Thanks for your thoughts lf.
Its way oversold at current levels, will be interesting what next few days will bring and it all depends on what Jayne explains in her follow on interviews with various media.
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She has already started doing the rounds...not very surprised with the fall...
Its managing director Jayne Hrdlicka said investors had little reason to be disappointed with the result.
"I don't think you can argue with the quality of the result, either with what we delivered in fiscal year 19 or the investments we're making... we don't focus day to day what happens on sharemarkets," she said.
https://www.rnz.co.nz/news/business/...a2-milk-result
And she is right the company is just getting on with growing an awesome business, they cant divert attention to medicating a Schizophrenic market.
Congrats to all the low 14ers. You are already up a good 60c. So where to from here, after all the wobblies have wobbled? Looking good to me with a new up trend forming from 1.10 this arvo.
I'm more than a little partial to a cup of milk with my supper and recently switched to A2 milk and the marketing hype is true as far as I am concerned. Feel the difference !
Still got to get you to trade shares in the cafeteria at Coronet ski field, on the chairlift going up, (nothing new so far) but also while skiing downhill on the M1 lol...I have to see this trade while skiing happen and am offering my guide dog services for free to ensure it does :D
Tomorrow will be when the official downgrades are released by the analysts and brokers - recommendations based upon revised lower forecasts & valuations will drive the sp over the short term.
A quick calculation shows the impact of lower EBITDA margin (-3.4%) of $56m on F20 forecast revenues of $1.66 billion. That will translate to an adverse NPAT impact of around 11% in F20.
Can see why the market shaved 12% off the sp today.
Then there's the increased marketing spend flagged for F20 (from 10.4% of sales to 12% of sales) = $26m increased cost. The unknown is whether this is to maintain or accelerate current sales trajectory.
Anyway, we will see tomorrow - can imagine the analysts furiously reworking their numbers (after being very positive) to less lofty numbers after discussions with the company.
https://www.moneymorning.com.au/2019...ions-asxu.html
"A2 Milk expects FY20 EBITDA as a percentage of sales to largely align with their 2H19 EBIDTA margin of 28.2%. And The Australian Financial Review reports that the EBITDA margin outlook consensus was 31.6%. Consequently, with downgrades potentially in the offing, the A2 Milk outlook section of the results presentation played a big part in today’s fall."
Balance you talk as if the market is rational and knows what it's doing, I'll let you in on a little secret, most of the time it doesnt. PS-Watch the big game players like UBS/Goldman lower their targets to mop up as many cheap shares as they can and extract mega fees from the shorters at the same time. Lol
The market reacts short term to what the brokers and analysts say - recall how we were all rejoicing at the sp going ever higher a month ago as one broker after another issued upgraded valuations?
We are going to see the opposite from the brokers tomorrow so bracing oneself for the ride is simply prudent - irrespective of whether the market is rational or irrational.