Why were you so sure that would happen?
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A huge gain like that is usually an over reaction and that brings out the profit takers and subsequent drop. The share is obviously worth more than what has been trading at in recent weeks but that value is yet to be determined.
What a roller coaster! I put a sell in at $3.00 when at $2.60 (11am). Had a feeling that when Ozzie opened it would (could) jump again. What about the "poor" souls who got in at $2.50+.... Guess I'll just have to wait until their next forecast upgrade in 2 months time.
Last year the share price was 50c (if you believe that figure was fair value). Revenue for HY2015 was $74.8m. Now (HY2016) $139.2m. But infant formula now a much greater proportion of revenue: Now 53%, up from 22% in HY2015. So lets say profitability on product has doubled overall. That means 'equivalent revenue' of 2 x $139.2m = $278.4m. That makes a multiplication factor of :
$278.4/ $74.8 = 3.7
3.7 x 50c = $1.85
So it looks like the share price increase has outstripped the underlying company performance.
China at last turning an EBITDA profit (not the same as a NPAT profit).Quote:
- Chinese IF (infant formula) market update and how much further potential still lie in there
EBITDA Margin: 1.2/8.4 = 14.2%
Compare with the same figure for Australia and New Zealand
34.5 /127.9 = 26.9%
So heaps of the most profitable line going to China. But even with next to no infrastructure costs borne by ATM, the Chinese market is still only half as profitable as the home market. It might be worry if ATM started selling ordinary milk in China then. They could start racking up some big losses on that.
Big increase in the losses in the UK and USA markets. It's all in the market development plan they say. Fair enough, but it still looks like a long hard grind in the UK and USA from here. Looks like USA in particular is in trouble.Quote:
- US expansion plans and how they are tracking
- UK market performance and any plans to launch IF into that region
ATM still looks very much like a one trick pony still to me. The ANZ market is looking good, although how much that is being propped up by indirect baby formula sales to China is unknown. Actual direct sales to China looking good, but not looking like that market will overtake ANZ (or should that be ANZ/China as one).
Actual NPAT of $10.1m was a positive surprise. That should stay the need for any more capital raisings.
Overall though, it looks like at north of $2, the share price has got way ahead of the underlying business. I re-iterate my warning to shareholders. Fundamentally ATM is severely overvalued, and still has the potential to halve in price overnight.
SNOOPY
Almost 15% of all shares traded yesterday on both markets (87m in Aus, 15m in NZ). Big big volume day!
Added some useful perspective yesterday mid-morning and may have got a few sellers thinking...what with AIR about to announce ~ $500m before tax next week...kind of puts $10m after tax into perspective doesn't it. Didn't one of the major brokers value this a little while back at ~ $1.10 ?
Declared after tax profit is not the measuring stiick for ATM. Management policy seems to have been to spend all profits on market development, and in doing so let NPAT reduce to zero. Hence in my summary of results, I noted an actual profit as positive surprise. The half year after tax profit profit could have been nearly double $10m if ATM pulled out ofthe USA and UK. But if they did that,there goes the growth premium....
That $1.10 broker valuation IIRC was assuming the growth markets of the UK, USA and China all performed to perfection too.
ATM as a company is a great example of how to develop a consumer business. The capital raising at above the prevailing market price last year was a master stroke. The problem I have with ATM is not with the product, roll out strategy or management. It is with the public, mainly aussie speculators if the evolution in the share register is to be believed, driving the share price up to a level that is so completely divorced with the reality of the business, that it has got crazy.
Some here have criticised Freedom Foods for selling out too cheaply. But these guys would have a pretty good idea of what the company was worth. They chose, on balance, to sell and reinvest elsewhere. Just because the share price more or less doubled after that doesn't make Freedom Foods fools. Markets do not always behave rationally with small cap (in ASX terms) shares like this.
SNOOPY
I find it somewhat interesting that a company with the growth prospects of ATM..
Who just released a 1Q report like the one this week is sliding backwards in share price..
I am not surprised at all. Its a traders stock right now and if you are a holder, you have had multiple chances to cash in on the frenzy. A double top is now in place so big resistance around $2.50 and potential for this rocket to come all the way back down to earth if it fails to hold onto $1.70.
Market hubris. Knowing when its silly something to learn I guess, Lots of buyers out there now who have watched their investment slide back 25% in the space of a few days will be hurting.
SUM also down from a hubris of around 4.25 last year. Analysts have ATM at around 1.87. Funny that.
Both A2M and BAL are at the mercy of traders (shorters) these days. They're having game with those two stocks.
However, at the end of day it all depends on your investment objective and what's your margin of safety is. I for one not too concerned with day to day movements as I'm in for long haul (having got mine at 58c and few more at recent capital issue at 68c).
I am not sure why you singled out SUM...RYM is also down about 5% from 6/8/2015 when SUM was $4.25. Which perhaps suggests a sector re-rating (unless hubris also affected RYM?). However with ATM, it does seem as though the good set of results did not matter as far as the current traders of this stack are concerned.
Disc:Hold RYM SUM ATM
If the Market offers it back at a lower price what it accepted last time at a higher price then why not just buy it again?
Farmers Weekly
http://viewer.zmags.com/publication/...c#/c965c23c/11
Great read.
UK break even end of June. Then its likely PROFIT. Not sure how SNOOPY will spin next years UK profit into a loss? Surely will be an interesting read.
A2 now successful in 2 markets, or 3 markets - fresh milk Aus, powdered milk Aus, powerdered milk China (and potentially fresh milk China). Soon to be 4 markets with fresh milk UK. While US is going slower than expected, the fact that they have, or about to, succeed in 2 similar western markets is an excellent sign.
So not sure how SNOOPY arrives at the conclusion "one trick pony"?? About to make ~$47m from ~340m revenue while still losing money by supporting not yet profitable markets. Likely to have been $60m profit if they weren't in UK/USA. Growth rate of ~100%. Supply side shouldn't have a problem for the next 2 years, according to the article and they know how much they are growing.
Surely this is the sort of company statistics investors like us should be salivating over.
A2 has grouped the UK and USA markets together going forwards. So it won't be possible to find out how profitable UK is. I would virtually guarantee that the UK and USA together will still be loss making though.
We hear stories of Chinese Australians buying up infant formula in Australia and selling it on the black market in China. Meanwhile A2 is establishing their own sales channels in China. It is not clear to me how opening up A2s own direct sales into China will affect the sales of infant formula in Australia. It could be a zero sum game with growth in direct China sales being directly offset by falling infant formula sales in Australia. Also remember that A2 have no production in China. All China product is sourced frm Australia and New Zealand.Quote:
A2 now successful in 2 markets, or 3 markets - fresh milk Aus, powdered milk Aus, powerdered milk China (and potentially fresh milk China).
A2 declare 'Australia and New Zealand' and 'China and Other Asia' as separate markets. I put it to you that it is really just one market: Australia and New Zealand, with some export sales to China. The infant formula market in China is far less profitable than the "Australian and New Zealand" markets, despite infant formula being the highest value product. It seems unlikely then that selling lower value product into China (fresh milk) can boost profits significantly in that market.
This is where my 'one trick pony' comment comes from.
EBITDA break even in the UK is not really succeeding. EDITDA break even just means making a smaller loss overall.Quote:
Soon to be 4 markets with fresh milk UK. While US is going slower than expected, the fact that they have, or about to, succeed in 2 similar western markets is an excellent sign.
Again EBITDA profit is not the same as after tax profit. Growth rates of 100% ultimately means 100% more cows in the supply chain. Not impossible. But not as easy as a software producer who can pull their resources out of cyberspace.Quote:
So not sure how SNOOPY arrives at the conclusion "one trick pony"?? About to make ~$47m from ~340m revenue while still losing money by supporting not yet profitable markets. Likely to have been $60m profit if they weren't in UK/USA. Growth rate of ~100%. Supply side shouldn't have a problem for the next 2 years, according to the article and they know how much they are growing.
All the salivating is already on the table. The share price today already assumes real profits in the USA and further growth into other markets not even on management's horizon yet. I'm not saying this won't happen eventually. I am just saying the share price has got ahead of actual profitable growth on any realistic time horizon. Come back in ten years and $2 might look like value. Until then ATM looks like a money losing proposition for investors who jump in today, even if the company in operating market terms continues to develop according to managements plans.Quote:
Surely this is the sort of company statistics investors like us should be salivating over.
SNOOPY
Its also worth noting that the shareprice has hit 2.50 and just lately 2.60 both times it was slammed back down to where it is now.
With the latest result just out, and nothing special happening to make the share price continue from here,I think the growth is built in at the moment. The simple fact that the price didn't linger at 2.60 and falls right back to where it was before the announcement,tells me it isn't going any further for the time being. Most people would have to be very happy with where it is now anyway.
Its very popular in aus at the moment, sentiment is strong and they have released 3 substantial profit upgrades in 4 months, with another likely to come soon. Add in instos, I think this stock has got plenty of volatility ahead over the next 3 months, with a bias to the upside! IMO if a2 continue on this trajectory for the next 12 months we could see it trading at a PE of 60-80 (not Snoopy's PE!!), such as many other growth companies on the ASX.
On another note - I have moved from my little hick town to Coffs Harbour. I was in Coles today and noticed a2 400g tins of a2 platinum (usually 900g), sold at a price premium of course. They are the only brand from what I can see who have these small tins - their profit margins are being fed meat pies hourly!
Yep sorry that wasn't too clear. I thinks its safe to assume that with formula supply increasing monthly, direct sales increasing heavily, and UK reaching breakeven - they will smash forecasts and fetch a NPAT in the high twenties. Hence why I think we will see a further profit upgrade in the next couple of moths. Also Interesting to hear a2 discussing the possibility for dividends in the not too distant future.
Bloomberg writes about A2 milk
http://www.bloomberg.com/news/articl...he-dairy-world
This is what Bloomberg have to say in reply ....
Hi thanks for your feedback. ATM certainly got its start in New Zealand and retains an office in Auckland but all its key management are in the Sydney headquarters now, including MD Geoff Babidge. Australia is also, by far, its main milk market. The story details how ATM was started by two Kiwis and how it is also listed on the NZX.
Pavlova, Pharlap, Crowded House, ATM...what next?
At least their spin doctors are in NZ.
2 board members in NZ
2 in Aus
1 in UK
http://www.stuff.co.nz/business/farm...he-dairy-world What a company :)
The spin team is doing a great job
I think the most significant point about this excellent article is that it includes a quote from Fonterra boss Theo Spierings dismissing A2 as just a "marketing concept".
That surely puts to rest any idea that Fonterra might make a takeover bid for a2MC, or might launch its own brand of A2 milk in competition with a2MC.
It will also be seen as a rather curious and ignorant comment to make, especially by NZ dairy farmers who have been quietly converting their herds to A2 and are looking forward to a2MC expanding its operations in NZ as from next year with higher payouts than Fonterra's pathetic offering.
Dream publicity going bacterial.....On Bloomberg as well as...... isa extra omnifeed.com, .....global advisors, .....metro tell,muckrake.com, ..... reddit.com ....... dumb short... dream builder portal.... google .... finance geek.....hotcopper....africanewshub....etcetcetc
The Milk You've Never Heard of Rocking the Dairy World
Looks like Challenger quietly lifting holding - up from 5.15% to 6.21%
Seems as though the shorters on ASX have got a temporary lid on sp.
Where can you buy it in Christchurch, New Zealand, I have tried a few supermarkets but no luck yet
My understanding from earlier discussion was that it's stocked by most Countdown and Fresh Choice supermarkets in Christchurch. The NZ national processors of A2 milk, Fresha Valley, have a close tie-up with Countdown and have said if your local Countdown doesn't stock it, just ask the store management to do so.
help me out here guys, Atm will need cash within the next 12-18 months to sustain revenue growth, is it coming via CR or some sort of Partner? Have I missed something to value this company at 1.3 billion?
I could build and sell 116m worth of houses but if they cost me 125m, not really good for the long term. (referring to HY Cash Flow).
http://www.nzherald.co.nz/business/n...ectid=11599487
More free publicity and exposure....
A very good business article in todays N Z Herald on ATM , can some paste the line for this non techie ?
Interesting discussion about 'grey market' exports through Oz. This has been a problem for some time. The Australians are a bit behind the times in regards to reg in this area.
They should look at something like ASX:BFC and their Brandlock system etc. You've got to get out ahead of these things before your brand suffers.
I suspect the Ozzies are reviewing this closely and its just a matter of time before they introduce tighter controls around exports of commercial size shipments to China. Especially given they have a FTA agreement in place now. I know there is a NZ MPI discussion document currently seeking industry input which will further enhance/tighten the control of dairy material and products to overseas markets.
Thank you ,I'll have a look tomorrow
H has this company ever suggested that they would consider paying dividends once they're no longer in growth mode?
Wouldnt it be prudent to hold off on a divvy? Form an established position in their strategic markets first?
Alright people. I am so curious about the milk. Today, I went to countdown and grab a two ltr Fresha valley A2 milk. I am not a big milk drinker. As too much milk, made my stomach uncomfortable. Just normally add it on tea or coffee.
My wife is worst, farting all day if she drink normall milk. She could handle UHT one but not too much (certain brand) Again, just on tea or coffee. If she drinks anchor, u guys don't want to be next to her:D. We are not a lactose free, we both could handle small amount of milk. Our doctor advised us to drink milk (osteoporosis prevention when u get old)
Now, my initial verdicts about A2:
1. Price is okay, $4.90 affordable.
2. Taste: sweet, smooth, flavoursome, deep milky and creamy taste. I really like it.
3. Consistency: thicker compare with my son's anchor milk.
Will post the result next couple days. Me n my wife will drink A2 that I bought today.
Wish us well guys.
To be continued........
Keep us up to date on the crud vapours situation. Also, you may consider updating the folks at poo-gas-weekly.com as they'll be on the edge of their seats (but then those guys always have an awkward seated position).
Seriously though, I'm curious if the science actually helps people, or rather, that people can see the point of difference for themselves. Or smell the point of difference, in your case...
I've posted it before, but A2 seriously helped this cynic when I developed either mild crones or irritable bowl syndrome. A2 is now the only cows milk my tummy can handle.
For what it is worth my Doc is of the opinion that A1 related digestive problems increase with age, so look out all you young ones!
I see A2 is now advertising it's ice cream on Australian free to air TV,
Bit perplexed of the opening price today, as I thought it might open at 1.85 based Aus last evening close of 1.675 with current FX rate of .9060.
Let's hope this is you and the wife by the end of the week:)
https://www.youtube.com/watch?v=wd8TJHP_dp0
Just returned today form visiting the grandkids in Perth, local TV were showing a A2 add on TV, I thought it was a very plain sort of add, rather telling it’s here as opposed to trying to sell the product. if I recall correctly the add didn’t offer any benefits that may be gained by consuming this milk, or were it could be purchased.
Who were the lucky ones picking up at $1.69- $1.70 yesterday? Went down to Te Awamutu today and talked to a couple of farmers who had never heard of a2 milk. So told them to change over their cows, and go home and google it.:)
Okay people! We both had finished the milk. I can confirm that we both don't suffer any discomfort in our tummies. No gassy or hurt tummies. In fact, our digestion system are much better! For the first time! Feel so good with dairy now! To be honest we won't be feeling so good before drinking milk, thanks to a2!
in my opinion, this company is going to be big! Only if they can do the marketing well! Many people in the world is suffering symptoms like I do when they drink normal milk! Especially the Asian!( how do I know, because I am one of them in the world:D
i might sell my exiting shares n invest in this company! Please don't follow me, go and try the milk yourself then decide whether the milk is the exactly what I mentioned before. Only countdown sells it.
Very bright future this company! Below is the recent presentation from a2m.
http://www.asx.com.au/asxpdf/2016031...34t22hqdrp.pdf
Very interesting feedback King, thanks for sharing your trial result with us. Is this digestive discomfort with dairy milk fairly common with other Asian friends/relatives/people that you know?
Like I said......80 to 90 persen of them....again how do I know? I used to run a catering company, cater to Chinese, Japanese, European and Korean tourists...most of them could not handle normal milk? Again, how do I know? European groups tend to drink more Milk in the breakfast time. How do I know? I was the one order the food! I did ask many of them why they could not drink milk? They said without speaking English with one hand on thier tummies with uncomfortable face! For sure even u could not speak thier language, u certainly knew what the heck it means!:D
Anyway, my KiwiSaver provider sent me an article. I thought I share it with u guys!
We've all felt a little like Alice over the last while. There have been moments when we've questioned the sanity of the share market, and moments when we've had our sanity questioned. Share prices have whipsawed on fleeting sentiment often driven by little more than the latest headline. Understanding the difference between investing and speculating is key to capitalising on these conditions.
As investors we establish the worth of a company by focussing on its ability to generate profits, or "earnings power". Earnings power evolves gradually with changes in the company's markets, and its competitive position. Consequently the worth of a company is relatively stable in the short term, and changes steadily over the long term.
In contrast speculating starts with a focus on share prices. Over the short term share prices are driven by people's appetite for risk which, being a human emotion, can be volatile. With little understanding of the companies issuing the shares he owns, the speculator explains changing share prices in terms of stories which was rely more on headlines than reasoned analysis.
Very interesting article right?
"A company by focussing on its ability to generate profits, or "earnings power". Earnings power evolves gradually with changes in the company's markets, and its competitive position" I think we have found the star! A2 milk company!
Congratulation to all shareholders that got in when it was still $1 ish! So jealous!
Haha, nothing like first hand observation to see the potential of a product ala Peter Lynch style.
I'm getting the feeling Asia may really be the place for A2 to be if they can control, market and co-ordinate it right.:)
http://www.asx.com.au/asxpdf/2016031...34t22hqdrp.pdf
Here it is guys, the next big thing in their growth plans.
Released to ASX late in the evening outlining US investor presentation.
Might see that first thing on NZX tmrw.
Thanks King1212 for sharing your invaluable first hand experience. Don't want to make you feel jealous, I'm one of those people who got in under 60c mark, mind you it was not all smooth ride was sitting on paper loss for more than a year or so before it turned around and never looked back.
I find the shareholder make up interesting for a company that was first listed in 2004 on the NZX Alternative Market, then on main board in 2012, whereas it was first listed in Aust. 2012.
64.7% of the shareholders are Aussies. and 32.5% are us Kiwi’s, ……………
Ps got in at 22 cents Sept 2011
All I need now is for Blis Technologies to align themselves with A2 and integrate their probiotics with/in A2 infant formula and I'll have a "cash cow"!!! It'll be a match made in heaven..
Added to the ASX 300 and the All Ords today.
I think its not until close of play on the 18th.
Gunny
sweet..just on time eh after my experiment then good news!! Managed to grab some this morning before it spiked!
Funds that track index will have to acquire shares.
I suggest greater credibility, exposure, being one of the big boys. Becomes a stock of heavy wait that should attract greater interest from investors that may only play in this board. The US forum presentation will also hopefully attract new investors.
Gunny
Index changes are at/after close of business on the 18th Mar (next Friday).
Some funds will actually do their re-balancing in the end of day auction on the 18-Mar. You can get some pretty big, but usually temporary, movements in price.
Best Wishes
Paper Tiger
You can get some pretty big, but usually temporary, movements in price.
Best Wishes
Paper Tiger[/QUOTE]
That's par for the course on this baby....
So PT, we have a two hour time zone differential to manage, plus the possibility that a lot of the action may occur late in the day in Australia. That really leaves us the weekend to consider our positions after the ASX close on Friday night, right?
Cheers
Trigger
Transferred from RAZ on the HBL thread page 482 no.7222 on 10/3/16. I hope they are killing a1 cows and not a2 cows. I get a funny feeling a lot of farmers out there don't know the difference. This would be a good time to separate the two if they have to kill a lot of cows. Fontera should tell their farmers to do that. What do you think?.....Let them know on the farming news?
:scared:Oh no.....! We need to do something! Does anyone know how to contact the farming news! What a waste of a2 cows. But if they slaughter a1 and a2 cows, that means will be less a2 cows producing a2 milk, means supply is low and demand is high...equal to $$$$$$!