ATM - A2 Milk Corporation Limited

[minimoke]

Check ASX announcements might be some extra Xmas cheer for holders .

Up 3.4% in Aus. Plus admission to ASX 100. Should be a good day tomorrow dragging me back to break even

[Leftfield]

Bugger, was hoping ATM would stay in the 7.60's longer to enhance my choice in the 2018 stock picking comp.However, with inclusion in the ASX 100, new CEO a year away, and the Lion court case over, ATM SP now looks ready to climb a tab earlier than I expected.

[kizame]

Yes, it's a technical breakout (up) of that wedge formation. Upwards from here you reckon? No significant TA resistance above here until the double top. Interesting times, a nice correction for the faithful to buy into, or a false breakout and more downside to come? Odds are on a recovery imo, until the recent highs. Especially if the market likes the CEO announcement.

I'm thinking slow and steady climb,and barring any market disturbance, a break through resistance, as Feb update approaches maybe a climb to 9.50 (purely conjecture)based on ForBar's target.

[whome]

hardt, I have been using your much appreciated analysis 25-11-17 #7205 as a base doc for fwd calcs and projections on ATM. For info, is there a rule of thumb for choosing fwd PE no.'s to use in calcs ie you used x30 & x40 when current PE is around 60?

[sb9]

Up 3.4% in Aus. Plus admission to ASX 100. Should be a good day tomorrow dragging me back to break even

Its all bit bizarre re ASX 100 rebalance in relation to A2m's admission. Last week announcement said there are no changes to ASX 100 and y'day A2M comes out and says they're admitted into ASX 100.

Whom to believe.....A2M or S&P, whatever it is someone has stuffed somewhere along, let's wait and see for clarification around this.

[Balance]

Its all bit bizarre re ASX 100 rebalance in relation to A2m's admission. Last week announcement said there are no changes to ASX 100 and y'day A2M comes out and says they're admitted into ASX 100.

Whom to believe.....A2M or S&P, whatever it is someone has stuffed somewhere along, let's wait and see for clarification around this.

Too big a call that ASX and A2M have made a mistake.

Seems like there has indeed been a monumental stuffed up some way.

The short sellers have just got their arses burned again?

[sb9]

Too big a call that ASX and A2M have made a mistake.

Seems like there has indeed been a monumental stuffed up some way.

The short sellers have just got their arses burned again?

Guess that what happens when you outsource these activities to S&P, but the way it stands looks like there are 101 stocks in ASX 100, not 100...who dropped out to include A2M?

[dreamcatcher]

Has anyone else noticed all the stacked 10,000 buyers/sellers in the ATM market depth today

[hardt]

hardt, I have been using your much appreciated analysis 25-11-17 #7205 as a base doc for fwd calcs and projections on ATM. For info, is there a rule of thumb for choosing fwd PE no.'s to use in calcs ie you used x30 & x40 when current PE is around 60?

I think you may be mixing up my charts forward PE for the trailing PE which is currently 60x

The Forward PE for 2018 is using the earnings per share of 2019 etc..

TM.NZX	2017	2018	2019	2020
EARNINGS PER SHARE	12.29	22.95	31.55	40.75
FORWARD PER AT $850	37.00	26.94	20.86	19.54
SP AT 30 x FORWARD PE	688	946	1223	1500
PEG RATIO AT 30 x EARNINGS	0.35	0.80	1.03	1.22
SP AT 40 x FORWARD PE	918	1262	1630	2000
PEG RATIO AT 40 x EARNINGS	0.46	1.01	1.37	1.63
FORWARD EARNINGS GROWTH	90.01%	35.09%	29.17%	22.70%

Currently at $8 ATM is trading at 34.8x forward earnings.

I am not certain the growth rate will be maintained high enough to keep the PE this high for too many years.

I find it helpful to plot a wide range either side of the historical average, but there is no rule of thumb.

[Beagle]

First four months sales were very strong and that's against a backdrop of them really struggling to secure enough stock. Synlait have just finished two major projects resulting in a doubling of their drying and canning capacity. I would say the outlook is very good indeed. EPS for FY18 could be as much as late 20's (cents per share).
They then get YOY capacity growth from having double the canning and drying capacity available all year in FY19, not half a year like this year. FY19 forecasts could be far too conservative or then again maybe not, who knows...but the company does appear to have serious momentum behind it...whereas some other companies in the NZX50 trading on similar multiples not so much.