ATM - A2 Milk Corporation Limited

[Beagle]

Have you been trying to help by buying their shares sub $16 this morning Beagle?

LOL everyone has to assess value for themselves. For me, I believe this is just the first downgrade...

[jonu]

LOL everyone has to assess value for themselves. For me, I believe this is just the first downgrade...

Yes or no?

[ratkin]

https://www.asx.com.au/data/shortsell.txt

and the daily shorts keep increasing.....

This will bounce back

They knew..

[Beagle]

No I am not a buyer at this level or close to it. No I am not trying to talk it down. I post how I see things regardless of whether its the populist view or not.
Some people dislike me for that and others appreciate me sharing my viewpoint frequently. Not everyone is going to like you on a public forum, that's just how it is....(Vince told me that once and that hits the nail squarely on the head)

[Leftfield]

From 9th September...one of many posts along similar lines.
I posed the question. The clues were there if you went sniffing for them but I basically got shouted out of this thread as a troll when all I was doing was warning of possible trouble ahead. Of course, as expected, nobody ever thanks you for being right when you are a portender of trouble coming. I was just trying to help but the zealots didn't want a bar of it.

Emotional attachment to a stock because its been very kind to you in the past can be a dangerous thing. No room for "attachment issues" with investing as far as I am concerned.

You seem to forget that same 'emotional attachment' has yielded some holders huge returns and provided a considerable 'safety buffer'.

Whether this is a short term dip or ATM transitioning from a 'high growth' company to simply a 'growth' company remains to be seen.

That said, I note that overall FY21 revenue are still forecast to be up 10% up on FY20. Thus SP drop over 10% or below $16 could be argued to be an 'over-reaction' and represents good buying for those so inclined.

This part of the news release is key.

It should be noted that the sale of infant formula through the daigou channel

is only one component of our multi-channel and multi-product sales strategy

into China. Our growth plan assumes MBS and CBEC sales will represent an

increasing proportion of our infant nutrition business over time, driven by

the continuing growth in underlying consumer demand."

Still a valued part of my portfolio and I don't intend selling. JMHO. DYOR.

[Balance]

No I am not a buyer at this level or close to it. No I am not trying to talk it down. I post how I see things regardless of whether its the populist view or not.
Some people dislike me for that and others appreciate me sharing my viewpoint frequently. Not everyone is going to like you on a public forum, that's just how it is....(Vince told me that once and that hits the nail squarely on the head)

Those of us around long enough have learnt (and through bitter experiences at the beginning) to heed some investment adages which have proven to be sound and wise over time and again.

One adage is that Downgrades do come in threes irrespective of what a company or management tell you.

Another is not to try and catch falling swords - you may not have many fingers left!

[jonu]

Those of us around long enough have learnt (and through bitter experiences at the beginning) to heed some investment adages which have proven to be sound and wise over time and again.

One adage is that Downgrades do come in threes irrespective of what a company or management tell you.

Another is not to try and catch falling swords - you may not have many fingers left!

The bad news comes in 3s adage applies to companies with something fundamentally wrong IMHO. I don't see ATM in that boat.

[Beagle]

Yes absolutely people should DYOR. Was a lovely and very fast ride up to $13 in March 2018 as I have mentioned before and I can certainly understand long term holders having trouble accepting that the fast growth of the past has dramatically slowed.

Fact is they said "Group revenue for FY21 of $1.80 billion to $1.90 billion" At the mid point of $1850m this is just a 6.87% increase on last year $1731m.
Further, this modest uplift is predicated upon 2H sales being $1,100m v 1H being $750m an uplift in 2H over current sales level's of 47% !!
Investors have to decide for themselves if in the current Covid environment whether that's really plausible or not..

Balance's well known saying of downgrades always come is three's is FAR more often right than not...its going to be very easy for them to say in the future because of XYZ this and Covid that...2H sales disappointed. They have to have a target of some growth this year after recent statements of strong growth and directors selling down...so they have to let shareholders down as gently as possible...or at least that's how I see it. I know that's a pretty cynical view but that's my read on it.

But how can 6.87% growth possibly be considered to be strong ? What did directors really know that they were not telling shareholders when they recently sold down ?
This does smell a little like old fish past its "use by" date.

A robust debate and exchange of varying viewpoints is always a valuable thing for everyone Left field, even if to some people it is sometimes misconstrued as "grumpy ranting".
Not intended as advice, no position held, DYOR.

[Sideshow Bob]

You seem to forget that same 'emotional attachment' has yielded some holders huge returns and provided a considerable 'safety buffer'.

Whether this is a short term dip or ATM transitioning from a 'high growth' company to simply a 'growth' company remains to be seen.

That said, I note that overall FY21 revenue are still forecast to be up 10% up on FY20. Thus SP drop over 10% or below $16 could be argued to be an 'over-reaction' and represents good buying for those so inclined.

This part of the news release is key.

It should be noted that the sale of infant formula through the daigou channel

is only one component of our multi-channel and multi-product sales strategy

into China. Our growth plan assumes MBS and CBEC sales will represent an

increasing proportion of our infant nutrition business over time, driven by

the continuing growth in underlying consumer demand."

Still a valued part of my portfolio and I don't intend selling. JMHO. DYOR.

While they may be pursuing other strategies in China, just goes to show what a HUGE amount goes through that daigou channel.

Then the next question is the brand, and sales channel in China - presumably there is still good demand for A2 product? Since the daigou is less available, obviously they are not expecting any sort of corresponding uplift in sales directly through their Chinese channels. So is it a trust, an availability or a price issue?

[Balance]

The bad news comes in 3s adage applies to companies with something fundamentally wrong IMHO. I don't see ATM in that boat.

It’s just the nature of things that most downgrades come in threes, whether the companies are good or bad companies.

Directors and management like to believe that any set backs are temporary and one offs - so they tend to underplay the downgrade when it comes.