ATM - A2 Milk Corporation Limited

[jimdog31]

You know somethings going down when you see me...

They do have enough cash to do it.

[tomm]

My expect is due to the global logistics problem and the tension with China which in term will halt the Chinese students to study in Australia , all of the mentioned will effect more sales in daigou chanel and global shipment chain. They will down grade the previous guidance .... Hold tight guys.... Very obvious and the Share Price has been reflecting on this since.

“We have become aware of information which may require us to release an announcement to revise our previously issued guidance to the market,” the company said in a statement to the Australian stock exchange.
“We are requesting a trading halt to provide us with additional time to properly consider the current information and to consider new information as it becomes available, and inform the market.”

[Cyclical]

Similar to SML.

Market getting jittery.

Not good.

Yeah, I had to check the weighting of 1 or 2 ETF's I have...decided it wasn't enough to lose sleep over.

[Beagle]

......................After a very nice long lunch with a couple of really good mates and a few refreshments I reached the inescapable conclusion that some people cannot be helped and one has done a very good job of shooting himself in both feet, (despite years of me trying behind the scenes to get him to take a more reasoned, professional and prudent approach with his investing). In a nutshell, some people are their own worst enemy.

Back to ATM. As I see it four issues present.
1. The immediate downgrade and effect on earnings, likely to be material in my view.
2. Implications for FY22 growth rate, (if any) and beyond. Likely to be a material change.
3. What's a fair PE for a company that may be growing very slowly for the foreseeable future. Another material change coming.
4. The obviously skillful way these downgrades have been crafted to avoid the possibility of any successful action for insider trading is an addition overlay / Governance concern.

I foresee a material downgrade to earnings and future growth projections and a consequent material knock on effect to the multiple the market will attribute to ATM going forward.

I also have never seen such a long trading halt for what looks like a downgrade coming. Possible massive Geopolitical issue with the Chinese coming ? Dairy exports from Australia to be blocked or hit with a massive tariff that effectively blocks them ? Who knows, time will tell.

Synlait down 7.4% in just one day looks a bit ominous. I think Synlait could test multi year lows in the next few days. $4 on the cards I reckon.
On top of the above the $Kiwi at multi year high's will be a further headwind.

[Balance]

Yeah, I had to check the weighting of 1 or 2 ETF's I have...decided it wasn't enough to lose sleep over.

Exactly right.

It is what it is - you cannot influence whatever will be coming but you can manage how you respond to the event.

[Baa_Baa]

Potentially nasty if the revised guidance is not good. If so, TA suggests the GAP to $13 will immediately close with support below that at $12.20 and unfortunately no obvious supports below that until vaguely around $10 then the low Oct 2018 around $8.67.

Thoughts are with current holders, hoping this isn't a near term calamity, but for others looking for an entry or top up ... keep the powder dry until you see the whites of the eyes (might be a capitulation).

[winner69]

Multi day trading halts for guidance updates (usually big downgrades) are not that unusual

Aim to get some reality in the forecasts (ie do a thorough job instead of broad based assumptions / guesses) and robust enough so they don’t have to through the pain of further downgrades again.

But in saying that most don’t get it right and still have ‘hope’ built in....which doesn’t eventuate.

[bulltrap]

ATM still a longterm hold so far, but keeping a cautious eye on their announcement. Wont be selling if its a short-term blimp.

If it goes down like the Hindenburg, we know who jinxed it

[Beagle]

Multi day trading halts for guidance updates (usually big downgrades) are not that unusual

Aim to get some reality in the forecasts (ie do a thorough job instead of broad based assumptions / guesses) and robust enough so they don’t have to through the pain of further downgrades again.

But in saying that most don’t get it right and still have ‘hope’ built in....which doesn’t eventuate.

Which is exactly why as Balance astutely says, downgrades usually come in 3's. I reckon more than 90% of the time.
This is why as the famous KW says, Never buy shares in a downtrend.

[Waltzing]

"the Hindenburg"

oh dear this is really almost more exciting than the sailing... but after this afternoons racing i cant see anything being more exciting for NZ over the summer..The Americas cup in NZ is surely one of the great new stories of 2020/2021 for NZ sport to be championed around the world. Lets hope on monday there is no Hindenburg... really chins up people.. chins up..

How many times have they blown it badly before?