ATM - A2 Milk Corporation Limited

[Harrie]

Has anybody done any figures as to how big ATM needs to get before they're self sustaining in the industry in that even IF A2 turned out to be a myth, they were big enough to just compete as a normal supplier anyway?

Well it seems to me that given that it is still scientifically unproven, ATM have still picked up a sizable part of the Australian fresh milk market based purely on anecdotal "word & Mouth" testomony by hundreds of users. I would find it pretty hard to believe that those people are either phycologically swayed by marketing rhetoric, or just plainly stupid.
IMHO milk is milk even if the science remains inconclusive there will always be a market for it, so I don't see any real downside. The real issue seems to be centred more around ensuring supply can meet the demand.

[NT001]

Has anybody done any figures as to how big ATM needs to get before they're self sustaining in the industry in that even IF A2 turned out to be a myth, they were big enough to just compete as a normal supplier anyway?

It won't turn out to be a myth. No chance. Even the critics and doubters no longer really challenge the science, thanks to Woodford. If it was a myth, Fonterra and co would be saying so, and they actually gave that up years ago.

But it will take a while for the global scientific commuity to actually embrace the A2 hypothesis - that will be a gradual process. At the moment they're mostly sitting on the fence, with some aware that something is going on but not yet fully understanding it, and others not even aware.

I would have thought that A2 is already self-sustaining commercially, given that it has reached a stage of high profitability already in Australia even prior to being allowed to make any advertising claims as to its health benefits. Its success there has all been based on consumer experience and word of mouth, plus a very fortunate factor that is seldom acknowledged - a largely friendly media in Australia. In NZ, Fonterra has such a commercial hold over the media that they aren't going to run stories publicly questioning the safety of the milk we're served in the shops. Also, the NZ Food Safety Authority has very firmly (and dishonestly) suppressed any debate on the A2 issue, still insisting in the face of all the evidence that there's nothing in it.

But in Australia there's been a lot of media publicity for A2 based on consumer anecdotal experience. That could only happen once there was enough of the stuff available in the shops for a lot of people to suck it and see, ie people who think they're milk intolerant or who experience digestive discomfort when drinking milk. Australia's the only market where it's readily available as yet. Once it achieves a decent level of market availability in UK and US it should really take off. Articles like the one in The Independent the other day are publicity you just can't buy - they have huge credibility. Consumer experience is leading the way, and the science is gradually following behind, discovering why the consumer experience is positive. There's no science arguing the converse.

[ziggy415]

agree with you NT...but who is it thats selling shares and supressing share price....

[Harrie]

Its may be freedom, but more likely fund managers who are controlled by mandates which set exposures to any one specific stock. As I have said before trustees are governed by the trust deed not by their brain. They really don't have anyinvestment nowse, they just have a legal responsibility to remain within the terms of what has been set down in the mandate. I'm hoping its not Milford because as they depress the SP they may need to sell more to keep the balance right. For those who use their brain its a great opportunity to buy at these prices. The further it goes down the better the value.
There is nothing fundamentally changed in what ATM are doing than they were doing when the SP was up in the 90's!

[NT001]

agree with you NT...but who is it thats selling shares and supressing share price....

Can't answer that. I'm moot an analyst, just a happy and contented investor who has followed the A2 story for a long time and enjoys being part of A2's journey. I'm in for the long haul, not worrying too much about temporary manipulations, unless they seem to signal a hostile takeover is planned at a depressed price (or any price), which worries me slightly.

On the subject of SP manipulation, some of us will have just seen an interesting post (no. 11377) over on the PEB thread that could be relevant and a bit unnerving, especially to us non-traders. There are interesting analogies between ATM and PEB of course.

[see weed]

agree with you NT...but who is it thats selling shares and supressing share price....

It's not me, i'm still in buying mode, but holding back for a breather. Bit busy with election campaigns at the moment, but have noticed a couple of shareholders pushing sp down. Maybe they have a buy order in at 61c. And you know the story from there. As soon as their buy order has gone through, then their sell order disappears. Or it might be the opposite, I hope not.

[MAC]

Analysts have had a week to digest the results and that strategic growth outlook, and one just has to check on Yahoo or FT to see that revenue and earnings estimates have been revised already.

Valuations are to the upside, just needs a catalyst, dumb as it may seem, some are probably awaiting the Synlait announcement, sometime in the next couple of weeks

I’m not convinced that all have figured out that falling dairy prices is actually a positive for ATM too, the exchange rate dropping can’t be lost on most though.

[see weed]

Converted a pregnant woman in the egg department today, at the super market. I told her which eggs were free range, which she bought. Also told her to drink a2, which she had never heard of. I said it was a healthier choice for you and baby, and google it when you get home. Should all be good in the long run.

[NT001]

Also told her to drink a2, which she had never heard of and google it when you get home. .

You gotta be just a bit careful about that. I googled A2 milk the other day and the first site that came up was this one, an aussie one absolutely full of BS attacking A2 milk and saying it's a total hoax.

http://www.a2milkthefacts.com/

It didn't give any indication who was behind it, either. The Dirty Tricks brigade is active over there, as well as a lot of good guys.

[nextbigthing]

I see Freedom Foods have been buying up;

Trade Date 01-09-2014 Bought 162,500 Ordinary Shares for NZD 104,000
Trade Date 01-09-2014 Bought 500,000 Ordinary Shares for NZD 310,850
Trade Date 03-09-2014 Bought 180,000 Ordinary Shares for NZD 112,608
Trade Date 03-09-2014 Bought 100,000 Ordinary Shares for NZD 61,500