ATM - A2 Milk Corporation Limited

[couta1]

Shorts feeling the BURN!

They never learn.Lol

[see weed]

Wow burn baby burn. A2 was 99.9% of my portfolio a little while back, now only about 50%.

[minimoke]

Wow burn baby burn. A2 was 99.9% of my portfolio a little while back, now only about 50%.

Wouldn't you be happier if it was still 99.9%?

[sb9]

Presentation to be given by The a2 Milk Company Limited in Sydney on 3 April 2019.

https://www.nzx.com/announcements/332870

[Beagle]

http://www.sharechat.co.nz/article/a...-in-fy2020html

Trading 12% above FCNZ's price target and margin pressure coming in FY20. ATM has been very good to me in the past but I am pleased to be out of this and Synlait. Be careful with these high PE zero dividend yield stocks folks. Good luck to holders and I sincerely mean that.

[Sideshow Bob]

Presentation to be given by The a2 Milk Company Limited in Sydney on 3 April 2019.

https://www.nzx.com/announcements/332870

Interesting pages 9 & 10. We are now half way through that 2nd HY, so they should have a good handle on it - ie sales momentum, marketing, forward orders, spend etc.

Some positives - strengthening China IF market share, US Growth, doubling down on Chinese marketing investment, revenue growth rate for 2HY broadly in line with 1HY

Some Negative - Lower % margins (albeit largely because of further investment), weaker AUD, global dairy prices going forward to increase the squeeze.

Overall, the story continues. Negative is largely short term and reinvestment in marketing and brand (which is fine as long as get bang for their buck), and the fluctuations with general dairy pricing and currency.

[Tiddlywinks]

http://www.sharechat.co.nz/article/a...-in-fy2020html

Trading 12% above FCNZ's price target and margin pressure coming in FY20. ATM has been very good to me in the past but I am pleased to be out of this and Synlait. Be careful with these high PE zero dividend yield stocks folks. Good luck to holders and I sincerely mean that.

Hi Beagle,
A quick look at ShareClarity suggests most NZX companies are trading above DCF valuation doesn't it? And margin pressure seems to be due to short term factors or factors that go up and down (e.g. x-rates and dairy prices). I'm also happy with marketing reinvestment - expected for growth in big markets like the US and China.

[Baa_Baa]

http://www.sharechat.co.nz/article/a...-in-fy2020html

Trading 12% above FCNZ's price target and margin pressure coming in FY20. ATM has been very good to me in the past but I am pleased to be out of this and Synlait. Be careful with these high PE zero dividend yield stocks folks. Good luck to holders and I sincerely mean that.

Having no dividend it probably doesn't fit your buyer profile anymore, but for some people the low $8.67 to recent high $15.00 is a 73% gain in capital since 12 Oct 2018. That presented terrific gains even for people who trade on conservative momentum signals.

[Leftfield]

Agree Baa Baa this is not a stock for dividend hounds.... in addition I would point out that Beagles fears of 'Margin pressure' may be over-done as;

1.) Almost every half year that I can remember since 2012, ATM has signalled increased marketing spending in the second half of each FY, and I think you will find this spending has been very expertly managed both to dampen increased profit expectations and to gain strategic progress without eroding margins too greatly.
2.) We shouldn't ignore further increased margins as Fonterra's IF comes on stream and is channeled to its "exclusive supply rights for IF and other products into new priority markets." (refer chart on page 6 and think USA, S Korea, Singapore, Japan etc.)

[Beagle]

Hi Beagle,
A quick look at ShareClarity suggests most NZX companies are trading above DCF valuation doesn't it? And margin pressure seems to be due to short term factors or factors that go up and down (e.g. x-rates and dairy prices). I'm also happy with marketing reinvestment - expected for growth in big markets like the US and China.

I wouldn't recommend paying any attention to what share clarity suggests is fair value.

Having no dividend it probably doesn't fit your buyer profile anymore, but for some people the low $8.67 to recent high $15.00 is a 73% gain in capital since 12 Oct 2018. That presented terrific gains even for people who trade on conservative momentum signals.

No it doesn't fit what I'm looking for now. One can choose convenient timeframes to show almost anything. For example and I noted this the other day when looking at last years spreadsheet, my holding in boring REIT ARG outperformed ATM from 31 March 2018 to 31 March 2019 and that does not include the dividends from ARG.
ATM has had a fantastic run over the last few years and I feel that a substaintial amount of future growth is already factored into the current share price.
I had a lot of respect for Mr Babbage and Mr Penno while they were CEO's of the business's and what they've done for shareholders over the years in ATM and SML but the new CEO's of these companies have set their own culture and "style" and I am most unimpressed.