ATM - A2 Milk Corporation Limited

[dreamcatcher]

Something I take issue with is the criticism of the systems (not) used to track inventory in the daigou channel. Once a business has sold something, especially FMCG, it is extremely rare to track the movements of that inventory within a third party organisation. The level to which some posters here expect ATM to track inventory would necessitate installing something like a GPS tracker onto every can. Dramatic example aside, the level of inventory tracking expected by some here is beyond reasonable and, at the risk of being blunt, naïve to actual business practices.

Sellers of FMCGs into wholesalers should (must!) have a close relationship with them. This would give a general sense of the age of the stock, checking the wholesaler is not over or under ordering, the product is fairly positioned/promoted and ensuring older stock is sold first etc. That is dependant on reps servicing such clients. But those function are not, and cannot be, done using any sort of ERP system, unless there is some sort of integration between systems of the two businesses. Such a goal would remove a % of the role of the rep but carries the risk of unintended consequences and a soul-less business relationship. Automation of ordering was the goal many years ago but, in my experience, is still a pipe dream for many organisations. If it were done it is expensive to implement but I can honestly say there is not a huge appetite for such closely integrated systems. Businesses generally like their independence and lack of transparency to others.

That said, there were issues with the amount of stock in the daigou channel and we all know why that happened. The closure of the borders impacted daigou trade resulting in an over-stock situation within that channel. Their sales obviously collapsed and they were left carrying excess inventory. That inventory is now classified as excess, but it wasn't at the time it was ordered. No ERP system would have prevented that from happening.

The positive from this is that COVID has highlighted a blind spot for ATM, and I fully expect they will do what they can to a) remedy the situation and b) come out of this a better business.

I would happily stand corrected if someone has any facts on actual inventory tracking at ATM within wholesalers/daigou, as opposed to conjecture and supposition. I freely admit I do not know the extent of the relationship between ATM and wholesalers/daigous; I can only share what I have seen at other FMCG companies.

My thoughts exactly regarding inventory which imo was built up to supply demand especially for China's shopping extravaganzas (618 11/11 12/12 Luna) because they always ran out of stock. Covid was unfortunate which no country or business could ever safe guard against and nobody expected Covid to still be affecting the world.

The good news is world population is vaccinating like crazy because of Delta with some countries reaching that 70% - 80% in Oct/Dec when borders could be opening.

You have highlighted some good points Ferg.............

[Cottagestyles]

FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

Love it, go big Couta! On the NZX side of things am doing the same with FPH and WHS, they're what I'm hoping will do my long term heavy lifting while I play with GXH and DGC Nothing has been so freeing as shedding the last of my ATM holding. It hurt a bit but sleeping happy now.

[see weed]

Love it, go big Couta! On the NZX side of things am doing the same with FPH and WHS, they're what I'm hoping will do my long term heavy lifting while I play with GXH and DGC Nothing has been so freeing as shedding the last of my ATM holding. It hurt a bit but sleeping happy now.

Sold my last lot today. This is the second time this year of having no a2 shares. It was only about 12 months ago that a2 was 100% of my portfolio, but only for a couple of weeks, that was a bit scary. A2 dragged my portfolio down 6 figures but am still in the green and not too worried, should get it back sooner or later.

[Beagle]

A quick question if I may - without derailing the thread.
If the 200 day MA was say $18 and the price hit $17.90 today then bounced back to $18.05 tomorrow is that a trigger?
I suppose the question I am asking is how solid below the MA should the share price be or stay for a trigger?

Great question, thanks for asking. I normally look for a confirmed 3 day breakdown or break up through a moving average. Others will use a shorter period but as you suggest this can sometimes lead to getting whipsawed. Sometimes I act quicker based on good old fashioned instinct honed over nearly 40 years of sniffing the breeze for what's coming next.

FPH makes up 45% of my portfolio currently as does PAZ so I'm still going big or going home. Lol

You can lead a horse to water...

[dobby41]

Great question, thanks for asking. I normally look for a confirmed 3 day breakdown or break up through a moving average. Others will use a shorter period but as you suggest this can sometimes lead to getting whipsawed. Sometimes I act quicker based on good old fashioned instinct honed over nearly 40 years of sniffing the breeze for what's coming next.

Thanks for the answer - I didn't think 1 day really cut it unless, as you say, there is more supporting 'instinct'.

[winner69]

https://markets.businessinsider.com/...9-4-1028114374

Attachment 12916

Does that chart show Monsters share price has been over 3600 days below it’s all time high ….which is about now.

Seems rather meaningless …but a pretty chart

[Master98]

"The fifth most traded share last week on CommSec was this struggling infant formula company. And although over two-thirds of the volume came from the buy side, it couldn’t stop the A2 Milk share price from sinking 10% over the period. This followed the release of a disappointing full year result and expectations for another tough year in FY 2022."

[Balance]

"The fifth most traded share last week on CommSec was this struggling infant formula company. And although over two-thirds of the volume came from the buy side, it couldn’t stop the A2 Milk share price from sinking 10% over the period. This followed the release of a disappointing full year result and expectations for another tough year in FY 2022."

One of the most shorted stocks on the ASX - not hard to figure out where the buying was coming from.

Then there’s the retail punters who look at the $20+ sp a year+ ago & think the stock is very cheap.

Great trading stock!

[Master98]

One of the most shorted stocks on the ASX - not hard to figure out where the buying was coming from.

I assuming one or two big boys push sp lower to accumulating more to average down their cost like The Vanguard Group.

[Balance]

I assuming one or two big boys push sp lower to accumulating more to average down their cost like The Vanguard Group.

Possible but traders playing on the short side have been the big winners with A2M in the last year.

Before then, the big winners played on the long side.