ATM - A2 Milk Corporation Limited

[Biscuit]

No need to trade.

Plenty of gains to be made by investing in good quality companies, turnaround stocks, avoiding duds and getting out of stocks (already in one’s portfolio) when their fortunes change, especially due to mismanagement.

Totally agree with that, look to the long term, and anyway I am a crap trader. Maybe I need to do some more after school classes, but I'm not convinced ATM's fortunes have changed. I don't buy the "new competition" argument - good brands don't care about cheap competitors. A2 are a good brand - apart from the fact they have proved their ability to work the brand, their brand is the product. That's a pretty nifty first-mover advantage.

[Balance]

Totally agree with that, look to the long term, and anyway I am a crap trader. Maybe I need to do some more after school classes, but I'm not convinced ATM's fortunes have changed. I don't buy the "new competition" argument - good brands don't care about cheap competitors. A2 are a good brand - apart from the fact they have proved their ability to work the brand, their brand is the product. That's a pretty nifty first-mover advantage.

Did my usual on the ground check of the IF shelves while I was shopping at our local Pak n Save this morning.

They had no Karicare A2 IF on the shelves, just ‘out of stock’ sign so I asked at the counter out of interest when stock would be available.

Lady at the counter checked in her computer and said they expect supply in about a week but there’s limited stock available at another branch (Royal Oak).

As far as I am aware, there’s always been ATM A2 IF available at Countdown, New World and Chemist Warehouse whenever I looked.

ATM - $44
Karicare - $31.99

Signs of the times that parents are catching onto the fact that one of the most established and trusted IF brands has A2 at 37.5% cheaper?

[Beagle]

Totally agree with that, look to the long term, and anyway I am a crap trader. Maybe I need to do some more after school classes, but I'm not convinced ATM's fortunes have changed. I don't buy the "new competition" argument - good brands don't care about cheap competitors. A2 are a good brand - apart from the fact they have proved their ability to work the brand, their brand is the product. That's a pretty nifty first-mover advantage.

You can't get entry to the exclusive "B" team with that post mate. I don't "buy" the zealots so called "unique" product call. Fact is mothers with babies haven't been able to get their hands on a reliable supply of A2 milk powder through daigou channels. They can't stop feeding their babies so they have found another brand from the widespread proliferation of other brands out there and FAR more likely than not they have found that baby does just as well on brand X than it does on brand ATM and seeing as they can get brand X with reliability and regularity and at a FAR more reasonable price, then guess which brand they will stick with ?

Besides that the CCP are really starting to put it out there, extolling the virtues of buy Chinese made and many will do exactly what their leadership tells them too.
I'm calling it first, this is no longer a growth company and ATM will have to expend vast amounts on marketing just to try and defend their market share.

[Snoopy]

A2 sitting on a $133m paper loss with their Synlait shares at the moment (that's what they are down from June 2020)

No one can look back and say there weren't more than a few avalanche warnings on the ATM cash mountain?

SNOOPY

[Ruby]

You can't get entry to the exclusive "B" team with that post mate. I don't "buy" the zealots so called "unique" product call. Fact is mothers with babies haven't been able to get their hands on a reliable supply of A2 milk powder through daigou channels. They can't stop feeding their babies so they have found another brand from the widespread proliferation of other brands out there and FAR more likely than not they have found that baby does just as well on brand X than it does on brand ATM and seeing as they can get brand X with reliability and regularity and at a FAR more reasonable price, then guess which brand they will stick with ?

Besides that the CCP are really starting to put it out there, extolling the virtues of buy Chinese made and many will do exactly what their leadership tells them too.
I'm calling it first, this is no longer a growth company and ATM will have to expend vast amounts on marketing just to try and defend their market share.

Bear in mind A2M's deep connections with Chinese State owned enterprises such as China State Farm,China Animal Husbandry Group(via MVM) & China Bright Dairy (Synlait)
Mate,A2M is practically locals up there.
They now have Bessie Lee as their China based board member,who background & company are pretty impressive.She will have great insights into the best marketing for cut through in the Chinese market.

[JohnnyTheHorse]

I feel it is funny as a long time trader like you still couldn't adapt the trading stocks market. Regarding to upgrade or downgrade , it is ofcourse a certain things for traders to follow, but it is uncertainty also toward the same for stocks which you need to TRADE WITH THEIR MOMENTUM.
When there are enought informations for a certainty , you will have to buy at a cost of the next upgrade.

Hard to understand you most of the time, but am I right that you’re suggesting you’re following the momentum?

[JeremyALD]

I think this thread has become overly pessimistic about A2 if I'm honest.

A2 have been a disappointment in the last year or two, but maybe this is the wake up call they needed. They still have a significant amount of cash and a very strong brand, with healthy metrics continually reported. They can easily navigate uncertainty with their balance sheet, and have the ability to reposition their business if needed. They are in as good a position as any company facing significant headwinds.

They have undoubtedly had factors occur within and outside of their control since Covid, and I believe the latter will fade over time, and the former can be fixed in time. We will see more management changes soon I'm sure, with shareholders having more of a say over selection.

I still am of the view there is a bright future for a2. It might take a few years for them to sort it out and mature into a leading global company, and lessen their reliance on China.

In the meantime they are still very profitable. Let's remember that despite a shocking year they are still going to make a significant profit and $1.3b - $1.4b in revenue is nothing to scoff at.

[Biscuit]

Besides that the CCP are really starting to put it out there, extolling the virtues of buy Chinese made and many will do exactly what their leadership tells them too.
I'm calling it first, this is no longer a growth company and ATM will have to expend vast amounts on marketing just to try and defend their market share.

I think you are seriously degrading the "B-Team" brand there Mr B. What mother anywhere buys food for her baby based on communist party propaganda? They will pay big money for the brands they trust. Competition isn't irrelevant but it isn't the simplistic thing you guys are making it out to be.

[Biscuit]

Did my usual on the ground check of the IF shelves while I was shopping at our local Pak n Save this morning.

They had no Karicare A2 IF on the shelves, just ‘out of stock’ sign so I asked at the counter out of interest when stock would be available.

Lady at the counter checked in her computer and said they expect supply in about a week but there’s limited stock available at another branch (Royal Oak).

As far as I am aware, there’s always been ATM A2 IF available at Countdown, New World and Chemist Warehouse whenever I looked.

ATM - $44
Karicare - $31.99

Signs of the times that parents are catching onto the fact that one of the most established and trusted IF brands has A2 at 37.5% cheaper?

All that means is that Karicare should put up their prices. There is no other logical conclusion from your data, is there?

[Beagle]

Being a B team member means being able to smell the B.S. from a considerable distance. Management have been full of it for months, called from the B team and been consistently right.
Wait for the next downgrade and come back and tell me how Chinese mothers will pay big money for the brands they trust. In the meantime let me define the term "inextricably linked" for Synlait shareholders with this image of how Synlait and ATM have performed in the last 6 months ChartATSM.jpg

Chart keeps getting extrapolated in the same direction for the foreseeable future, for both.