ATM - A2 Milk Corporation Limited

[JeremyALD]

That sounds like confirmation bias JeremyALD, you can see plainly that the US techs are not valid comparisons, that ATM has run up on hype and sentiment, and punters have priced in perfection for lord know how many years ahead already. It's ripe for a serious wake-up call anytime sentiment chooses to rate it back to a sensible PE.

Be nimble, but ride the upside until it bleeds, then cut the losses when they happen. Believe the story but never ride the pony back down the hill. Which it seems will inevitably happen, sometime. Actively manage capital, don't look for reasons why 'staying in' is the right thing to do, that just promotes reasons not to get the heck out when it turns to custard.

Jmho fwiw
BAA

I agree that tech stocks are not the best comparison, however I, analysts and many others believe there is still value at the current share price - although I would not buy at this level until the next announcement.

ATM is well positioned, has huge growth potential in China, UK and USA, sound momentum, a track record of delivering, no debt and plenty of cash. Yes its not the bargain it once was but you'd be hard to find a stock on the ASX or NZX with stronger growth prospects.

What i was getting at with the example of US stocks is the market at this point in time is paying large premiums for growth companies and not many are growing as fast as ATM (now this may slow, but at the moment it looks like it's full steam ahead).

[Baa_Baa]

And currently trading at a Forward PE of 37-39x...

I would like to know what a sensible PE on ATM would be to you and what assumptions you have made to get there?

You're not hearing me, I'm not discussing FA, albeit in english - 37-39 YEARS of earnings to justify the share price (capital valuation of the company) seems reasonable to you. I don't care.

I'm riding upside momentum, enjoying dividends when there are some (not here) and cutting capital losses without any recourse to having to justify holding a stock that is well beyond fundamental reasons for holding, but at the same time punters love it and pushing up the share price.

So all good. I just won't be there when all the FA's are wondering why the market can't understand 30-40 time earnings isn't a good deal anymore.

[Kay]

That sounds like confirmation bias JeremyALD, you can see plainly that the US techs are not valid comparisons, that ATM has run up on hype and sentiment, and punters have priced in perfection for lord know how many years ahead already. It's ripe for a serious wake-up call anytime sentiment chooses to rate it back to a sensible PE.

Be nimble, but ride the upside until it bleeds, then cut the losses when they happen. Believe the story but never ride the pony back down the hill. Which it seems will inevitably happen, sometime. Actively manage capital, don't look for reasons why 'staying in' is the right thing to do, that just promotes reasons not to get the heck out when it turns to custard.

Jmho fwiw
BAA

I would argue that netflix and amazon are priced on hype and sentiment with god knows how many years of perfection priced in already too....and if I'm generalising I would say the same can be said for all major national indices.

Cant argue with your advice. I think its a bit too far into the cycle for long term investments. Its a long way down. Plenty of money to be made chasing the quick buck... And much more fun!

[Baa_Baa]

I would argue that netflix and amazon are priced on hype and sentiment with god knows how many years of perfection priced in already too....and if I'm generalising I would say the same can be said for all major national indices.

Cant argue with your advice. I think its a bit too far into the cycle for long term investments. Its a long way down. Plenty of money to be made chasing the quick buck... And much more fun!

Yes, but as companies they're not comparable in any respects except maybe the hype.

Active management of Stop loss orders, or 'limit sells' (in another language) are key to exits without having to worry about most of, if not all of, the chatter here whether it's valued correctly by the market, or not.

Just protect your capital position, imho.

BAA

[couta1]

The good thing about this stock is it has both a 5 star trader and investor rating, choose your poison or mix it up ,if you feel so inclined.

[Sideshow Bob]

Just 27 days & 10 hours (approx) to wait for the next update.....

Perhaps it is the end of its lifecycle. That's a great Tui........

[Beagle]

My 2 cents is that to understand this company in terms of its valuation one needs to look at FY19 forecast figures. Synlait have only just doubled canning and drying capacity so there is a chance in the short term there might be enough supply to meet rampant demand before Synlait have to ramp up production again in due course.
Here's some comparative PE's from other growth companies on the NZX, all growing considerably slower than ATM, all PE's off 4 Traders average of analysts FY19 forecasts
ATM 28
POT 36
AIA 29
FPH 35

I think those numbers speak for themselves but its well worth noting ATM have a very good history or upgrading their forecasts.

It won 't surprise me in the years ahead if demand growth continues to make it near impossible to keep a reliable supply. I can see the possibility of a 1:1 scrip based takeover of Synlait coming at some stage so ATM can control the supply chain in the manner it needs too.

[hardt]

You're not hearing me, I'm not discussing FA, albeit in english - 37-39 YEARS of earnings to justify the share price (capital valuation of the company) seems reasonable to you. I don't care.

I'm riding upside momentum, enjoying dividends when there are some (not here) and cutting capital losses without any recourse to having to justify holding a stock that is well beyond fundamental reasons for holding, but at the same time punters love it and pushing up the share price.

So all good. I just won't be there when all the FA's are wondering why the market can't understand 30-40 time earnings isn't a good deal anymore.

I hear you.

Valuations have an across the board relevance to the current economic climate and sentiment surrounding certain industries...

When the multiples retract there will be a fundamental reason for it and the industry/market would likely be moving the same way using FA... TA's are never the first movers.

Whittling it down to being either an unintuitive FA or a brilliantly minded trader is a little bit ~

[couta1]

A lot of shorters would have been incinerated over the last few days, this things on fire.

[minimoke]

A lot of shorters would have been incinerated over the last few days, this things on fire.

Patiently waiting for Mr Market to apply the same blow torch to SML