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  1. #14596
    Legend Balance's Avatar
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    Quote Originally Posted by allfromacell View Post
    Also in terms of infant forumla, where most of this companies profits are currently made the average Chinese mother doesn't understand what A2 even means other than it's just a brand from Australia / NZ.
    Gee!

    And you are invested in ATM?

  2. #14597
    Turn and burn Maverick's Avatar
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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.

  3. #14598
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    Jan 2014
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    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).

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