25 cents seems so insignificant relative to a $11 plus share price doesn't it
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Mmmmm not quite.
If you look at some of the forward projections as posted by Beagle you will see that the market is pricing on a forward PE which looks at some of the following;
· Likely sales growth between 30 to 50% = $NZ 1.3 to 1.5 billion. Korea will begin pumping and Frontera will re-launch A2 Milk in NZ from Aug 18. I also expect considerable hype re new A2 milk products (diversifying away from IF and raw milk.) There may be further Asian expansion, possibly Japan and possible news of a strategic partnership there. USA and UK will continue strongly.
· Likely FY19 EPS 35c to 40c (NZD) Some say .50c!
· Mounting cash reserves $NZ 500 mill. Expect some announcements re this. Furure dividends ( Maybe .10c?) More likely IMO is an investment in another related company…. (or both!!)
Current price pretty fair IMO. Forward price of $15 by later this year still my target.
they will have to ramp up marketing spend way more as global competitors enter the space in china more forcefully also entering new markets will require way more spend also to compete against bigger competitors.
the only reason i would see the price gaining from here is on the back of the bull market just like most other shares.
If I had a spare $8 billion would I buy A2 today and expect say a 10%pa return for many years into the future?
I don’t think I would
Maybe there is a ‘greater fool’ who would pay $10 billion for A2 in the next year or two ...if I knew that I might pay $8 billion today
In saying this I still have my ATM shares ....obviously only looking out for a short to medium term return
All of those companies to be fair have more defensive properties than ATM. Hard to get comparatives for ATM in their sector. I guess the relative PE of BAL is something to think about. My sense is the ATM SP is about fair and reasonable at the current level and its should move up in line with earnings growth over the next few years. For what its worth I have a 6% portfolio allocation and about 4% to Synlait. I think that's enough for me and am disinclined to add to either right at the minute.
nothings changed and there were no surprises... good result as per normal.
The theory that A2 will always land at the top of their guidance remains in tact and Analysts sales expectations were beaten.
They were effectively (not literally) given a few months to selldown all the old label product in China and can only introduce new label to the shelves from a certain date, there is no real option to simultaneously sell both labels on the shelves in the 9,100 Chinese Mother and Baby Stores that stock A2 IF. old labels do not meet new regulation requirements and there is a small window where both the new and old label can co-exist on shelves... but if you decide to sell both you risk selling new labels instead of old possibly leaving many millions of worthless inventory on hand.
a2 Platinum is now stocked in over 9,000 Mother & Baby stores in China (was 6,700 at 1H18 result).
Disc: own a lot of A2 and not selling anytime soon.
My partner is half Chinese with parents in China and sister ( a daigou ) in Australia
All of whom are heavily invested in A2M.
lets hammertime it
Could easily fall another 5-10%, next support around A$9.50. I expect some funds to start trimming weights in this. I better start raising some funds to buy the next dip.
Why not, specially if you are shorting or looking to add more to your portfolio at lower prices. (Lots of Bot manipulation today to support you.)
Meanwhile this article provides another viewpoint. GLH I'm signing off to take a well earned holiday.
(Disc - Holding, but now 'freehold' :t_up:)
Average analyst forecast sales for FY19 is $1.238m so if they can do the $1.4b that Craigs are estimating we're going to have a very good year ahead as other brokers upgrade. Happy holiday :)
http://www.4-traders.com/A2-MILK-COM...22/financials/
Another run of the mill day with a 44c spread, so erractic yet so consistent.
A great article for the weekend.
https://www.afr.com/business/retail/...0180713-h12myu
GS Latest TP NZ$13.30