ATM - A2 Milk Corporation Limited

[Balance]

To me it (the chart) looks like it might be coming to the end of a 3 month downswing, because the last wave is losing momentum and could be an ending diagonal.
IF SO ( a fairly big if) then we could see another short down turn (such as today) being some sort of exhaustion point, maybe a gap, followed by a sharp recovery.
Maybe?

Closed on ASX at $11.31 - just hanging on.

Let’s see what tomorrow brings.

I expect that the Citi-induced selling should be out of the way.

[Lewylewylewy]

My gutometer says that this isn't the bottom, but I believe it'll be fine as a long term hold. It's a good company, with plenty itd growth ahead. Sure the fruit isn't low hanging anymore, but there's still plenty.

[Beagle]

You mean, a break below A$11.30 will see A2M test A$10.50 as the next support level?

I think a test of the baseline support level of around $NZ10 is quite plausible. It just keeps getting tougher for ATM and the consensus average FY20 PE with average estimated eps of 44 cps at $12.30 is 28. That's too high for a company with very rapidly slowing eps growth and the clear need to invest vast amounts on marketing on an ongoing basis to differentiate their product from the ever increasing range of others. A forward PE in the early 20's looks more appropriate to me for the much slower eps growth and higher risks. 23 x 44 cps gives ~ $N.Z10. https://www.marketscreener.com/A2-MI...22/financials/
I think anyone thinking ATM can wind back their spend on marketing in future years is taking a far too sanguine view of how future competition will develop and thus I expect margins to remain under pressure in the years ahead. Current average analyst expectation is for a slight increase in gross margin in FY21 and FY22

I think the opposite is more likely and we'll see ATM having to further significantly increase their marketing spend in the years ahead.
Sometime in the next decade I expect ATM will be viewed as just another milk commodity company as the ever wider proliferation of competitor A2 products companies vastly expands. We could then see ATM trade on a multiple in the mid to late teens like Danone.

[couta1]

Haha another Danone which is currently trading at around $127NZ equivalent, I'd be happy with that. PS-In time very possible.

[RGR367]

Not really looking for it but saw a couple of A2 1 kg skim milk bags for sale at a medicinal store (Yu Yuen Tong Medicines Company) here in Kowloon for HK$95. The bags got best before dates of 29 Nov '19.
FYI only.

[t.rexjr]

I think the opposite is more likely and we'll see ATM having to further significantly increase their marketing spend in the years ahead.
Sometime in the next decade I expect ATM will be viewed as just another milk commodity company as the ever wider proliferation of competitor A2 products companies vastly expands. We could then see ATM trade on a multiple in the mid to late teens like Danone.

Jeez Beagz, Lets hope so... Curtail marketing and evaporate into oblivion or water the grass and become Danone! The spend is vital and increasing it would be an absolute. Gotta spend money to make money aye!

[Southern_Belle]

I remember when kiwifruit started to be exported to China and people caught taking kiwifruit vines to China ..... woe it was the end of the world and our export market .....never happened Apple's, cherries, kiwifruit.....we still can't export enough.

What about water being taken from Chch and sold in China...... of course they have that in China too and import from other parts of the world.

China is securing quality food sources for it's burgeoning population. It doesn't matter if another player ......there still won't be enough a2 milk to meet demand worldwide. There is no glut of product in the market.

Holders sit tight .... brighter days on the horizon

[winner69]

Hope Jayne not being too distracted by this

https://www.stuff.co.nz/sport/tennis...like-rod-laver

[couta1]

I remember when kiwifruit started to be exported to China and people caught taking kiwifruit vines to China ..... woe it was the end of the world and our export market .....never happened Apple's, cherries, kiwifruit.....we still can't export enough.

What about water being taken from Chch and sold in China...... of course they have that in China too and import from other parts of the world.

China is securing quality food sources for it's burgeoning population. It doesn't matter if another player ......there still won't be enough a2 milk to meet demand worldwide. There is no glut of product in the market.

Holders sit tight .... brighter days on the horizon

Well said, holders sit tight and dont listen to unresearched barking.

[bull....]

Well said, holders sit tight and dont listen to unresearched barking.

the shorters are in control so that is cause for concern lol unless your short