sp will back to $5 level soon, china birth rate drop 16% first half of 2021, local players gain market share, daiguo channel won't recovery in near future......
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sp will back to $5 level soon, china birth rate drop 16% first half of 2021, local players gain market share, daiguo channel won't recovery in near future......
Given growth is gone, what's a reasonable new PE and share price for ATM?
ATM could do well to heed the way CVT reset its business. Sure it is a much smaller enterprise, but it recognised what it needed to do to smooth out the supply of raw material which was being impacted by the variability of the weather. Investment in marketing (at 15% of sales revenue) which so many companies fail to recognise is a key driver in increasing market share and the future sustainability of results. The markets that CVT operate in are almost exactly those that ATM operates in, and in general both are providers of single 'observable' products (milk and honey - that sounds like NZ all over doesn't it - the land of milk and honey, only ATM has gambled too heavily with an over-reliance on a single market, which all marketers will tell you will eventually have a predictable outcome). Even though CVT has a wider range of offerings in related health products, its premium manuka honey brands is where it will achieve flagship results, off which they can leverage the rest of their product range.
Disc. Sold ATM in 2020 and topped up heavily in CVT to average down a very high entry point made some years ago. It was worth the wait.
yeah I agree, wouldn't be surprised if we see pushing 20% drop on ASX today. A lot of hope just got squashed this morning. The upside potential now seems a long way off and a lot more risk involved.
Excellent question. I think AT BEST we're in a very low growth environment for ATM, maybe no growth. No growth fair PE is 11.5 in my book. I would ascribe a PE of no more than 18 to a low growth company.
These are the metrics I use and have worked extremely well for me over many, many years.
Maybe then can do 20 cps in earnings in FY22, maybe not. Choose whatever PE you think is right but I think a forward PE of 30 in the current environment with all known information, trends and risks is absolutely nuts !