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  1. #5681
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    Its a curious one. BAL is obviously in the brown stuff that comes out of a cow's backside, and just come out of a trading halt - seemingly then the catalyst for ATM to increase yesterday by 15c or around 6-7%, with another 7c today thus far. BAL have been in a trading halt for near a month, and come out with revised forecasts and sales - but saying their online market share is stable and up on January 2016. But more stocks being held in market.

    They have almost 50% of their forecast turnover as stock (not good for Fonterra?) with a change to their 'take-or-pay' contract and also some additional rights put in.

    They see their GM going from 39-40% 1H 17 to 32-34% 2H 17, EBIT being around $22-26m FY, after $12-14m 1H17, and EBIT going from 6-9% 1H 17 to 4-6% 2H 17. Only have $1m in cash but compliant with all banking covenants. But conditions obviously worsening later in the year.

    They've gone from sales of $25m in 2014 to $125m in 2015 to $245m in 2016. They got some speed wobbles on and haven't got the right route to market.

    So what am I missing? Why is this the shot in the arm for the A2 price list and add $160m to their market cap? The announcement from ATM reconfirming their recent AGM guidance gave the share price a lift, but was short-lived - which would have thought that more meaningful than an update by BAL and coming out of a trading halt.

  2. #5682
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    Quote Originally Posted by NZSilver View Post
    Nice little rise yesterday arvo, I think $3 is a bit rich at current rev/profits, but $2.50-2.80 depending on results.
    Agree.......

  3. #5683
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    Quote Originally Posted by Sideshow Bob View Post
    So what am I missing? Why is this the shot in the arm for the A2 price list and add $160m to their market cap? The announcement from ATM reconfirming their recent AGM guidance gave the share price a lift, but was short-lived - which would have thought that more meaningful than an update by BAL and coming out of a trading halt.
    Essentially it is a shot in the arm for ATM because ATM was incorrectly assumed by the market to be tarnished by the same problems that have seen BAL's SP decline from $12.00 to around $4.50.

    Both ATM and BAL have now released info' that indicates the market over-reacted re ATM. Essentially BAL's problems (demand drop in China, poor stock control and poor purchase contracts) are not effecting ATM.

    Thus in the light of the info' released this week, ATM's SP could be expected to return to it's pre BAL scare highs around $2.60 however IMO further ATM updates are needed to cement any upside.

    DYOR
    Last edited by Leftfield; 12-01-2017 at 01:32 PM.

  4. #5684
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    Quote Originally Posted by Left field View Post
    Essentially it is a shot in the arm for ATM because ATM was incorrectly assumed by the market to be tarnished by the same problems that have seen BAL's SP decline from $12.00 to around $4.50.

    Both ATM and BAL have now released info' that indicates the market over-reacted re ATM. Essentially BAL's problems (demand drop in China, poor stock control and poor purchase contracts) are not effecting ATM.

    Thus in the light of the info' released this week, ATM's SP could be expected to return to it's pre BAL scare highs around $2.60 however IMO further ATM updates are needed to cement any upside.

    DYOR
    Agree LF that both are tarred with the same brush, but there was little/nothing to give confidence to the ATM share price from BAL's announcement or resumption of trading. The update/reconfirmation pre-Xmas from ATM was more pertinent than BAL this. Sure there was an over-reaction, but exactly as you say - BAL's problems are not effecting ATM - and the only thing there is market demand - not stock control, purchasing etc.

    I see was trading at $2.35 this morning but dropped back to $2.25 after Australia opened.

  5. #5685
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    Nice little gain today, possibly as a result of another substantial investor taking up a stake.

    Substantial product holder(s) giving disclosure
    Full name(s): Colonial First State Asset Management (Australia) Limited
    Summary of substantial holding
    Class of quoted voting products: Ordinary Shares
    Summary for Colonial First State Asset Management (Australia) LimitedFor this disclosure,

    1. (a) total number held in class: 36,752,078
    2. (b) total in class: 725,620,065
    3. (c) total percentage held in class: 5.065%

  6. #5686
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    Quote Originally Posted by Left field View Post
    Nice little gain today, possibly as a result of another substantial investor taking up a stake.

    Substantial product holder(s) giving disclosure
    Full name(s): Colonial First State Asset Management (Australia) Limited
    Summary of substantial holding
    Class of quoted voting products: Ordinary Shares
    Summary for Colonial First State Asset Management (Australia) LimitedFor this disclosure,

    1. (a) total number held in class: 36,752,078
    2. (b) total in class: 725,620,065
    3. (c) total percentage held in class: 5.065%
    Maybe, or is it following Bal which is also up today for the first time in a while.

  7. #5687
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    Quote Originally Posted by couta1 View Post
    Maybe, or is it following Bal which is also up today for the first time in a while.
    Its just heading back to ASM trading range of 250s (after being hammered by unrelated and unfortunate Bal's events)...very strong buying support at the moment heading into HY results to be released next month. And am sure they'll be an update around new product launches around that time like Adult nutrition etc.

  8. #5688
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    Quote Originally Posted by Snoopy

    Last paragraph of long post early last year


    Overall though, it looks like at north of $2, the share price has got way ahead of the underlying business. I re-iterate my warning to shareholders. Fundamentally ATM is severely overvalued, and still has the potential to halve in price overnight.

    SNOOPY
    Posted 17 Feb last year when share price was $2.10

    Snoops - are you impressed as to how ATM have grown and their current levels of profitability?

    You did say in several posts that there are lessons to be learnt. From your analysis of ATM over the last couple of years and subsequent events any learnings you could share with us?
    Last edited by winner69; 18-01-2017 at 07:35 AM.
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  9. #5689
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    Quote Originally Posted by winner69 View Post
    Posted 17 Feb last year when share price was $2.10

    Snoops - are you impressed as to how ATM have grown and their current levels of profitability?

    You did say in several posts that there are lessons to be learnt. From your analysis of ATM over the last couple of years and subsequent events any learnings you could share with us?
    The strengths of ATM as I see it are:

    1/ Their ability to enter the Oz supermakrket duoopoly and successfully market a premium product in a wider market atmosphere of milk discounting.
    2/ Their ability to take a significant dollar stake in the premium Chinese infant formula market.

    Latterly I am not sure from an investment perspective whether 1/ and 2/ really are different markets, and whether the success of 1/ has been greatly boosted by Chinese travellers and former Chinese natrionals living in Australia sending A2 formula back to their homeland, and hence boosting 'Australian' sales. The rest of the business is apparently 'going to plan'. But do the UK or the USA make any money once head office costs are apportioned? There are obvious currency headwinds too that will reduce NZD returns from those markets (although if A2 are losing money in those markets, ironically I guess a high NZ currency is good!)

    ATM shareprice gains seem largely on hype and anticipation. I can see every success for ATM going forwards from a business operational perspective. But with the company already valued by the market so highly, I see little prospect of any investment returns for the forseeable future. The fact that so far A2 looks to be a 'one trick Chinese pony', albeit a pony that 'looks good' and is 'very well trained', introduces a market concentration risk factor that I am not comfortable with. I intend to keep following the company, but for me the investment equation does not add up.

    SNOOPY
    Last edited by Snoopy; 18-01-2017 at 09:34 AM.
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  10. #5690
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    The Elevator has started.

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