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  1. #8581
    An Awesome Cool Cat winner69's Avatar
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    That Herald article - The Harbour man might be right but the Devon man thinks a little differently -


    A2's Milk's share price was sold down to a similar degree in March when news broke that international food giant Nestle had launched an A1 beta free infant formula in China, and today's price action may have been linked to that, said Devon Funds Management's managing director Slade Robertson.

    "The announcement by a2 Milk today highlights that the competitive environment for this business has deteriorated as evidenced by the additional spend that it requires for marketing their product in China," Robertson said
    Last edited by winner69; 16-05-2018 at 05:55 PM.
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  2. #8582
    Gnawing on Bones Beagle's Avatar
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    Devon entitled to their point of view. Harbour analyst just came back from a filed trip to China and I posted their report the other day and they are very happy with what they've seen on the ground.
    Some of the extra marketing spend might be tied in with the new packaging. Harbour analyst said in behind the paywall article that the annual marketing spend was in line with their projections and forecast. I think Harbour are the ones doing the legwork here and putting boots on the ground with multiple trips to China whereas the Devon guy with a vastly inferior return on their funds is just joining what dots he sees from a distance.
    Possibly a bit of confirmation bias from both analysts but I'd back Harbour over Devon any day of the week.
    Last edited by Beagle; 16-05-2018 at 06:04 PM.
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  3. #8583
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    Increased Marketing spend is not, in no way a sign of deteriorating competitive environment... just about every year A2 have increased marketing spend over expectations to obtain a greater share of the market.
    Perhaps when you want to keep the growth at anywhere near these levels you might need to market the hell out of it.

    We will let Devon carry on underperforming.
    Last edited by hardt; 16-05-2018 at 06:47 PM.

  4. #8584
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    A very good reminder over teh past couple of days on why I am not a trader. i couldnt pick yesterdays highs, couldnt pick todays lows. Had a couple of bids in for more ATM and SML but neither wefe met. Never mind. Still happy with overall holding and profit to date and happy to continue holding

  5. #8585
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    Quote Originally Posted by winner69 View Post
    Yep, $240m as at end of December .......probably $350m odd by June

    That’s 50 cents a share in cash
    So to buy 50c in cash per share you have to lay out $11.30 (market closing price today). From a strict cash acquisition perspective, that sounds like a terrible deal.

    And of course the reason A2 are 'debt free' is that they have only recently transitioned from a loss making start up. Loss making start ups are always 'debt free', because there isn't a snowballs chance in hell of any bank lending them any money!

    SNOOPY
    Management top tip: Share the responsibility. Change your name by deed-poll to "Someone Else"

  6. #8586
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    Quote Originally Posted by Snoopy View Post
    So to buy 50c in cash per share you have to lay out $11.30 (market closing price today). From a strict cash acquisition perspective, that sounds like a terrible deal.

    And of course the reason A2 are 'debt free' is that they have only recently transitioned from a loss making start up. Loss making start ups are always 'debt free', because there isn't a snowballs chance in hell of any bank lending them any money!

    SNOOPY
    This loss maker somehow made a profit for 7 out of the last 10 years in business...
    Enough funds and investors were backing A2 to allow for ample amounts of debt if required... not sure what you are on about there either.
    Last edited by hardt; 17-05-2018 at 04:26 AM.

  7. #8587
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    Quote Originally Posted by Beagle View Post
    Devon entitled to their point of view. Harbour analyst just came back from a filed trip to China and I posted their report the other day and they are very happy with what they've seen on the ground.
    Some of the extra marketing spend might be tied in with the new packaging. Harbour analyst said in behind the paywall article that the annual marketing spend was in line with their projections and forecast. I think Harbour are the ones doing the legwork here and putting boots on the ground with multiple trips to China whereas the Devon guy with a vastly inferior return on their funds is just joining what dots he sees from a distance.
    Possibly a bit of confirmation bias from both analysts but I'd back Harbour over Devon any day of the week.
    Beagle did Harbour do lots of field trips to check out CBL before they lost $50m of their investors money? I treat all analysts with a grain of salt - some people are good and others aren't. Harbours performance has been good mainly because of A2 and one swallow, although it has been a big swallow, does not make a summer to blindly hang my hat on.

  8. #8588
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    Weird thing about yesterday’s announcement was that there wasn’t anything really new - they had said at half year sales were going well, margins in H2 would be about the same as H1 and they would spend heaps more on marketing.

    They did feel that analysts, like Sharetrader cheerleaders, were getting a bit too excited and so put some colour around the numbers to temper that enthusiasm

    No surprises (to me anyway) - fits with my $180m to $190m npat forecast.

    Interesting day though
    “I know that I am intelligent, because I know that I know nothing “ — Socrates

  9. #8589
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    Has anyone noticed that Ballamys also took a 10% hit yesterday. This stock has often been compared to Ballamys when charts were involved. Just interested and curious as to why they also went down so fast yesterday....

  10. #8590
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    Quote Originally Posted by Snoopy View Post
    So to buy 50c in cash per share you have to lay out $11.30 (market closing price today). From a strict cash acquisition perspective, that sounds like a terrible deal.

    And of course the reason A2 are 'debt free' is that they have only recently transitioned from a loss making start up. Loss making start ups are always 'debt free', because there isn't a snowballs chance in hell of any bank lending them any money!

    SNOOPY
    Hey Snoopy, I guess you would have downgraded your $3 value for this stock after yesterday?

  11. #8591
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    It's how it goes in the infant formula sector - sell down of BAL as market thought "BAL growth may be slowing too". Not that anyone's growth is slowing at all, just a few people expecting greater rev for second half for ATM. Still exceptional growth and huge potential going forward. This is the share market after all, take the opportunity and buy. This is surely one of the best companies with the most potential on the NZX and ASX. I can't read the future but I'm sure the current share price will look very reasonable in a few months and very cheap in a few years,
    Last edited by NZSilver; 17-05-2018 at 08:20 AM.

  12. #8592
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    Quote Originally Posted by Ggcc View Post
    Has anyone noticed that Ballamys also took a 10% hit yesterday. This stock has often been compared to Ballamys when charts were involved. Just interested and curious as to why they also went down so fast yesterday....
    Market more competitive than most thought ...just saying
    “I know that I am intelligent, because I know that I know nothing “ — Socrates

  13. #8593
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    It's really simple, yesterday's release was mainly in preparation for the investor days, old labels caused guidance to be less than many hoped for, upward trajectory mode activated.

  14. #8594
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    Quote Originally Posted by Arbroath View Post
    Beagle did Harbour do lots of field trips to check out CBL before they lost $50m of their investors money? I treat all analysts with a grain of salt - some people are good and others aren't. Harbours performance has been good mainly because of A2 and one swallow, although it has been a big swallow, does not make a summer to blindly hang my hat on.
    That's a cheap shot. Growth companies are not exactly in over abundance on the NZX and CBL blind-sided a lot of people.
    The record is Harbour have been right with ATM and Devon have been badly wrong. As a long time major shareholder in ATM I would think their analyst has Geoff Babbiage's number on his speed dial and the latter always happy to take the call. I for one am more than happy to take Harbour's analyst's explanation of repackaging at face value and I think the company is on track for 40 cps in earnings in FY19. That's puts ATM on a FY19 PE of just 28 at $11.30. If you can kindly direct me to another NZX stock that's growing faster on a similar PE I am all ears basset-hound-with-ears-up-2-years-old-sitting-in-front-of-white-background-bhbxk3.jpg
    P.S. Beagle's far more attractive than basset's.
    Last edited by Beagle; 17-05-2018 at 09:06 AM.
    No butts, hold no mutts, (unless they're the furry variety).

  15. #8595
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    Quote Originally Posted by winner69 View Post
    Market more competitive than most thought ...just saying
    Without enemies around us we grow lazy.

    An enemy at our heels sharpens our wits keeping us focused and alert

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