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  1. #20461
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by Balance View Post
    That Craig's piece was courtesy of Entrep (thanks!) on 24 Feb, day before the results announcement.

    As telling a piece of research as you are ever going to get of the pending third downgrade when Craig's sources on the ground were telling them that things on the sales front were looking grim.

    Those who took heed of the research would have got out at $11.48 that day - and bought back 22% cheaper the next day, if they so choose.

    As for ATM's sp halving again - that's easy to see as the growth multiple the stock is still trading on of 30.6X F21 shrinks to 18X in the event of a fourth downgrade.
    Forward PE of 18 feels about right to me given the fundamental uncertainty regarding when or even if growth may resume again and at what far more modest rate ?
    My revised forecasted eps for FY21 currently stands at 31 cps based on latest forecast (but highly likely to be less when the fourth downgrade happens) so yeah, maybe 28 cents x 18 = ~ $5
    Last edited by Beagle; 28-02-2021 at 12:03 PM.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  2. #20462
    Legend Balance's Avatar
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    What did some brokers think of the A2 Milk share price?

    Quite a few of the brokers said that the result was disappointing and below their expectations.

    Broker Citi is particularly bearish about the infant milk company with an A2 Milk share price target of $7.15. The HY21 net profit of $120 million was 8% lower than what Citi was estimating it would be.

    Citi has decreased its profit expectations for FY21, FY22 and FY23 by between 25% to 30% with demand adding to numerous ongoing issues confronting the company. The main reason for Citi’s profit expectation decrease is due to a slower daigou recovery as well as lower margins because of higher levels of incentives to reactivate the channel.

    Other issues that Citi pointed to included higher production costs and adverse foreign currency movements, which is likely to affect margins. The broker thinks that margins are going to be hurt.

    Ord Minnett is another broker that has turned more negative on the infant formula business because of the various challenges and longer recovery.

    One broker does have a slightly more positive outlook for A2 Milk, though it fully acknowledges the difficulties. Morgans has a share price target for A2 Milk of $10.40. The broker thinks that A2 Milk can still deliver over the longer-term once channels can return to normal.

    Looking at Morgans’ estimate for FY22, the A2 Milk share price is valued at 27x FY22’s estimated earnings.

    At the current value, Ord Minnett thinks that A2 Milk shares are priced at 31x FY22’s estimated earnings.

  3. #20463
    ShareTrader Legend Beagle's Avatar
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    Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  4. #20464
    Legend Balance's Avatar
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    Quote Originally Posted by Beagle View Post
    Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?
    Excellent point, Beagle.

    I believe you have hit the nail on the head.

  5. #20465
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    In the interest of balance,do you see any upside?
    It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
    I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?

  6. #20466
    Speedy Az winner69's Avatar
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    Quote Originally Posted by Beagle View Post
    Just touching on the report that January 2021 IF sales are down 70% compared to the same month last year again for a second. Mothers aren't going to stop feeding their babies so they've obviously found other brand that they and their baby are quite happy with. Once mothers find their baby is just as happy on a much cheaper alternative brand won't they just stick with the alternative brand ?

    Maybe the mothers had plenty stored away in the pantry .....and thought they better use that up fast

    Wasn’t pantry stocking a term the industry used a while ago.
    “ At the top of every bubble, everyone is convinced it's not yet a bubble.”

  7. #20467
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    Quote Originally Posted by Ruby View Post
    In the interest of balance,do you see any upside?
    It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
    I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?
    Those are people who believe and love this stocks ATM but looking for a cheap cheap entry.

  8. #20468
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    Agreed,I think YOY comparisons of sales could be difficult to analyse as we enter the period of "covid panic' that set in around this time 12 months ago and even earlier for the Chinese market.
    As well,with the increase in MBS stores added,those mums may have bought their A2 from the shop down the road from them rather than daigou.

  9. #20469
    Legend Balance's Avatar
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    Quote Originally Posted by Ruby View Post
    In the interest of balance,do you see any upside?
    It does seem from the outside that yourself and balance focus on negatives only which does give the impression of downramping rather than just providing balanced insight.
    I am not having a go at you,but I am interested in the psychology that motivates people to post on these forums.HC just seems to be rampant with posters piling in on stocks they neither own or have sentiment on...and they are always negative.Why when things are good,do you not see posters saying positive comments about stocks they don't own?
    I have been very open about me keeping an eye on ATM as a turnaround story.

    Can’t see the turnaround yet and imo, sp has a long way to fall before it represents value.

    Meanwhile, whatever I read or glean information from, I post (both negative & positive) in the interest of keeping all informed.

    You have a problem with that?

    PS. Have a look at FBU in recent years - plenty of negative points around but nobody complained, and the reward of investing in a turnaround stock is there for all to see.
    Last edited by Balance; 01-03-2021 at 09:18 AM.

  10. #20470
    ShareTrader Legend Beagle's Avatar
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    Quote Originally Posted by winner69 View Post
    Maybe the mothers had plenty stored away in the pantry .....and thought they better use that up fast

    Wasn’t pantry stocking a term the industry used a while ago.
    It was certainly something people did around April / May last year but as we all know IF has a limited shelf life and I'm not sure many people would buy a whole year ahead.

    One further issue presents, in regard to the pantry stocking thing, mothers trust in availability of supply. If mothers can't trust that they can get continuity of supply of their chosen brand, then trust is broken and they will choose another brand that their baby is doing well with, that they can trust has continuity of supply. Once trust in continuity of supply is broken, and a consumer has chosen another brand they can trust and their baby is doing well on, I suggest that the vast majority of mothers will stick with the brand they can trust that they can get at a reasonable price.

    I think the whole extra freight cost issue and daigou problems will have far reaching consequences down the track and ATM may find rebuilding their sales growth much harder than they think.
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

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