Originally Posted by
Snoopy
....One rule of thumb I have is that in the 'long term' in a mature market, PE deflation will see the market value of all the suppliers equal the sum total of total market revenue. If ATM has a market capitalization of $NZ10 billion and the total size of the infant formula market in China is $NZ10 billion, this implies an expected 100% market share for ATM infant formula is already priced into the share. This assumes a static overall infant formula market in China. No doubt the overall infant formula market in China will grow over time. But this metric does show just what sort of sales growth will be required to justify anything like todays ATM share price. I assess ATM as being uninvestable, for now. Not because it is no good. But because there is no credible fundamental data than can be used to justify the current share price, or anything close to it. In my assessment conservative sharemarket investors, and that includes those who invest via index funds, should have 0% of their wealth invested in this company.
Give it another couple of years and that data may come through though!.
SNOOPY
discl: Not a holder, not looking to buy.