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  1. #13731
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    Quote Originally Posted by Balance View Post
    Another day of huge volume - 15.2m shares on ASX.

    Add the 19.75m done on Wednesday, and the 7.7m yesterday = 42.65m shares.

    Compare that to the 47.47m number of shares shorted at the beginning of the week.

    Share has gone down on huge volume - what does it mean?



    https://www.shortman.com.au/stock?q=a2m
    Bargains. Both bourse found support at their 200DMA’s closing nicely above. Sure has been quite the week.

    Did you buy back your 2/3rds?

  2. #13732
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    Quote Originally Posted by Baa_Baa View Post
    Bargains. Both bourse found support at their 200DMA’s closing nicely above. Sure has been quite the week.

    Did you buy back your 2/3rds?
    No.

    Planning to keep at the 1/3rd level for the rest of the year - leave the big boys to play their game.

    I have a hunch that most of the volume done this week is short-covering.

    Means the sp has been held up as the shorters covered - which could mean a lower sp next week. Just as the sp was held down when the shorters were building up their position.

    This time they seem to have got it right - in the short term.

  3. #13733
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    When it comes to IF, milk powder is superior as it contains all amino acids and cofactors.

    Soy, almond, other non dairy milks have huge environmental issues, you just aren't aware of them as it is occuring overseas.

    NZ is very efficient at producing dairy as pasture based and there is growing demand. 95% carbon is used I production vs 5% transport to consumer, so much more environmentally friendly to produce in soil,climate,geography where the overall carbon to produce it will be less (NZ) cf somewhere else (say the farms they have in Saudi, europe, US). Farmers are improving environmental practices, and the bar is rising quickly, just a few useless buggers letting the team down. Many environmental improvements on farm are also improve farm economics.

    A2 is doing just fine, just look at what the P&L and balance sheet are saying. Very good value at these levels, possible takeover target.
    Last edited by NZSilver; 23-08-2019 at 07:07 PM.

  4. #13734
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    Quote Originally Posted by Balance View Post
    No.

    Planning to keep at the 1/3rd level for the rest of the year - leave the big boys to play their game.

    I have a hunch that most of the volume done this week is short-covering.

    Means the sp has been held up as the shorters covered - which could mean a lower sp next week. Just as the sp was held down when the shorters were building up their position.

    This time they seem to have got it right - in the short term.
    My core holding is a decent way ahead of this latest rout, so not really concerned about it considering the future upside.

    The 200DMA bounce today presented a too tempting opportunity to accumulate a few more, which at days end are up a few clicks as well.

    You could be right, the volume was huge. I’ll happily flick today’s parcel if it comes under pressure, but equally happy to hold the core for the long term.

    A challenging week, testing our strategies.

  5. #13735
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    Quote Originally Posted by Baa_Baa View Post
    My core holding is a decent way ahead of this latest rout, so not really concerned about it considering the future upside.

    The 200DMA bounce today presented a too tempting opportunity to accumulate a few more, which at days end are up a few clicks as well.

    You could be right, the volume was huge. I’ll happily flick today’s parcel if it comes under pressure, but equally happy to hold the core for the long term.

    A challenging week, testing our strategies.
    Challenging is probably understating the week - from the anticipation of the results to the reality of the sp getting slammed down on what was really only a slight miss against expectations.

    But to put the sp today in perspective, it is still 31% up YTD. So it is not nearly as bad as the week’s fall suggests.

    So to me, the market still loves ATM - truly one of the great NZ success stories which other NZ companies must learn from.

    The issue which will be taxing our grey matters for a little while yet is how successful ATM’s will be with its revised strategy in China and its US business. And what is a fair price to pay for ATM?

    As Warren Buffett advises : "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.“

    And ATM is a wonderful company!

  6. #13736
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    Gross margins greatly improved in F19 v F18

    Lower input costs per unit (milk) had a positive impact of $50m plus

    Was milk cheaper this year or did suppliers get screwed good and proper.
    Last edited by winner69; 24-08-2019 at 10:12 AM.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #13737
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    Obviously the best people for the best jobs at A2 are females

    Number of directors / senior execs up by 5 from 20 to 25

    The extra 5 are all female

    Good to see.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  8. #13738
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    Quote Originally Posted by winner69 View Post
    Gross margins greatly improved in F19 v F18

    Lower input costs per unit had a positive impact of $50m plus

    Was milk cheaper this year or did suppliers get screwed good and proper.
    Real value add in action - compare & contrast with the nincompoops in Goonterra.

    Why ATM will progressively eclipse Goonterra as the face of dairying in NZ.

  9. #13739
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    Quote Originally Posted by winner69 View Post
    Obviously the best people for the best jobs at A2 are females

    Number of directors / senior execs up by 5 from 20 to 25

    The extra 5 are all female

    Good to see.
    Or is Jayne just engaging in her own form of confirmation bias and loading a whole of extra cost and overhead on the company ?
    Whatever one's view it seems most of the analysts have now considerably adjusted their expectations for the next 3 years https://www.marketscreener.com/A2-MI...22/financials/

    I see the average view, (which quite closely aligns with mine expressed earlier this week in post #13668) is that eps will grow just 15% in FY20. That's got to be "an ouch" considering past growth rates ! More concerning is that average forecast eps growth over the next three years is just 19% per annum, which is obviously dramatically different to when Geoffrey Babbage was in charge.

    Forward PE in the low 30's was fine when the company was growing much, much faster. Not intended as advice but one of my key filters to identify possible value accretion to my balance sheet is to look for stocks on a forward PEG ratio (Price earnings to growth rate) of less than 1. This was definitely a standout in previous years but not any more, currently 31.5 / 15, more than 2 !...which suggests to me the company is very poor value at this point even after the big correction.

    Even reverting to my other valuation filter of no growth PE of 8.5 (even being kind and adjusting this no growth benchmark to 11 for the current ultra low interest rates) + 1G where G is the average growth over the foreseeable future (19) I get a forward PE of no more than 30. This suggests fair value 12 months hence from here to me is 30 x 45 = $13.50 and current value discounted by this year's expected growth rate of 15% is no more than $11.50. Ouch ! I know that won't fit with anyone else's view on the stock but I am quite happy to stick to my own valuation methodology that's worked for me.

    I think its unlikely to fall to $11.50 in the short term, (but you never know). More likely is another 12-18 months of more sideways action, just like we have seen since Feb 2018, with wild swings around the mean average of about $14.

    This has been a fantastic stock under Geoffrey Babbage's leadership. I am not impressed at all with the direction Jayne Herdlicka is taking. Of course she would say the easy growth gains have already been achieved and start spending like a drunken sailor on shore leave. That's what under achievers and over spenders always say to defend their position.

    It should be quite obvious looking at the past sales and eps growth rates and the forward ones for the next three years the game has changed. Some will likely say that Jayne is investing for the long run and that's fine and good luck with that. I just think at this point the shares are still about 20% more than fair value for the average long run expected growth rate.

    Disc: No position other than indirectly through Kingfish.
    Last edited by Beagle; 24-08-2019 at 01:38 PM.
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  10. #13740
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    Nice number crunching Beagle but I'll bet you a few dozen bottles of cider that the share price will revisit $18 by the end of 2020.

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