ATM - A2 Milk Corporation Limited

[alokdhir]

Gosh, all things considered, I wouldn't want to be invested in FPH, with a P/E of 48+ , full year revenue of only $1.26b, and a after tax profit of only $287m. Yet people happy to pay $34 per share. or Ryman for that matter with a P/E of 25+, generating profits of only $242m and currently $15+ per share.

FPH will be doing almost 2 b sales with profits of around 0.5b eps of 0.85 in this full covid year ...going forward also a big boost to future growth due to covid exposure of their products to many many new doctors and patients . Sector P/E is 45 as its niche healthcare showing steady growth and better prospects ahead with ageing world population . They have patent products and invest 10% in R&D regularly . No wonder they were No 1 company of NZ 2020 .

FPH has given 14 earnings upgrades in last 3 years with more coming in Feb 2021

RYM value moves with property prices too for obvious reasons ...it went to $ 6 in march now ...

[Gregnz]

FPH will be doing almost 2 b sales with profits of around 0.5b eps of 0.85 in this full covid year ...going forward also a big boost to future growth due to covid exposure of their products to many many new doctors and patients . Sector P/E is 45 as its niche healthcare showing steady growth and better prospects ahead with ageing world population . They have patent products and invest 10% in R&D regularly . No wonder they were No 1 company of NZ 2020 .

FPH has given 14 earnings upgrades in last 3 years with more coming in Feb 2021

RYM value moves with property prices too for obvious reasons ...it went to $ 6 in march now ...

I disagree with FPH but will keep on topic. Their demand for ventilators spiked during covid and has now fallen off a cliff.

[alokdhir]

I disagree with FPH but will keep on topic. Their demand for ventilators spiked during covid and has now fallen off a cliff.

Agree with keeping on topic part but fully disagree with your FPH views ...also they dont make Ventilators ...Humidifier ( part of ICU invasive ventilation ...world no 1 product ) and also doing great these days on non invasive ventilation ...front line standard covid hospital treatment protocol !! Their Nov sales were highest so far and still rising ...

[daveypnz]

I asked a friend in China if local IF brands are becoming more popular, she said yes. However she doesn't have a child so probably doesn't have her finger on the pulse but she did say the push to buy locally produced goods across the board is very real.

I see Feihe are marketing their IF as "More Suitable for Chinese Babies"

[Gregnz]

I asked a friend in China if local IF brands are becoming more popular, she said yes. However she doesn't have a child so probably doesn't have her finger on the pulse but she did say the push to buy locally produced goods across the board is very real.

I see Feihe are marketing their IF as "More Suitable for Chinese Babies"

There is definitely a push to buy local. There is also a huge portion of Chinese who dont trust Chinese manufactured product. Also, generally mothers will keep their babies on the same formula brand, the switch to a different brand isn't quite as easy as just buying a different brand or buying whats on sale at the time. This is where A2 will be able to prove to us if they really are as good at being a marketing company as we hope they are. The key for A2 is being manufactured in NZ.

[Arbroath]

I always find with a sexy stock like A2 there is much hype and expectation in the upside but equally when there is disappointment a lot of angst and exaggeration that the world is ending and the share price is suddenly worth about 30% of whee it was only a few months ago.

Don’t get me wrong $21 was hyped and I didn’t own having sold about $15/16 on the way up. Management definitely should’ve handled this downgrade better as I and many others thought they’d fail to make their optimistic guidance. They have lost some credibility and trust which will take 1-2 years to rebuild. Have dipped my toes back in under $11. Don’t think they’ll miss the bottom end of guidance now but that’s not saying much given the $400m cut to the bottom end of guidance range. Main risk now for me is getting caught up in the Australia-China crap going on but this is still a good company and if they can meet the adjusted guidance and show the potential of the US market then a PE of 25-30 will be sustainable imho.

If they slide to $8-9 range I’ll double up and hold for the next 5 years as this is not a fly by night operation.

[Beagle]

Each to their own I guess, but few companies on the NZX with a share price of $6 and generating a net profit of $250m after tax.

Its all about earnings per share and what the more moderate growth rate is going to be going forward. That's going to take quite some time to be established. For that reason I won't touch this at any price until a new confirmed uptrend is in place. $6 is just an indicative marker for me where I think the fundamental's might start to look reasonably attractive...more important for me is a new confirmed uptrend, (confirmed for instance with a break up through the 100 day moving average), which I think is highly unlikely to happen anytime soon.
While a clear downtrend remains this is a very dangerous place to have one's capital invested, in my opinion. Downgrades almost always come in three's !

[101nick101]

One of my larger holdings that I purchased between $14-17, I'll battening down the hatches and see where things are in a year or 2 instead of selling off now at a loss.

[Gregnz]

Our investor friends in Australia seem convinced there have been 3 downgrades in 4 months, has there? I can only find 2?

[Balance]

Guess some posters here will be more receptive to listening to the old investment adages?

Sp then was $16.65.

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!

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.

Another adge is not to double down, but double up.