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  1. #1001
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    Quote Originally Posted by black knat View Post
    This from the Dietitians Association of Australia I think sums it up pretty well;
    A2 milk has been available on the Australian market since March 2003. To date, there is no solid scientific evidence demonstrating that A2 milk is better for you than regular milk. As there is no food safety issue with either type of milk people are encouraged to keep drinking either A1 or A2 milk as a nutritious food.

    http://daa.asn.au/for-the-public/sma...n-a-z/a2-milk/

    I think there is a significant risk that the claims of supposed health benefits will come unstuck at some point.
    I’ve always looked at it this way Black Knat.

    There will be ongoing debate for a few years yet, if not decades, and not all health professionals will agree, some for, some against, but the more debate that is had, the more awareness that is created, and the more sales will result as folk give it a try for themselves.

    It's not ATM's goal to be a mainstream fresh milk supplier, as was clarified during the last AGM, they offer an innovative product into a niche market and can thus demand a price premium. The longevity of the debate provides for the longevity in price premium.

    Having said that there has been quite a lot of research performed since 2003, and there are now over a 100 scientific reports in support. The trend amongst professionals seems to be increasingly supportive as time goes by also.

    http://www.betacasein.org/index.php
    http://www.a2milk.co.uk/healthcareprofessionals/

    That recent report on the rat tests is quite interesting and compelling;

    http://keithwoodford.wordpress.com/2...une-reactions/

  2. #1002
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    Quote Originally Posted by nextbigthing View Post
    So is there anybody out there who thinks ATM isn't a great long term investment and why? What do you see as the big risks to ATM?

    Snoopy I know you have previously said it's well overpriced given the current earnings (PE). However I would argue if you look at how well they've done in Australia, how much profit they could be posting and the size of the market left to penetrate (amongst other factors) then a high PE based on current earnings is justifiable.

    Thanks in advance. NBT
    NBT, we know that the Australian supermarket duopoly is globally one of the most difficult to get shelf space in. The fact that A2 milk from little ol' New Zealand has done it is a major marketing coup. I don't know anyone who would not respect ATM for what they have achieved in Australia. I think the mistake some make is to assume it will be just be a cakewalk rolling out A2 to the rest of the world, using the logic that if you can expand into Australia you must be 'tough enough' to succeed everywhere else.

    I have spent a bit of time visiting the UK over the last few years. Over there the supermarket pie is divided up rather differently. You have Asda, Tesco, Sainsburys, The Co-operative Group, Morrison's and Waitrose for starters. Then there are other second tier chains: Iceland , Aldi. I could go on but you get the picture.

    My feeling is that getting a foothold in one Australian chain was the difficult bit. When Coles gets something that sells, then Woolies has to have it and vica versa. However, getting your item into one major UK chain may not mean others are compelled to follow. There is a big difference when your first customer sales chain penetration opens 40% of the market, as opposed to maybe 6%. Thus my feeling is that A2 penetration into other new markets is likely to be slower than what happened in Australia.

    Following this logic track, I would suggest new market development expenses are likely to be higher than the market generally assumes and profitability lower than expected. It seems to be inescapable that ATM will require more capital to make a go of their global roll out. The evidence is last time this happened those putting in new capital demanded a steep discount to market price (shares trading in the 70s new shares issued at 50c IIRC).

    So while I have respect for the A2 story as a global marketing exercise, I have less respect for A2 value putting my investors hat on. On any fundamental measure those shares which sophisticated investors subscribed to at 50c were by no means cheap (PE north of 50). There was still a lot of blue sky built into the A2 story if you were stumping up 50c a share. But obviously those sophisticated investors thought it was much more than a punt given they were prepared to pay so high an earnings multiple. I guess judging what you are prepared to pay for future cashflows will determine where you see the value of ATM settling. From where I sit I can see a high certainty of negative cashflow coming up and a rather less certain picture of positive cashflow way out sometime when. On balance I am sold on the product, although I do acknowledge some issues around the science. But I am not sold on putting in money at anything close to 70c to be part of today's projected cashflow plan.

    SNOOPY
    Last edited by Snoopy; 26-06-2014 at 04:30 PM.
    Watch out for the most persistent and dangerous version of Covid-19: B.S.24/7

  3. #1003
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    Quote Originally Posted by black knat View Post
    True, and if a2 milk had 2000 years of traditional Chinese medicine behind it I would be a lot more comfortable.

    Just to to back up the truck a little, in raising these issues I was responding to a request from NBT asking for downside views on this stock. As you can see NBT there is room for significant differences of view about the merits of the science behind a2. I would be careful for that reason.
    Yep, the more debate the better, health professionals, investors, and within the family.

    debate --> awareness --> sales.

  4. #1004
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    I don't suppose that Milford are too worried about picking the exact bottom.

  5. #1005
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    Quote Originally Posted by airedale View Post
    I don't suppose that Milford are too worried about picking the exact bottom.
    Exactly, they're thinking long term.

    Thanks for your suggestions BK and Snoopy, something to ponder.

  6. #1006
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    Quote Originally Posted by winner69 View Post
    The ATM chart had a DEATH CROSS on it the other day (50ma / 200ma), usually not a good sign and price action since supports this view.

    Just thought you punters might be interested

    But some punters think death crosses are BULLISH so no worries
    So in your view Milford got it wrong Winner?

  7. #1007
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    Quote Originally Posted by nextbigthing View Post
    So in your view Milford got it wrong Winner?
    Didn't say that at all .....just pointing out that a Death Wish crossing on the chart. Means as we know only happens in downtrends but some punters say such events are bullish.

    Milford have to put their money somewhere. They obviously think that ATM is one of the better bets around so prepared to be overweight to some extent. Good on them in sticking to their convictions.

  8. #1008
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    Quote Originally Posted by moosie_900 View Post
    Think he's more on to MAC than Milfie. Milford cannot buy up all they want in one hit (obviously), so averaging down seems to be theeonly option. They must see ATM as currently undervalued in the long term to be hoovering them up as the MAs cross. We smaller traders need to have more patience as I doubt the bottom is anywhere but "in" yet and don't have unlimited funds!

    PS - Kerp an eye out for a propaganda piece from Gaynor pumping ATM (and I say that with all respect!!!)
    Prob right with that PS moosie .......successful fund management is all about marketing, not actually investing.

  9. #1009
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    Quote Originally Posted by winner69 View Post
    They obviously think that ATM is one of the better bets around so prepared to be overweight to some extent. Good on them in sticking to their convictions.
    You don't sound convinced that it's the right move though!?

  10. #1010
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    Of course this all assumes Milford has not had a sudden change of heart since last disclosure and is now the big Seller..

    Runs for cover

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