ATM - A2 Milk Corporation Limited

[see weed]

Any takers there for 1.40? Looks tempting.

[sb9]

Loving it...just to refresh the numbers from last upgrade....

Revenue to be $300 to $315 Mln and EBITDA of $33 to $37 Mln from last upgrade...
Revenue to be $350 to $360 Mln and EBITDA of $52 to $54 Mln from today's upgrade!!!

And if you know them well enough they always under promise and over deliver. Based on this I wouldn't be surprised if the numbers are tab higher come actual results announcement time in August...

[777]

Remember they hit 2.61 in February. Sold mine at 2.52. Back in though.

[Leftfield]

Great news today for holders. Confirms ATM's potential as a diversified dairy company with a credible point of difference and well established in several key markets including Australia, UK and China. Whoopee!

[blackcap]

Great news today for holders. Confirms ATM's potential as a diversified dairy company with a credible point of difference and well established in several key markets including Australia, UK and China. Whoopee!

Going ballistic on the Hotcopper site. Interesting that there is much more discussion there (albeit of less substance) than on here. I think about 90 odd posts already this morning....
well done holders!

[Snoopy]

Great news today for holders. Confirms ATM's potential as a diversified dairy company with a credible point of difference and well established in several key markets including Australia, UK and China. Whoopee!

I agree with the 'credible point of difference', but disagree strongly with the rest of Left Fields post.

A2 is not diversified at all, and relies on a single product output: A2 milk. It is the least diversified company possible, as if A2 suddenly becomes 'bad science' then the whole company becomes worthless. Note that I am not suggesting that A2 actually will be found wanting. Only pointing out that if this happened, the 'all in one milk bucket strategy' -the opposite of diversification- means the company would collapse.

A2 is well established only in Australia, and the Australian performance looks like it is being propped up with sales of 'Australian A2 infant milk formula' to China.

The update was on A2 favourably navigating their way through the evolving import restrictions into China. But there was no mention made of the UK and USA. These are clearly a best still in the development phase or at worst in deep trouble.

IMO despite the progress, they have not nearly justified their share price to date and at any price starting with $1 remain grossly overvalued by any fundamental measure you care to name.

SNOOPY

[barleeni]

Market update advises anticipating having $50million cash in hand at end FY16. Any chance some of this will be dispersed as dividends? if they gave $30million back as a dividend that would be roughly 4c per share?

[blobbles]

Ooh, SNOOPY down on ATM again, time to top up? :-)

130% revenue growth this year on last. Currently selling $430m worth of product annualised. Most definitely cash flow positive, but unlikely to return dividends (and I don't think they should) as cash could be used for growth in the US/UK. A modest 20% increase in sales on what they are currently selling would make ATM a $560m revenue company, easily achievable in my books given the ramp up on their supply side and seemingly endless growth in China (plus any results from a massive marketing campaign). Could be $500m plus and $80-100m in earnings with those numbers, 12-15c EPS with more future growth. The science is looking more solid every year, the release of the upcoming large Chinese study should be a watershed moment as well.

Really don't mind holding long term, billion dollar company by end of the decade is my pick.

[Ginger_steps_]

Ooh, SNOOPY down on ATM again, time to top up? :-)

130% revenue growth this year on last. Currently selling $430m worth of product annualised. Most definitîely cash flow positive, but unlikely to return dividends (and I don't think they should) as cash could be used for growth in the US/UK. A modest 20% increase in sales on what they are currently selling would make ATM a $560m revenue company, easily achievable in my books given the ramp up on their supply side and seemingly endless growth in China (plus any results from a massive marketing campaign). Could be $500m plus and $80-100m in earnings with those numbers, 12-15c EPS with more future growth. The science is looking more solid every year, the release of the upcoming large Chinese study should be a watershed moment as well.

Really don't mind holding long term, billion dollar company by end of the decade is my pick.

It's already a billion dollar company. I assume you mean revenue however, and if it takes that long i will be bitterly disappointed!

[mfd]

A2 is not diversified at all, and relies on a single product output: A2 milk. It is the least diversified company possible, as if A2 suddenly becomes 'bad science' then the whole company becomes worthless. Note that I am not suggesting that A2 actually will be found wanting. Only pointing out that if this happened, the 'all in one milk bucket strategy' -the opposite of diversification- means the company would collapse.

I hate to say it, but even losing the science isn't necessarily the end these days. For example, homeopathy is a multi-billion industry despite having absolutely no credible evidence for it working.