Gee!
And you are invested in ATM? :eek2:
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Thanks Carrom for that link. What I get from that article is converting a herd is “profitably neutral “ but farmers should at least start using the A2 insemination from now on and eventually A2 will be the standard and A1 will possibly be at a discount.
Couta, I understand what you are saying is that A2 ltd is enjoying huge growth and potential growth as it has worked itself to be “johnny on the spot” before the inevitable mainstreaming of the product, albeit some time away.
Left field, thanks for your reply too but I didn't call the industry a sunset one ,so we at least agree there. I called the ATM company ,a sunset company the way I see it.
My 2 main concerns I have as a potential investor:
Firstly, At some point the growing( although slowly from the link above) herd conversions will erode the current A2 premium margins with increasing supply. So it's a timing thing of optimising when to sell up as it naturally transforms from an intellectual property type rating to a seller of a commodity type rating. As I, and probably most here, have no superior global industry knowledge or contacts to get a heads up on when to exit the door first. It is then a blind and nervous position to be in with a lot of finger crossing. Perhaps the optimal time has even already passed?
Secondly, if A2 milk does become normalised to the global market, then surely the A2ltd “brand” (and that's all this company is as I understand it) becomes meaningless as other competitors offer A2 as a standard commodity to at cut throat margins.Therefore A2ltd brand has become irrelevant and its IP worth no more than the brand “NZ”.
I can get why you have a truckload of HLG Couta but ATM seems an outlier to me. It would just cause me sleepless nights.
It will be a real tragedy if ATM is re-rated from it's current PE (~33 not accounting for the pile of cash and Synlait shares) down to those of a boring company like Nestle (PE ratio 31).
Totally agree as a few of our folk are worry that some A2 copy cats will harm A2MILK ATM.NZ . I was one of them , then I realised that : there is no Karicare A2 or Aptamil A2 or Nestle A2 was even making any top 10 of 1 day sale 11/11,
and infact A2 was almost taking the number 1 spot Aptamil , mean the time A1A2 BECOMES HISTORY is near!
I love it when things not going ‘quite right’ with the A2 share price and doubt about how great A2 are creeps in and many seek self reassurance.
I just sit back and relax and buy some more as A2 share price will be 30 bucks one day
Market is always forward looking and forward PE's is 23.6 https://www.marketscreener.com/NESTL...34/financials/
and Danone's is 18.0 https://www.marketscreener.com/DANON...de&mots=Danone
ATM is currently 28.8 https://www.marketscreener.com/A2-MI...apide&mots=ATM
You might have to wait just a "little" while mate. Danone is a 100 year old company. https://en.wikipedia.org/wiki/Danone
I go back to my kennel now, I only posted to correct the significant inaccuracy in the PE quoted by another poster.
My source has rather different stats for nestle than yours - current PE ratio on 33 according to Bloomberg Vs your link's 24.5.
https://www.bloomberg.com/quote/NESN:SW
Sadly I don't have time to dig into the discrepancy just now, suffice to say the figure of 33 seems to be widely reported
Maybe they are quoting last year's historic PE ?
Just agreeing with myself
Comparing PEs for A2 and Nestles is stupid and a meaningless exercise
Completely different business
One sells milk ...the other sells things from milk to lollies and chocolates to drinks to pet food (andother thinfs)
Once A2 into pet food maybe a reasonable exercise