ATM - A2 Milk Corporation Limited

[Leftfield]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

[winner69]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

Betcha no science in those valuations ...just a gut feel methinks

[couta1]

Betcha no science in those valuations ...just a gut feel methinks

Leave the Science to the Scientists, the Gutometer is your best valuation tool.

[Beagle]

Exciting old day....like Beagle I had to go for a few walks!

Broker upgrades as reported on Hot Copper (DYOR)

Bell Potter - $13.40
Goldman Sachs - $12.90
Macquarie - $13.00
Citi Bank - $14.00
Deutsche Bank - $14.00

Thanks mate, please note folks those are $A valuations, here's McQuarie's research note http://www.macquarie.com.au/dafiles/...A2M220218e.pdf
Behind the paywall article on NBR today. Very brief synopsis:-
1. Average analyst targets raised 30% - about a third of this is due to the Fonterra deal, the rest fatter margins and sales growth exceeding expectations.
2. Knocking on the door of inclusion in the ASX top 50 index
3. Fonterra has effectively capitulated
4. Masterstroke by Geoff Babidge and demonstrated beyond any doubt that the I.P. behind A2 milk is real.

18 January 2018 behind the paywall article
The company admits it still struggles to get ahead of demand for its A2 Platinum infant formula. This despite Synliat doubling drying and canning capacity in November 2017.

One can but wonder how exceptionally strong demand for this product is now that its one of the few accredited suppliers into China ?

My thoughts on EPS for the second half.
1. Net profit after tax for the first four months of the year as announced late in 2017 was $52.3m.
2. Net profit just announced inclusive of November and December 2017, (note company was heavily supply constrained for much of Nov) was $98.5m therefore net profit for Nov and December combined was (98.5m - 52.3m) = $46.2m or $23.1m per month.
Assume supply constrained month of November was conservatively 15% below December when production and delivery from new Synliat's plants was in full swing suggests profit on approx. $21m in Nov and $25m in December.

Add a conservative 10% per month to that $25m per month on average for the six months to June this suggests monthly earnings on average of about $27.5m for the next six months = $165m, less extra spend on marketing in northern hemisphere in 2H to drive long term growth suggests net profit about $140m in the second half. This suggests an annual EPS of 13.7 cps for the first half and about 20 cps for the second half a total of 33.7 cps.

Above includes a lot of my own estimates and thoughts and my EPS estimate is ahead of Mcquaries which at 27.9 cps Aust = approx. 30 cps
As always DYOR.

[Leftfield]

Thanks mate, can you please note which if these is $A and which is $N.Z, (if any).

The only one I'm reasonably confident of is the Deutsche Bank at $NZ14 hence the 'DYOR' and as I'm out celebrating tonight, I won't be doing any more research for awhile!

Cheers all.

[minimoke]

Well,what a wild couple of days that has been. I'm a firm believer in locking in some profits - or at least making the most of an increase in personal assets. So no guessing what I've been up to tonight.

But how hard was it. There I was looking at $14. What do I do. Lock in profits or let profits run, or buy more or sell or what too many decisions and teh market moving way too fast.

So I had to take a step back and deliberately think that I am not a trader. I am no good at picking highs or lows. And I made the original buy decision with a five year window in mind. So I'm sitting here enjoying the last of my evening. not ruing the lost profits I didn't lock in and not worried about the market tomorrow. I know its going to drop
but the long term prospects are looking too good to be a worry.

[iceman]

Well,what a wild couple of days that has been. I'm a firm believer in locking in some profits - or at least making the most of an increase in personal assets. So no guessing what I've been up to tonight.

But how hard was it. There I was looking at $14. What do I do. Lock in profits or let profits run, or buy more or sell or what too many decisions and teh market moving way too fast.

So I had to take a step back and deliberately think that I am not a trader. I am no good at picking highs or lows. And I made the original buy decision with a five year window in mind. So I'm sitting here enjoying the last of my evening. not ruing the lost profits I didn't lock in and not worried about the market tomorrow. I know its going to drop
but the long term prospects are looking too good to be a worry.

I think taking a "step back" is a good idea mm. I got into A2M in December 2012 and another lot Feb 2013 for combined 100k shares at an average price of 51c. It was a rocky ride for 3-4 years with wild swings and years between 30 something cents and $1, including a takeover offer for 60c or 65c if I remember correctly.
At the time, not many had much faith in the company or its product. Snoopy kept telling us we were stupid as his calculations showed a PE of 36,000,000 at one stage, while some of us happily bought. He upadted his PE calculation a year later and it had dropped to 36,000 which he thought was an improvement :-)

Then she took off. After the stress of wild swings and continuous questioning of whether ATM (changed theticker by then) was the real thing or just fake science as many claimed, yours truly caved in eventually when SP started taking off and sold all at an average price of about $3.50 from memory. Was very happy with that return from 51c. But see where its gone today.
My lesson. By all means lock in some profit to make you feel good but never sell all your shares in a company that you still have belief in. This of course is not a recommendation but just a little story for you to think about, based on your above post.
Well done all holders of this great company.

[Raz]

Nice post Iceman.

[dobby41]

My lesson. By all means lock in some profit to make you feel good but never sell all your shares in a company that you still have belief in.

And a simple way is to sell enough to pay back the initial investment then the rest is free money - no worries.

[Leftfield]

Found this ABC news report interesting...... ABC News