ATM - A2 Milk Corporation Limited

[QFD Sage]

Interestingly, as the share price comes back, the prospect of increased attention from suitors increases. What we are seeing at the moment is simply speculators exiting. Largely good news today so just be patient, buckle in and enjoy the ride!

[Leftfield]

I'm struggling to find anything negative in the numbers.

Perhaps other posters are correct and the market is fearing a capital raise…. however, my interpretation is that the positives in this report outweigh this possibility. Exciting times ahead? Time will tell.

[NT001]

Only thing is they need the supply to meet the demand

Kirk, you are right to identify this as a potential limiting factor, but there are ways around it, especially in the US. And that will be the most important and profitable market for a variety of reasons including its wealth and consumer awareness of health issues.

Quite a few US dairy farmers have already converted to A2, or largely done so. Awareness of the A1-A2 issue is widespread in the US. A2 Corporation had a go at the US market about 7-8 years ago and a lot of Midwest farmers converted or got well down the path of herd conversion before the company pulled out due to a change in global strategy. A lot of those farmers, spread across many states, are dedicated to the cause amd ready to sign up again now.

The US dairy industry is very large, and well placed to develop big A2 herds, capable of supporting not only the US domestic market but also exports to markets such as China and Europe. It can segregate A2 cows within its herds, many of which are much larger than the average NZ or Australian herd. A strategy of within-herd segregation plus selective breeding could quickly build up large and viable A2-only herds, helped by the fact that in contrast to NZ, US dairy farms breed calves year-round.

It would not surprise me if Dean Foods, which has contracts with thousands of US dairy farmers and segmentally targets health-conscious consumers, becomes involved with a2MC, possibly even via a placement of new shares as part of the inevitable coming capital raise (which I'll subscribe to)

China, the UK and Europe will not be quite as easy for a variety of reasons. China will have to be supplied from Australia and NZ for some time. It is good to know from Babidge's FY report today that a2MC has had consumer tests conducted in China, the results of which just await publication in peer-reviewed journals.

And in NZ, although Fonterra has discouraged farmers from going down the A2 route, a lot of them have been quietly moving their herds in that direction. Babidge's report today that more NZ farmers have been signed up to supply milk for infant formula is interesting - and the word will be getting around. Many farmers here are preferentially sourcing their breeding semen from bulls identified as A2-A2 (and most breeding bulls now listed on the catalogue are pure A2). So a lot of NZ farmers are partway there.

[winner69]

Presentation says ANZ EBITDA was $30m

Page 9 of Appendix says ANZ EBITDA was $5.7m


Had me stuffed last time and somebody did try to explain why but I think they were actually confused as well.

Anybody willing to have a go?

I one of those nasty trader of ATM shares but willing to understand the fundamentals

[Harrie]

Wow that was a busy day, sold 91,000 and bought 10,000 and a $14,000 profit.

you have only made a profit seeweed if you sold 91000 and bought the same 91000 at a lower price. If you do nothing in the next week fortnight month or year and the SP goes above your sale price the only person making any profit is your broker. Short term gains, long term losses.

[Kirk]

PPT been buying more now over 7% http://www.asx.com.au/asx/research/company.do#!/A2M They love to make announcments late in the day

[see weed]

you have only made a profit seeweed if you sold 91000 and bought the same 91000 at a lower price. If you do nothing in the next week fortnight month or year and the SP goes above your sale price the only person making any profit is your broker. Short term gains, long term losses.

I had to. Was losing over $3000 every time it dropped a cent. Looking for a dividend stock at the moment.Still got 140,000 in the 50c to 58c range and the rest over 73c and am happy with the holding. The brokerage was only $376 all up.

[sb9]

PPT been buying more now over 7% http://www.asx.com.au/asx/research/company.do#!/A2M They love to make announcments late in the day

thanks for that kirk, very interesting now....game on!

[blobbles]

Some people forget that a company has to be profitable to survive withou further injections of capital. So I hope you don't mind Bobbles if I spell things out a little clearer than Nasi did.

1/ Cash burn rate of $9.9m per year equates to $825k per month.
2/ Cash balance at 30th June $6.1m.
3/ Number of months before cash balance is exhausted: $6.1m/$0.825m = 7.4.
4/ Last day of trading for ATM listed entity: 12th February 2016

SNOOPY

OMG! They are going to have to do a capital raising. THE SKY IS FALLING! They will definitely go out of business on 12th of Feb next year, what was I thinking???!!

[Harrie]

Profit is Profit Harrie and see weed seems to be enjoying himself, just buying and holding can be somewhat dull and boring for many.

It's only a profit if you exit the market totally where average buy price is lower than average sell price plus dividends over your total portfolio which may be made up out of many shares.

In seeweeds case he may take the profit out of a2mc and put it into a different share which over time may perform better or worse than A2mc. You still need to make a judgement in the long term where your investments are best placed for the best long term profit. Nothing boring in that.

The only other way of knowing that you are constantly making a profit is to withdraw profits from the market and not reinvest back in the market. ie: maintain your original capital.