don't miss it.

The way I see it, the real worry is the very rapidly declining margins (26.4% first half) and by implication in their own forecast if the full year is 24-26% the second half could be as low as 21.6% :scared: Every time they update the market their brand value and IP just keeps looking weaker and weaker and weaker... Plenty more disappointment for shareholders to come in future updates, in my opinion and I expect the downtrend to continue for quite some time.

[Gregnz]

Nothing to do with morals - everything to do with observations.

I have been a keen observer of what's going on with ATM & the postings here - like everyone, trying to glean insights and part of the observations is who to follow and who not to follow.

If you are suggesting I do not share my observations, then that's another matter which I beg to differ.

Its ok to be a keen observer and you can make up your own mind who you wish to follow and who not to follow. I guess I beg to differ with how you conduct yourself on the forum, especially your recent comments. Collating historical posts to 'remind' people who you think they should follow in my view is disgraceful, but others can make their own mind up I'm sure.

[Gregnz]

You certainly have high principles and a measured response generally, I see you doing your thing on HC and compared to here, that's a real rats nest. As for our resident commentators, rather than seeing it as a negative, consider perhaps their take on the psychology and circumstances .. and they've been right. I've seen it literally hundreds of times, but what may surprise you is that they are adept at buying into the things they been warning about .. when the situation changes. Very experienced investors & traders, I don't think they actually mean any ill towards people who choose not to take their 'advice', albeit sometimes when challenged it can get a bit personal from both sides.

Anyway, who would've picked it, one day later and my parcel from yesterday is nicely in profit. Makes me wonder if the market had priced in the third downgrade and yesterday was an over reaction. Early days, ATM has a lot of ground to make up, and goodwill to restore in investors, best just to let them get on with it.

Absolutely agree, and in general I appreciate various view points, Balance's included. But there is an appropriate way to conduct yourself on a forum, and unfortunately I think some peoples standards have slipped (perhaps at times, mine included). I agree he was right to pick various downgrades, but there is a time and place to gloat, and a way to do it in a measured and appropriate way.

[Gregnz]

Give yourself a pat on the back mate and put your feet up and have a rest. You've contributed many, many thousands of useful posts over nearly two decades. Don't let the newbies who often have little respect for the old hands on here get to you. I just highlighted this part of your very useful post so those with a very short attention span don't miss it.

The way I see it, the real worry is the very rapidly declining margins (26.4% first half) and by implication in their own forecast if the full year is 24-26% the second half could be as low as 21.6% :scared: Every time they update the market their brand value and IP just keeps looking weaker and weaker and weaker... Plenty more disappointment for shareholders to come in future updates, in my opinion and I expect the downtrend to continue for quite some time.

Thanks Beagle, if you recall It was me who called out another fellow poster for conducting themselves in the same way when collating your posting history? So it's ok for Balance to conduct himself in that way when collating our posts, but not when others do it to you? I'm genuinely curious.

[Beagle]

Thanks Beagle, if you recall It was me who called out another fellow poster for conducting themselves in the same way when collating your posting history? So it's ok for Balance to conduct himself in that way when collating our posts, but not when others do it to you? I'm genuinely curious.

Thanks for that. That poster pulled a very old post, (without any reference to the date or context of the post) from a time deep in the Covid crisis when HLG was in a downtrend, so was completely out of context with the current environment. In my opinion Balance wasn't doing that he was merely showing a pattern within the same framework of recent declining fortunes for ATM. That said, in my opinion, I think if one must quote old posts then the right thing to do is to post the date when the post was made. I reiterate my view that Balance has added tremendous value to this forum over a VERY long time.

[Gregnz]

Thanks for that. That poster pulled a very old post, (without any reference to the date or context of the post) from a time deep in the Covid crisis when HLG was in a downtrend, so was completely out of context with the current environment for that company and was deliberately disingenuous, antagonistic, argumentative and deliberately constructed as a personal attack.
Balance wasn't doing that he was merely showing a pattern within the same framework of recent declining fortunes for ATM. That said, in my opinion, I think if one must quote old posts then the right thing to do is to post the date when the post was made. I reiterate my view that Balance has added tremendous value to this forum over a VERY long time. He has a very good track record of being right and I take notice of his posts. His high reputation score has been well and truly earned. The person you refer too who launched a sustained personal attack the other day has only been here for 5 seconds and contributed nothing.

I guess our views differ on the behaviour in question.
Whether your a ‘newbie’ or a ‘expert’ , my opinion is we should all be held to the same standard.

[blackie]

yes thank you Balance.
your contributions are ,........ well........ legendary.
says it all

[Beagle]

https://www.goodreturns.co.nz/article/976518213/nz-shares-snap-six-day-decline.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+26+Feb+ 2021

Extract
Lister said the “jury is still out” on the milk marketing firm which has now downgraded its earnings forecast three times.

“It wasn’t a comforting result and there do appear to be some longer-term challenges for the business,” he said.

[Baa_Baa]

https://www.goodreturns.co.nz/article/976518213/nz-shares-snap-six-day-decline.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+26+Feb+ 2021

Extract

The big question is 'when are you prepared to invest in the future' and what your horizon is. Now might not be the right time for a lot of people who are risk averse, understandable when things are so volatile. It is this that makes the market. A close eye on portfolio balance helps, don't bet the bank. Not yet anyway.

[Beagle]

The big question is 'when are you prepared to invest in the future' and what your horizon is. Now might not be the right time for a lot of people who are risk averse, understandable when things are so volatile. It is this that makes the market. A close eye on portfolio balance helps, don't bet the bank. Not yet anyway.

A break up through the 100 day moving average in due course would signal a change in momentum. Too risky to buy in a confirmed downtrend in my opinion.

[Rawz]

The big question is 'when are you prepared to invest in the future' and what your horizon is. Now might not be the right time for a lot of people who are risk averse, understandable when things are so volatile. It is this that makes the market. A close eye on portfolio balance helps, don't bet the bank. Not yet anyway.

Personally I would rather see a recovery in diagou and margin gain (or levelling out), then buy in at $12+.
As opposed to buying at these levels and hope that management turn this ship around.

Yes, will forgo the chance for big upside, but also forgo the downside which is equally as big imo.

[tommy_d]

Its ok to be a keen observer and you can make up your own mind who you wish to follow and who not to follow. I guess I beg to differ with how you conduct yourself on the forum, especially your recent comments. Collating historical posts to 'remind' people who you think they should follow in my view is disgraceful, but others can make their own mind up I'm sure.
@gregnz, i find it useful to see who has a history of being frequently correct, and those with a history of being wrong.
Chill a little, we're all wrong sometimes - nothing to be ashamed of, or upset about being pointed out

[porkandpuha]

Some comments after the last downgrade on 18 December 2020 :

What exactly was the purpose of this post?


EDIT: ah, I was a page behind and I see the behaviour has been called out already. I can't comprehend how someone could be so invested (ha, the irony) in coming to a forum multiple times a day to discuss an investment they don't have. Are you that bored in life that Schadenfreude has become the only form of entertainment?

I just took a random stab at an old page and found post 11443 - A predication by Balance on November 2018 that A2 would shift to an exclusive ASX listing. Shall we frame it? No. Nobody cares. We all accept we can be wrong from 1 page to the next such is the ever changing dynamic of financial markets.

And then right on cue Mr. "I don't get respected enough on this forum so I am going on my 8th hiatus this year" comes along to give back rubs and high fives while sharing a celebratory gin at the demise of holders because "Hey we were right they should have listened to us because we have thousands of posts". Holders are more than capable of doing their own DD without all the narcissistic patronising posts attempting to hold these strangers to account. Case in point, post 20276 by Youngbull and 20318 by Ohdoyle.

This thread has turned to trash, and bringing me down with it. I'm heading back to the facebook groups where a discussion point raised by a first time poster generates better A2 discussion than the schlong measuring contest this forum has deteriorated into.

[tomm]

A break up through the 100 day moving average in due course would signal a change in momentum. Too risky to buy in a confirmed downtrend in my opinion.
It is already confirmed since December!
I have been waiting for the report to come out to get my foot in.

[tomm]

Well what I can assure you, when the tide turns and ATM is back in recovery mode, perhaps back at previous highs, you can be sure that I wont stoop as low as to rub salt in the wounds of non holders by hunting the forum for historical posts, to collate and post. My morals are far higher than that.
Exactly what I said earlier :
Who distrust the company : SELL NOW ==> AND DO NOT NAGG OR STILL BELIEVE IN THE COMPANY BUT PRETENDING TO BE A DOWN RAMPER TO LOOK FOR A CHEAP ENTRY = THIS IS SO CHEAP!!!
Who has faith in the company and believe this is it : Buy Now.

p/S : I believe Balance is looking for a cheap entry that is why he is nagging about it from NZ to HC in Aus.. LOL. If you (@Balance) just stop nagging and made a trade this morning you will stop nagging because you are happy now.:t_up:

[tomm]

Besides, I do expecting a whole lots of down rampers will starting to claw out of their holes as yesterday and today trading were fantastic and are supported at an xtremely high level.
I was expected the SP will be closed at a range of $9.35-$9.45 at max, but it closed at $9.60-$9.70 with a total of 18 Mil of shares from both NZX and ASX today.
Yesterday, 38 Mil of shares changed hand.
I was totally amazed.

P/S : whoever attempt to divert the topic or go sideways will be in my ignore Bin. ;)

[alokdhir]

As investors and traders we all know that ATM is a traders delight as it moves both ways big time ...

After every downgrade it opened -20% or so and then bounce up to next resistance and then it peters out ...same happening here ...it can maximum go till 10.50 and then juice gone

I was asking Bull about level to buy ...I had 8.80-9 in mind and it turned from 8.92 ...now it can go further more

After that fundamentals catch up and it will revert to 9

This it did last 3 times and will do again ...Traders and holders can use to reduce costs

Investors sit tight ...tide will change hopefully in next 12 months or so

[winner69]

Jarden top buys / sells (value) have A2 has 2nd most bought stock last week (Contact top of the list)

[alokdhir]

Jarden top buys / sells (volume) have A2 has 2nd most bought stock last week (Contact top of the list)

Most bought can be seen as most sold also and most traded also .

Simple to explain ...Big news come and big range it moved to give ample opportunity to buy and sell many times thus showing huge vols

Also Jarden had ATM as their most Green range stock in Nov report ...Strongest Buy (1 out of 2 only in that category )

Makes me think our Bs here had better grip on ATM prospects then them ...lol

[xp04]

Thanks Beagle, if you recall It was me who called out another fellow poster for conducting themselves in the same way when collating your posting history? So it's ok for Balance to conduct himself in that way when collating our posts, but not when others do it to you? I'm genuinely curious.

Can you collaborate why is that wrong to bring old posts in to discussion? It looks like Beagle is very proud of his decade long history of posts. Don’t see why it should be waisted and not to show that his opinion usually does not worth much as he changes it as he pleased. Btw, same applies to other b posters

[winner69]

Most bought can be seen as most sold also and most traded also .

Simple to explain ...Big news come and big range it moved to give ample opportunity to buy and sell many times thus showing huge vols

Also Jarden had ATM as their most Green range stock in Nov report ...Strongest Buy (1 out of 2 only in that category )

Makes me think our Bs here had better grip on ATM prospects then them ...lol

Hear what you saying but the 'formula' for this is - the first share in the BUY list is there because the BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

Must mean something

[tomm]

Hear what you saying but the 'formula' for this is - the first share in the BUY list is there because the BUY value traded in that stock exceeded the SELL value traded in that stock by the largest degree, last week.

Must mean something
The SP is dipped by half. They already worked out the SP without daigou contribute to the business, as simple is that. It is about 35-38% of the business, the Sp should be about $11-$12.80 for the momentum despite daigou chanel will return or not.
No one can do anything about this pandemic covid-19 around the world, I don't blame on the management or the business itself, until vaccines are rolled out , borders are open then we will look into the management if they can't boost sale. I am sure they are already working on way to boost sale by expanding brand awareness and increased the stores across their business.
The Sp should be about $11-$12.80 for the momentum despite daigou chanel will return or not.

[Balance]

It is proven the shake and coup of the shares.

They sold:
Date of relevant event: 30 June 2020Date this disclosure made: 2 July 2020
Pendal Group Limited
For last disclosure,—(a) total number held in class: 38,896,079(b) total in class: 739,830,151(c) total percentage held in class: 5.26%
For current holding after ceasing to have substantial holding,—(a) total number held in class: 34,462,527(b) total in class: 739,830,151(c) total percentage held in class: 4.66%

And they have been quietly buying back all of their shares.
Date this disclosure made: 30 September 2020Date on which substantial holding began: 28 September 2020
Pendal Group Limited
For this disclosure,—(a) total number held in class: 38,355,845(b) total in class:742,588,971(c) total percentage held in class: 5.165%

I feel sorry to those whom sold recently .

No need to feel sorry for those who sold to Pendal - they sold out at between $15.34 and $18.00.

Looks like Pendal are not as clever and manipulatively effective as they are made out to be?

[Balance]

What exactly was the purpose of this post?



The purpose is clear but as I do not write and post for the likes of you, you are most welcome to place 'ignore' on yours truly here.

As they say, Ignorance is bliss.

[tomm]

No need to feel sorry for those who sold to Pendal - they sold out at between $15.34 and $18.00.

Looks like Pendal are not as clever and manipulatively effective as they are made out to be?
They sold to recoup at a cheaper Sp, that is why we are experiment an enormous support's rate at this Sp level.

[alokdhir]

IMHO there is no need to convert anyone here ...No one will change his/her opinion or even try to see things from other's perspective

But fact remains same that SP of ATM has turned out to be a bottomless pit recently ...surely worm will turn sometime ...but not soon so the debate here between two camps keep getting nastier after every downgrade :D

[tomm]

IMHO there is no need to convert anyone here ...No one will change his/her opinion or even try to see things from other's perspective

But fact remains same that SP of ATM has turned out to be a bottomless pit recently ...surely worm will turn sometime ...but not soon so the debate here between two camps keep getting nastier after every downgrade :D
I respect your opinion but may I ask Do you hold ATM shares ??? or are you looking for a cheap entry? Traders are making money only you sitting there and thinking as an amateur trader. I am sure lots of traders are working their way to balance their sheets and even making money.

[Balance]

a2 Milk : Morgans rates A2M as Add


The a2 Milk Co's result was considered weak by Morgans though slightly ahead of guidance. Despite management issuing another material downgrade, the broker believes the company is well placed over the medium to longer-term once channels normalise.

The analyst reduces FY21-23 profit (NPAT) forecasts by -13.7%, -14.1% and -13.9%, respectively, though forecasting forecast solid earnings growth from FY22. This is driven by a recovery in the daigou as covid restrictions ease and growth in China and North America.

Add rating and target is decreased to $10.40 from $12.20.

Target price is $10.40.Current Price is $8.77. Difference: $1.63 - (brackets indicate current price is over target). If A2M meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).

[Balance]

Can you collaborate why is that wrong to bring old posts in to discussion? It looks like Beagle is very proud of his decade long history of posts. Don’t see why it should be waisted and not to show that his opinion usually does not worth much as he changes it as he pleased. Btw, same applies to other b posters

Speaks for itself :

Posted 11 Jan 2021


I do not think the ‘debacle’ with Hrdlicka was about her moving too fast. Rather she was 'destroying' established management model/culture while sitting on two chairs letting her 'buddy' consultants run the company and as result many long serving and dedicated people decided to leave the company. Also I do not think Hearn had a choice but to bring Babidge back otherwise company would be without CEO for sometime which is much worse. It was always clear that Babidge would be a seat warmer and not a decision maker. I have my reservations about the BOD but I agree with Ruby and don't think that they are that stupid and will let new CEO to pour another load of manure this time. Besides, it looks like DB will start somewhere around HY results announcement date and I doubt he will have time to find any remaining skeletons. It's not like I think there are any.

Fourth downgrade on the way - new CEO will be going in with his own mandate to clean out every single cupboard of gross mismanagement which we know is there.

How the heck can any well managed multi-billion dollar company not know how bad their stock situation & sales were?

Sales not being achieved = stock piling up because management had no clue.

Getting rid of stock = reduced margins.

Too easy to blame it on Covid & Daigou - allows management & BOD off the hook.

As Craig’s note alerted to - ATM has lost momentum vs it’s competitors.

And all that while executives and directors were feasting on share options, huge benefits and salaries and selling shares after telling all and sundry that everything is good!

[tomm]

a2 Milk : Morgans rates A2M as Add


The a2 Milk Co's result was considered weak by Morgans though slightly ahead of guidance. Despite management issuing another material downgrade, the broker believes the company is well placed over the medium to longer-term once channels normalise.

The analyst reduces FY21-23 profit (NPAT) forecasts by -13.7%, -14.1% and -13.9%, respectively, though forecasting forecast solid earnings growth from FY22. This is driven by a recovery in the daigou as covid restrictions ease and growth in China and North America.

Add rating and target is decreased to $10.40 from $12.20.

Target price is $10.40.Current Price is $8.77. Difference: $1.63 - (brackets indicate current price is over target). If A2M meets the Morgans target it will return approximately 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
To NZD Target price is at $11.07NZD , current closed SP at yesterday is at $9.60NZD.

[Beagle]

Stephen Ridgewell published and extensive preview overnight in advance of the ATM 1H21 result on Thursday. The result is pre-guided with $181m of EBITDA expected although the key questions for Ridgewell is whether ATM can provide confidence that revenue and margin trends are stabilising sequentially and also whether ATM can diversify its channels to market and defend its brand premium under new CEO David Bortolussi. Clarity on the latter question will take some time, although feedback from our proprietary large daigou contacts suggest that the sequential sales snap back is yet to eventuate. The issues around this important channel are multifaceted but can be best summarised as follows:

· Volumes declining - volume trends have worsened in early 2021 with Jan sales -70% yoy (vs. -55% yoy in the Dec qtr) with a much smaller than normal increase in demand ahead of the Chinese New Year period (chart 1)

· ATM’s daigou market share has eased – ATM has gone from market share gainer in 2018/19 to holding relative share versus other key daigou brands such as Danone’s Aptamil. Balance a few days ago.

Looks like one analyst did a company visit to glean that information which does not auger well for second half sales and seems to be a very pertinent factor that's more or less been ignored on here. Reflecting on this I think its highly likely there will be a fourth downgrade. In nearly 40 years of bean counting I have learned that its the very latest sales data that's the most reliable indicator of future sales results and its clear December 2020 and January 2021 sales were excetionmally weak.

Beginner level TA (selling on a break down of the 100 day MA) would have got people out at ~ $20, kept them out since then and saved them losing more than half their money.
Many years ago I used to think TA was of limited value...these days I think one ignores TA at their absolute peril and seldom you see a finer example than this one !!
On a longer term chart like 5 years, (not shown) its clear a simple strategy of investing with the momentum using any breech up or down through the 100 day MA as the indicator of changing momentum has been a very worthwhile strategy. One day, might not be until 2022 or even 2023, momentum will swing back to the upside with a break up through the 100 day MA. This might be from a base several dollars below the current price in my opinion.

ATM has more than halved in the last 7 months...couldn't happen again from the current level going forward surely ?...or could it ? :scared: Some people seem super confident growth will return, like it a fate accompli...I am not so sure that's as certain as some shareholders think it is. This stock could halve again to ~ $5. Remember, I called it first !

I have learned its a very "brave" thing to do to buy a stock in a confirmed downtrend. Being "brave" is usually a very expensive exercise in my long investing experience dating back to the mid 1980's.
12347

[Balance]

Balance a few days ago.

Looks like one analyst did a company visit to glean that information which does not auger well for second half sales and seems to be a very pertinent factor that's more or less been ignored on here. Reflecting on this I think its highly likely there will be a fourth downgrade. In nearly 40 years of bean counting I have learned that its the very latest sales data that's the most reliable indicator of future sales results and its clear December 2020 and January 2021 sales were excetionmally weak.

ATM has more than halved in the last 7 months...couldn't happen again from the current level going forward surely ?...or could it ? :scared: Some people seem super confident growth will return, like it a fate accompli...I am not so sure that's as certain as some shareholders think it is. This stock could halve again to ~ $5. Remember, I called it first !

I have learned its a very "brave" thing to do to buy a stock in a confirmed downtrend. Being "brave" is usually a very expensive exercise in my long investing experience dating back to the mid 1980's.


That Craig's piece was courtesy of Entrep (thanks!) on 24 Feb, day before the results announcement.

As telling a piece of research as you are ever going to get of the pending third downgrade when Craig's sources on the ground were telling them that things on the sales front were looking grim.

Those who took heed of the research would have got out at $11.48 that day - and bought back 22% cheaper the next day, if they so choose.

As for ATM's sp halving again - that's easy to see as the growth multiple the stock is still trading on of 30.6X F21 shrinks to 18X in the event of a fourth downgrade.

[Beagle]

That Craig's piece was courtesy of Entrep (thanks!) on 24 Feb, day before the results announcement.

As telling a piece of research as you are ever going to get of the pending third downgrade when Craig's sources on the ground were telling them that things on the sales front were looking grim.

Those who took heed of the research would have got out at $11.48 that day - and bought back 22% cheaper the next day, if they so choose.

As for ATM's sp halving again - that's easy to see as the growth multiple the stock is still trading on of 30.6X F21 shrinks to 18X in the event of a fourth downgrade.
Forward PE of 18 feels about right to me given the fundamental uncertainty regarding when or even if growth may resume again and at what far more modest rate ?
My revised forecasted eps for FY21 currently stands at 31 cps based on latest forecast (but highly likely to be less when the fourth downgrade happens) so yeah, maybe 28 cents x 18 = ~ $5

[Balance]

What did some brokers think of the A2 Milk share price?

Quite a few of the brokers said that the result was disappointing and below their expectations.

Broker Citi is particularly bearish about the infant milk company with an A2 Milk share price target of $7.15. The HY21 net profit of $120 million was 8% lower than what Citi was estimating it would be.

Citi has decreased its profit expectations for FY21, FY22 and FY23 by between 25% to 30% with demand adding to numerous ongoing issues confronting the company. The main reason for Citi’s profit expectation decrease is due to a slower daigou recovery as well as lower margins because of higher levels of incentives to reactivate the channel.

Other issues that Citi pointed to included higher production costs and adverse foreign currency movements, which is likely to affect margins. The broker thinks that margins are going to be hurt.

Ord Minnett is another broker that has turned more negative on the infant formula business because of the various challenges and longer recovery.

One broker does have a slightly more positive outlook for A2 Milk, though it fully acknowledges the difficulties. Morgans has a share price target for A2 Milk of $10.40. The broker thinks that A2 Milk can still deliver over the longer-term once channels can return to normal.

Looking at Morgans’ estimate for FY22, the A2 Milk share price is valued at 27x FY22’s estimated earnings.

At the current value, Ord Minnett thinks that A2 Milk shares are priced at 31x FY22’s estimated earnings.

[Beagle]

Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?

[Balance]

Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?

Excellent point, Beagle.

I believe you have hit the nail on the head.

[Ruby]

In the interest of balance,do you see any upside?
It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?

[winner69]

Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?


Maybe the mothers had plenty stored away in the pantry .....and thought they better use that up fast

Wasn’t pantry stocking a term the industry used a while ago.

[tomm]

In the interest of balance,do you see any upside?
It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?
Those are people who believe and love this stocks ATM but looking for a cheap cheap entry.

[Ruby]

Agreed,I think YOY comparisons of sales could be difficult to analyse as we enter the period of "covid panic' that set in around this time 12 months ago and even earlier for the Chinese market.
As well,with the increase in MBS stores added,those mums may have bought their A2 from the shop down the road from them rather than daigou.

[Balance]

In the interest of balance,do you see any upside?
It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?

I have been very open about me keeping an eye on ATM as a turnaround story.

Can’t see the turnaround yet and imo, sp has a long way to fall before it represents value.

Meanwhile, whatever I read or glean information from, I post (both negative & positive) in the interest of keeping all informed.

You have a problem with that?

PS. Have a look at FBU in recent years - plenty of negative points around but nobody complained, and the reward of investing in a turnaround stock is there for all to see.

[Beagle]

Maybe the mothers had plenty stored away in the pantry .....and thought they better use that up fast

Wasn’t pantry stocking a term the industry used a while ago.

It was certainly something people did around April / May last year but as we all know IF has a limited shelf life and I'm not sure many people would buy a whole year ahead.

One further issue presents, in regard to the pantry stocking thing, mothers trust in availability of supply. If mothers can't trust that they can get continuity of supply of their chosen brand, then trust is broken and they will choose another brand that their baby is doing well with, that they can trust has continuity of supply. Once trust in continuity of supply is broken, and a consumer has chosen another brand they can trust and their baby is doing well on, I suggest that the vast majority of mothers will stick with the brand they can trust that they can get at a reasonable price.

I think the whole extra freight cost issue and daigou problems will have far reaching consequences down the track and ATM may find rebuilding their sales growth much harder than they think.

[tomm]

It was certainly something people did around April / May last year but as we all know IF has a limited shelf life and I'm not sure many people would buy a whole year ahead.

One further issue presents, in regard to the pantry stocking thing, mothers trust in availability of supply. If mothers can't trust that they can get continuity of supply of their chosen brand, then trust is broken and they will choose another brand that their baby is doing well with, that they can trust has continuity of supply. Once trust in continuity of supply is broken, and a consumer has chosen another brand they can trust and their baby is doing well on, I suggest that the vast majority of mothers will stick with the brand they can trust that they can get at a reasonable price.

I think the whole extra freight cost issue and daigou problems will have far reaching consequences down the track and ATM may find rebuilding their sales growth much harder than they think.
You are underestimate the Chinese ways of doing business and how they lives.

[tomm]

I have been very open about me keeping an eye on ATM as a turnaround story.

Can’t see the turnaround yet and imo, sp has a long way to fall before it represents value.

Meanwhile, whatever I read or glean information from, I post (both negative & positive) in the interest of keeping all informed.

You have a problem with that?

PS. Have a look at FBU in recent years - plenty of negative points around but nobody complained, and the reward of investing in a turnaround stock is there for all to see.
Once it is an uptrend confirmed , you won't have a single chance to buy this stock at this price, it will jump 3-4 dollars overnight. Stock trading is a risk , luck and reward to those who do well.

[Ruby]

Beagle,whats your view on Comvita as they operate in a similar space and they note a turn around?
"...Unique business model shows encouraging signs
Comvita has a unique ‘End to End’ business model with around 350 people employed in markets outside of New Zealand to ensure that Comvita is better connected to customers and consumers in market, and is able to adapt at speed to meet local market changes and needs. A particular strength of this model has been evidenced in Mainland China and Asia where Comvita has been able to offset the impact of the challenges in the Daigou market in Australia and New Zealand. This model also enables the business to continue to perform strongly even with travel and tourism being so restricted...."

It was certainly something people did around April / May last year but as we all know IF has a limited shelf life and I'm not sure many people would buy a whole year ahead.

One further issue presents, in regard to the pantry stocking thing, mothers trust in availability of supply. If mothers can't trust that they can get continuity of supply of their chosen brand, then trust is broken and they will choose another brand that their baby is doing well with, that they can trust has continuity of supply. Once trust in continuity of supply is broken, and a consumer has chosen another brand they can trust and their baby is doing well on, I suggest that the vast majority of mothers will stick with the brand they can trust that they can get at a reasonable price.

I think the whole extra freight cost issue and daigou problems will have far reaching consequences down the track and ATM may find rebuilding their sales growth much harder than they think.

[Balance]

Once it is an uptrend confirmed , you won't have a single chance to buy this stock at this price, it will jump 3-4 dollars overnight. Stock trading is a risk , luck and reward to those who do well.

Have a look at turnaround stocks over the years like FBU, DIL, SKO, HGH, PEB, XRO and yes, ATM a few years ago.

Plenty of opportunities as a turnaround happens to get into a stock - plenty.

[JohnnyTheHorse]

Once it is an uptrend confirmed , you won't have a single chance to buy this stock at this price, it will jump 3-4 dollars overnight. Stock trading is a risk , luck and reward to those who do well.

You have absolutely no clue what you're talking about and do not understand risk management. Instead of refusing to look past your nose due to emotional attachment to ATM created from loss, how about you start actively considering the advice of other people on this forum? There are posters here who are some of the most talented retail investors/traders around with decades of experience.

Imagine if you'd pulled your money from ATM when the writing was on the wall and put it into something with tailwinds e.g. HLG, OCA, HGH, BGP (to name a few).

[Beagle]

Beagle,whats your view on Comvita as they operate in a similar space and they note a turn around?
"...Unique business model shows encouraging signs
Comvita has a unique ‘End to End’ business model with around 350 people employed in markets outside of New Zealand to ensure that Comvita is better connected to customers and consumers in market, and is able to adapt at speed to meet local market changes and needs. A particular strength of this model has been evidenced in Mainland China and Asia where Comvita has been able to offset the impact of the challenges in the Daigou market in Australia and New Zealand. This model also enables the business to continue to perform strongly even with travel and tourism being so restricted...."

I don't follow them anymore as their results over the years have been profoundly shocking. They always "talk" a big game...but talk is cheap.

[alokdhir]

Maybe the mothers had plenty stored away in the pantry .....and thought they better use that up fast

Wasn’t pantry stocking a term the industry used a while ago.

Who stocks edible products for almost a year buddy ?? Lol

[Joshuatree]

Heard of cans lol

[Balance]

Who stocks edible products for almost a year buddy ?? Lol

And an expensive one at that!

Can understand some parents stocking up in the beginning of the pandemic but by October 2020, it was so clear that stock was very freely available and ATM was selling stock produced in Jan 2020!

[alokdhir]

Many here are just arguing for the sake of argument ...writing was on the wall after AGM talk and it turned out be more bad for ATM then even the most excuses they included in their AGM 's " All OK " talk ....Any layman could conclude after the long list of excuses or pre conditions they added to the requirements for that " All Ok " talk that its pretty bad but they not letting us know as yet

Finally they had to let us know as cant hide the numbers ...they did so till the last minute on the clock ...18th Dec !!!

Now even that forecasts for FY 21 has been blown away in just 2 months ....So much for their 2 day Halt to crunch the numbers correctly

Zero faith in management and its investor apathy :t_down:

Turn around depends on luck more then anything ...lets hope the tide rises soon ...so it may make ATM ship also rise ..:p

[bullfrog]

Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?

According to google, had to look it up as it's a long time since I had one, it's recommended that babies stop drinking IF at a year old, getting enough nutrition from 3 meals plus snacks a day. So the mothers who couldn't buy ATM last year, the changing brands argument, are not going to be the ones buying IF this year.

ATM is a classic example of complacent leadership, they were in a management bubble long before COVID hit.

[freddagg]

Who stocks edible products for almost a year buddy ?? Lol

I certainly do, almost anything that doesn't need to be stored in a fridge is likely to be kept for over a year, except bread, but I would still have about 100 loaves in freezers.

[tomm]

Have a look at turnaround stocks over the years like FBU, DIL, SKO, HGH, PEB, XRO and yes, ATM a few years ago.

Plenty of opportunities as a turnaround happens to get into a stock - plenty.
As mentioned earlier. If you don't have faith in a stock : SELL NOW . And do not NAG. Or believe and love this stock and just looking for a cheap entry!
People whom have faith in the stock and believe this is it : BUY NOW / HOLD.

[Balance]

As mentioned earlier. If you don't have faith in a stock : SELL NOW . And do not NAG. Or believe and love this stock and just looking for a cheap entry!
People whom have faith in the stock and believe this is it : BUY NOW / HOLD.

Who’s nagging? Nobody is asking you to read any postings!

Look in the mirror though and you will see a holder who should have listened to all the warnings.

One thing is for sure - your track record of posting ‘positive’ assertions resulting in losses means nobody should be taking any of your 'naggings'!

[tomm]

Who’s nagging? Nobody is asking you to read any postings!

Look in the mirror and you will see a holder who should have listened to all the warnings.

One thing is for sure - your track record of posting ‘positive’ assertions resulting in losses means nobody should be taking any of your assertions!
Just very simple question : are you holding this stock or are you looking for an entry ? If neither , why are you bothering post here ? Whatever happens are already happened! The Sp is already taken into account, the Sp is accounted for is from now , its a choice of people whom have faith in the product and the company as this company produced a straight record up until the covid -19 worldwide issue.
Repeating yourself about this issue which effected worldwide is helpless.
As I said earlier before , if you save time to post (whatever it is which people is already knew) and put an oder in, you won't have to repeating people's issue.
This happen to any stocks , not just ATM. If you dislike : SELL NOW. If you like this stock : BUY NOW.

[Balance]

Sounds very much like 'see no evil, talk no evil and hear no evil' approach to investing by you! :D


Just very simple question : are you holding this stock or are you looking for an entry ? If neither , why are you bothering post here ? Whatever happens are already happened! The Sp is already taken into account, the Sp is accounted for is from now , its a choice of people whom have faith in the product and the company as this company produced a straight record up until the covid -19 worldwide issue.
Repeating yourself about this issue which effected worldwide is helpless.
As I said earlier before , if you save time to post (whatever it is which people is already knew) and put an oder in, you won't have to repeating people's issue.
This happen to any stocks , not just ATM. If you dislike : SELL NOW. If you like this stock : BUY NOW.

Repeat especially for you.


I have been very open about me keeping an eye on ATM as a turnaround story.

Can’t see the turnaround yet and imo, sp has a long way to fall before it represents value.

Meanwhile, whatever I read or glean information from, I post (both negative & positive) in the interest of keeping all informed.

You have a problem with that?

PS. Have a look at FBU in recent years - plenty of negative points around but nobody complained, and the reward of investing in a turnaround stock is there for all to see.

[Balance]

As mentioned earlier. If you don't have faith in a stock : SELL NOW . And do not NAG. Or believe and love this stock and just looking for a cheap entry!
People whom have faith in the stock and believe this is it : BUY NOW / HOLD.

Compare and contrast, tomm:

https://www.sharetrader.co.nz/showthread.php?10702-FBU-Fletcher-Building/page51&highlight=fbu

Plenty of negative comments on FBU which were welcomed.

Actually means better entry price into the stock for those who do their homework.

Never get emotional with a stock - it clouds your judgement.

[Sideshow Bob]

Looking at A2 at the moment, to me the most puzzling aspect is MVM.

We all know the issue with daigou/sales/revenue - and the processing agreement with SML. Surely at the moment they don't need more supply capacity.

To re-visit the investor update from the most recent announcement:



Strategic rationale

• Mitigate risk by providing both supplier and geographic diversification
• MVM is a recently constructed and commissioned state of the art nutritionals facility, which will complementour existing supply relationships
• The plant has been independently validated by industry experts as being capable of producing the highestquality nutritional products
• It is well located for access to a growing productive milk pool supported by favourable climatic conditions andwater availability
• Currently majority owned by a respected China state owned enterprise – China Animal Husbandry Group –which will continue as a strategic shareholder and assist with developing the business in China

The plant has been a bit of dog since it has been built, but heard the original holders didn't tip in the capital they promised and milk supply a hodge-podge with everyone at different pricing, among other things.

It obviously has potential, and spreads geographic/supply risk - but what can they do that Synlait can't or couldn't? Have they just taken the opportunity while it has come up?

Or is this more a Synlait story - we all know how how reliant they are on A2 for their cream, but remembering that A2 own near 20% of SML, valued at $170m even at todays SP. Synlait updated the market at the same time as ATM before Christmas and said their IF volumes were going to be down 35% of the year and NPAT would halve (from $75m last year). Synlait have all sorts of issues, but is this a margin grab by A2? Or are they also worried about Synlait in some way?

Would be waaaaay too elementary, but $37.5m less NPAT on a volume drop of 35% might suggest they make $100m/pa out of A2. And SML have alot of other issues with their profitability. But regardless alot of value of A2 in that SML SP. So are A2 trying long-term to take that processing margin to MVM, at the expense of Synlait - with whom A2 don't have a rep on the board.

While I can understand the "Strategic Rationale", surely at the end of the day they bought them because they think they need more product and capacity? The trouble is they probably couldn't tip that money into Synlait without triggering some sort of takeover.

Then in the "transitional period" they are expecting to lose another $10m per annum, until FY 2025 - which seems a long time when the plant has already been up and operating for a few years. Then does A2 have the expertise and experience to make the plant work?

Maybe the plant came for sale and they looked at their cash pile, and thought "why not". Or maybe it is a hedge against the (ever-increasing) competition who own their own plants, can produce A2 and are attacking them on price & squeezing margins - and the start of A2 becoming more vertically integrated, and a more traditional producer model.

Clearly they haven't been willing to spend a large chunk of their cash pile and have a real big crack on marketing and building their moat (ie their brand). Will they roll the dice and go post-Covid?

I still can't work out whether they've just seized the opportunity, or if it is a margin grab, or they need the volume, or that they've just essentially raised the white flag to the competition......or a combo of each.

Still puzzled.....:confused:

[tomm]

Compare and contrast, tomm:

https://www.sharetrader.co.nz/showthread.php?10702-FBU-Fletcher-Building/page51&highlight=fbu

Plenty of negative comments on FBU which were welcomed.

Actually means better entry price into the stock for those who do their homework.

Never get emotional with a stock - it clouds your judgement.
You are making me Laugh.... You have no ideas how much this stock has made money for me so far. In love with a stock doesn't mean anything > I am inlove with this stock for both emotional and material reason.
It is indeed a superb product and this stock you can make money quick! Hope you got it.

[Balance]

You are making me Laugh.... You have no ideas how much this stock has made money for me so far. In love with a stock doesn't mean anything > I am inlove with this stock for both emotional and material reason.
It is indeed a superb product and this stock you can make money quick! Hope you got it.

Very pleased for you then!

So chill - your postings suggest someone stressed out from being in love with a losing stock.

Relax and let the market does what it wants to do.

[Biscuit]

....I still can't work out whether they've just seized the opportunity, or if it is a margin grab, or they need the volume, or that they've just essentially raised the white flag to the competition......or a combo of each.....

Interesting question. Would make sense that it is a bit of all of that - but maybe not the white flag bit. Also a sign that they have some confusion over their strategy? They were an "all about the brand" marketing company now they are a bit of that and a bit of a factory as well. They are a pretty interesting company at any rate!

[Mr Slothbear]

Looking at A2 at the moment, to me the most puzzling aspect is MVM.

We all know the issue with daigou/sales/revenue - and the processing agreement with SML. Surely at the moment they don't need more supply capacity.

To re-visit the investor update from the most recent announcement:



The plant has been a bit of dog since it has been built, but heard the original holders didn't tip in the capital they promised and milk supply a hodge-podge with everyone at different pricing, among other things.

It obviously has potential, and spreads geographic/supply risk - but what can they do that Synlait can't or couldn't? Have they just taken the opportunity while it has come up?

Or is this more a Synlait story - we all know how how reliant they are on A2 for their cream, but remembering that A2 own near 20% of SML, valued at $170m even at todays SP. Synlait updated the market at the same time as ATM before Christmas and said their IF volumes were going to be down 35% of the year and NPAT would halve (from $75m last year). Synlait have all sorts of issues, but is this a margin grab by A2? Or are they also worried about Synlait in some way?

Would be waaaaay too elementary, but $37.5m less NPAT on a volume drop of 35% might suggest they make $100m/pa out of A2. And SML have alot of other issues with their profitability. But regardless alot of value of A2 in that SML SP. So are A2 trying long-term to take that processing margin to MVM, at the expense of Synlait - with whom A2 don't have a rep on the board.

While I can understand the "Strategic Rationale", surely at the end of the day they bought them because they think they need more product and capacity? The trouble is they probably couldn't tip that money into Synlait without triggering some sort of takeover.

Then in the "transitional period" they are expecting to lose another $10m per annum, until FY 2025 - which seems a long time when the plant has already been up and operating for a few years. Then does A2 have the expertise and experience to make the plant work?

Maybe the plant came for sale and they looked at their cash pile, and thought "why not". Or maybe it is a hedge against the (ever-increasing) competition who own their own plants, can produce A2 and are attacking them on price & squeezing margins - and the start of A2 becoming more vertically integrated, and a more traditional producer model.

Clearly they haven't been willing to spend a large chunk of their cash pile and have a real big crack on marketing and building their moat (ie their brand). Will they roll the dice and go post-Covid?

I still can't work out whether they've just seized the opportunity, or if it is a margin grab, or they need the volume, or that they've just essentially raised the white flag to the competition......or a combo of each.

Still puzzled.....:confused:



nice to see some genuine thinking and analysis in the thread.

my thoughts bob are that part of the rationale comes into monopolising milk supply, if A2 don’t control all that milk then it leaves it open to purchase by competitora.

i also think its a great hedge against climate change, one only need look at the bushfires in aus and frequent droughts and how they can upset supply in both aus or potentially synlaits catchment as climate becomes much more variable.

as you said on the face of it it looks strange but i’m sure in a couple of years they’ll have launched IF in the USA and it would make sense to supply it from NZ while also increasing their freah milk sales in the USA being done with fresh milk farmed in the USA. They’re also planning to get it SAMR and china label is still tip of the iceberg.

By 2025 inthink their volume requirements will have significantly increased

[Rawz]

According to google, had to look it up as it's a long time since I had one, it's recommended that babies stop drinking IF at a year old, getting enough nutrition from 3 meals plus snacks a day. So the mothers who couldn't buy ATM last year, the changing brands argument, are not going to be the ones buying IF this year.

ATM is a classic example of complacent leadership, they were in a management bubble long before COVID hit.

Babies 'may not' need IF after 1yr to continue to grow but almost all parents I know continue with at least a night bottle up to 2yrs for the extra nutrients + help get them to sleep.

A better comparison from this Jan would be to compare to Jan 2019.
Jan 2020 had big pantry stocking so little point in comparing against those numbers.

[tomm]

Just Sell and someone will buy.
Just Buy and get the reward.

[tomm]

Financial Writer, Australia | Publication date: Monday 01 March 2021 15:54

Citi has remained unconvinced by A2M's interim results, reiterating their Sell rating and lowering their price target to AUD$7.15 per share.
UBS has a Buy rating and a NZD$15.60 price target on A2M.
Macquarie analysts have taken a middle-ground approach, highlighting the uncertainty which the company still faces, a Neutral rating and AUD$13.84 price target.

[winner69]

Financial Writer, Australia | Publication date: Monday 01 March 2021 15:54

Citi has remained unconvinced by A2M's interim results, reiterating their Sell rating and lowering their price target to AUD$7.15 per share.
UBS has a Buy rating and a NZD$15.60 price target on A2M.
Macquarie analysts have taken a middle-ground approach, highlighting the uncertainty which the company still faces, a Neutral rating and AUD$13.84 price target.




Seem guru analysts have varying opinions

Bit like Sharetrader legends

[tomm]

Seem guru analysts have varying opinions

Bit like Sharetrader legends
LOL hahaahh :t_up:

[BlackPeter]

Just very simple question : are you holding this stock or are you looking for an entry ? If neither , why are you bothering post here ? Whatever happens are already happened! The Sp is already taken into account, the Sp is accounted for is from now , its a choice of people whom have faith in the product and the company as this company produced a straight record up until the covid -19 worldwide issue.
Repeating yourself about this issue which effected worldwide is helpless.
As I said earlier before , if you save time to post (whatever it is which people is already knew) and put an oder in, you won't have to repeating people's issue.
This happen to any stocks , not just ATM. If you dislike : SELL NOW. If you like this stock : BUY NOW.

Last time I checked this was an open forum. Who gave you the authority to attempt to bully others away from using it?

Anybody is welcome to contribute their views on stocks - and it is not up to self appointed watchdogs to control the flow of information in order to ensure a company is up- (or down-) ramped.

I certainly want to see all views on the companies which interest me. In case you do have a constructive arguments - please provide them, but stop to bully others for sharing their views, just because they don't fit into your picture.

Play the ball, not the player.

[xp04]

Speaks for itself :

Posted 11 Jan 2021



Fourth downgrade on the way - new CEO will be going in with his own mandate to clean out every single cupboard of gross mismanagement which we know is there.

How the heck can any well managed multi-billion dollar company not know how bad their stock situation & sales were?

Sales not being achieved = stock piling up because management had no clue.

Getting rid of stock = reduced margins.

Too easy to blame it on Covid & Daigou - allows management & BOD off the hook.

As Craig’s note alerted to - ATM has lost momentum vs it’s competitors.

And all that while executives and directors were feasting on share options, huge benefits and salaries and selling shares after telling all and sundry that everything is good!


So, where are the skeletons? What was so shocking and new in the report that was not known before?

stock situation & sales was known after December's update - nothing new
Sales not being achieved - which one? HY is above last guidance and below last year as was stated before - nothing new
Getting rid of stock - they were opened on this issue as well - nothing new
Too easy to blame it on Covid & Daigou - they did it since September - nothing new
As Craig’s note alerted to - ATM has lost momentum vs it’s competitors - Craig's opinion is nothing more than Craig's opinion.
And all that while executives and directors were feasting on share options - they were doing so since forever - nothing new
Guidance adjusted to lower end is hardly a skeleton.

So were are the promised skeletons by new CEO? If anything he was sitting quietly all QA session as he was not there.
and where is China's ban on infant formula from which you also promised?

[Beagle]

https://www.newshub.co.nz/home/money/2021/03/five-things-no-one-tells-you-before-jumping-into-the-share-market.html?utm_source=taboola&utm_medium=referral#tblciGiDr2WcLbQvUlFW-nHAC1czvgGvCv9lTbFEjikbBjLxqlCCk1EIoy8Kt7POmoZQy&recirc=taboolaexternal

Thirdly, he suggests staying flexible. "Don’t fall in love with your investments. You might have to change your mind as incoming news comes to light. It’s a real skill being able to cut your losses and move on."