ATM - A2 Milk Corporation Limited

[glenscape]

agree wity you, longy. that is not a good word always.

[nztx]

Many many lessons to be learnt from what has happened with ATM share price action in the last year.

Hope they have been learnt.

Like .. "Stay away from ATM unless you like losing a piece of your grundies in each foray" ..

Oh well .. at least ZEL seem to be looking rather more positive, so all can't be lost ..

[porkandpuha]

Sheesh all this downward pressure will be enough to bring Beagle out of hiding to tell us about it!

Nice trading stock today... and the shorters will be loving it, especially for the many who have been taking positions in the last 3 weeks per shortman.

[winner69]

Apparently taking a lot of old stock back and replacing with new fresh stuff

Jeez $120m of old / excessive stock is a lot .....now many tons is that.

[longy]

Apparently taking a lot of old stock back and replacing with new fresh stuff

Jeez $120m of old / excessive stock is a lot .....now many tons is that.

I am wondering this is why Nathan has resigned... Although they are not saying it?

[bull....]

there forecasts for discounted a2 to clear stocks might get upgraded if it turns into a price war

[allfromacell]

I just hope $120M worth of IF isn't wasted.

[Balance]

Where have you been AND haven't you heard of COVID before???

Why has "B!00dy Ch!n88se" got to do with it? I do find this offensive BTW. Any body else?

Dipped my toe into ATM @ 9.15 ( 2200 ) is this the bottom, hope I dont get slaughtered once Aussie opens !

I think ATM is way over sold !

Looks like whatsup is trying to find blame, having got into ATM at $9.15 and not seen a single day when the sp went above his entry price?

First he blamed downrampers

Now he blames the Chinese

Soon he will blame ATM

and finally, at $4.00, he will blame himself.

[ratkin]

Having to markedly increase marketing spend is not a good look. Was a time it flew off the shelves regardless. Now they having to work extra hard just to get rid of it.
Maybe this is the last downgrade maybe not, but it does not look very investable unless you are of a gambling persuasion.

[Beagle]

This seems a worry, NPAT 1H 2021 was $120m, if the full 2021 year NPAT is indeed around $90m than this means the company is losing $30m in the second half.
I start to wonder if breakeven for next year is going to be considered a good result. Profits went up fast over the last few years, who would have thought profits would collapse so spectacularly. Maybe Balance I guess.

I hadn't thought of it being that bad, but thanks for sharing, I think you raise a very good point. $677m for the first half, and if they make $1.2 Billion and that's a big IF, that's just $533m for the second half.

With sales in April clearly cratering, management have an enormous job in front of them to stop the bleeding and stop the erosion of market share which will clearly involve more inventory "management" in FY22 and extensive marketing spend which I feel is likely to continue well into FY23. Maybe management can steady the ship at around $1 Billion in annual sales and around 17% gross margin after much higher marketing spend but perhaps further inventory write-off's in FY22 lead to a similar gross margin (11-12%) as for 2021 leading to a similar eps number of about 10-12 cps ?

Maybe they can grow eps at a modest rate in FY23 but what's a fair PE for a far more slowly growing company off say an 11 cps new baseline ? Maybe 17 ? Does that suggest around $2 is fair value as suggested by some others on here ? What's fair value if as you suggest all they can do in FY22 is break even ? What about the apparent ever growing geopolitical risks with doing business with China, how does that affect the situation going forward ?

No question the good ship ATM, (unlike the Titanic) has the reserves to get back to dry dock for a desperately needed thorough overhaul of its systems, procedures and marketing approach but what it can earn going forward and how slow the growth will be off a much lower eps base looks very concerning to me.

Thanks to your info, many got out or held off buying.

Appreciate the input.

I would like to thank everyone who posts here and freely provide their insights. Lots of lessons learnt and it saved me from making a costly mistake.

Will continue to follow this company from the sidelines and see whether there is a good long-term buying opportunity for my personal risk tolerance.

Nice that some people appreciate the enormous effort BBB (Balance, Beagle and Bull) have put into share their objective and unbiased thoughts against what is often a tidal wave of hate. I am not surprised by this mornings TV3 survey with 82% of respondents saying that social media was mostly a bad place. Hardly anyone ever thanks you for saving their bacon.

In case there's any doubt left, I think this "train wreck" of a share price correction still has a long, long way to play itself out fully.