ATM - A2 Milk Corporation Limited

[hardt]

Harry Markowitz has a lot to answer for..eh ..

To be fair to Harry the key word in the Portfolio Theory is "allocate"..which suggests at commencement (or accumulate/sell during.. thus altering the portfolio metrics)...It's all the do with the level of risk you as an investor is happy to put up with and then mathematically find the maximised capital gain to that level of risk you assigned yourself to (usually the higher the level risk requires a higher level of return (maximised = most efficient way).. It says nothing about derisking during a huge capital gain event unless there's a sudden risk increase..It would make no sense would it as it would be contrary the Theory's principle of maximising capital gain..also derisking (selling) your lowest risk asset (best performer of making a capital gain) is contrary to the principle as it could dramatically lessen the portfolio maximising power of making a capital gain and also push the risk to the outside of your assigned risk perimeter resulting in a much less efficient portfolio..

I amazes me the investors (including myself sometimes) realising their profits (profit-taking) on their best performing stock and keep their dogs (badly performing stock) in the hope that some day they may get their money back. That is the exact opposite to the Principle..(Very inefficient portfolio = high outside assigned risk perimeter with minimising capital gain)

It is a complicated mathematical method that has to be recalculated very often as they are all variables... but there are simplistic methods for us plebs..There's a rule of thumb "buy/accumulate in up trending stock" ..and... "sell/don't buy downtrending stock" (high risk to capital gain).
Holding onto a downtrending stock can alter the risk/maximum capital gain metrics within one's Portfolio to the point that the resulting higher percentage risk becomes outside your established risk perimeter thereby creating a sell of the offending culprit to lower the risk back into the established perimeter thereby raising back up the efficiency of the portfolio (risk/maximised capital gain)..

Conclusion:..you should not have sold...

Effectively, 90% of my net worth is in the markets... this year has been good to me and my net worth has doubled with that 50% in ATM the funds taken were used for my US holdings.

[moka]

I see they are doing another investor preso in Hong Kong today and tomorrow following on from they had in London last week.

Must be all those international investors pouring onto this one....

Yes 5 international trades this morning before open for $2,395,738

[see weed]

Bit of a sting in it's tail? Maybe under $6 today?

[misterx]

Any news? What's with the drops lately

[Ggcc]

Profit taking and apparently rebalancing by institutions

[kizame]

Any news? What's with the drops lately

It's had a big run,so taking a breather is normal,and yep even I took profits today,this is a wonderful stock,but it needs a bit of a rest.

[sb9]

Synlalit FY results for year ending 31 Jul 2017 released tomorrow.

Key things to look for me around increase in current production capacity and of more important is update on recently acquired plant in Auckland.
And with bit of luck, hopefully the CFDA approval comes through tomorrow as well.

[Leftfield]

SML's results out now.

Impressive results. As yet no CFDA approval. Plenty of good news for ATM including no mention of any issues with the new Auckland and Dunsandel plants, and exciting hints at new products to come;

"Synlait (NZX: SML; ASX: SM1) has reported their strongest performance yet with a net profit after tax of $38.2 million, double digit growth in profit margins and revenue increasing 39% to $759 million......

.....Underpinning the expansion of Synlait’s infant formula business is the acquisition of a second site in Auckland to double blending and consumer packaging capacity and a substantial investment to double the capacity of their wetmix kitchens in Dunsandel.

“Alongside our preparation for another phase of rapid growth, we’ve achieved a solid increase in profit and balance sheet strength in FY17. We intend to increase margins and operational efficiency, as well as canned infant formula volumes in FY18 to 30,000 MT – 35,000 MT, as a result of our preparation in FY17.”
“We expect to announce further plans in due course. These plans will allow us to keep up with medium to long term infant formula demand, as well as signal new high-returning product categories we intend to move into in the coming years.”

ATM well placed with its shareholding in SML looking v good.

[sb9]

Here are key takeaways for me from Synlait's report:

* Demand for higher margin products continued to rise, with finished infant formula volumes growing 17% to 18,776 MT and margins before tax increasing by $10 million.

* Underpinning the expansion of Synlait’s infant formula business is the acquisition of a second site in Auckland to double blending and consumer packaging capacity and a substantial investment to double the capacity of their wetmix kitchens in Dunsandel.

* “Investing in Synlait Auckland and our wetmix facility at Synlait Dunsandel will relieve any capacity constraints for the second half of FY18.” said Mr Penno.

* Alongside our preparation for another phase of rapid growth, we’ve achieved a solid increase in profit and balance sheet strength in FY17. We intend to increase margins and operational efficiency, as well as canned infant formula volumes in FY18 to 30,000 MT – 35,000 MT, as a result of our preparation in FY17.”

That should do wonders, nuff said.

[Snoopy]

* Demand for higher margin products continued to rise, with finished infant formula volumes growing 17% to 18,776 MT and margins before tax increasing by $10 million.

<snip>

That should do wonders, nuff said.

You left out the key questions. Synlait produces infant formula for other customers , not just A2. The real questions are:

1/ How much of Synlait's increased infant formula production capacity is contractually available to A2 Milk Ltd?
2/ How much increased raw A2 milk supply will be available to process? If the raw product is not available, it doesn't matter what the increased capacity of the processor is.

SNOOPY